The ABC’s of CBD

The ABC’s of CBD

Whether in gummies, face cream, candles, or dog food, CBD seems to be everywhere these days. Even so, there remains considerable confusion as to the legality of CBD and CBD products. A patchwork of evolving federal and state regulations has complicated matters even more, making it difficult for businesses and consumers to sift through the noise and understand products in the industry. Here are some key things you need to know:

What is CBD?

CBD stands for “cannabidiol.” CBD is one of over 80 closely related chemical compounds called cannabinoids found in the marijuana plant.

Colloquially, “CBD” often refers to goods processed with the CBD compound. CBD can be processed into a wide variety of products including oils, tinctures, lotions, food, and beverages.

Is CBD legal?

The 2018 farm bill legalized hemp-derived CBD produced by 1) a licensed hemp cultivator; 2) pursuant to a state cultivation plan approved by the U.S. Department of Agriculture (USDA); and 3) in accordance with applicable state regulations.

Federal regulations require CBD to contain .3% or less THC, the compound in the marijuana plant responsible for its psychoactive effects.

The USDA and most states have still not issued final rules and regulations regarding hemp cultivation and CBD processing. As such, companies in the space continue to operate in a legal grey area.

What types of CBD products are legal?  Are CBD foods and beverages legal?

Due to the lack of U.S. studies on the subject, the U.S. Food and Drug Administration (FDA) has not found reliable and competent scientific evidence that CBD is “generally recognized as safe” for human consumption (“GRAS”). As such, CBD is only legal in non-consumable forms such as tinctures, oils, creams, and lotions.

Because CBD is not GRAS, Sections 201(s) and 409 of the Federal Food, Drug, and Cosmetic Act require CBD foods and beverages to undergo premarket review and approval by the FDA. The CBD food and beverage industry has expanded at such a rapid rate, however, that the FDA has been unable to require companies to proceed through this process. As such, all CBD foods and beverages are currently illegal under federal law. The FDA has only approved one CBD product so-far, a drug for epilepsy.

As a practical matter, the FDA has not yet instituted enforcement actions against CBD companies or retailers. However, it has issued warning letters to CBD companies regarding unsubstantiated product claims.

Are there different types of CBD? 

In order to be legal under federal law, CBD must be hemp-derived and contain less than .3% THC.

While not federally legal, CBD may also be derived from the marijuana plant. In these cases, the CBD product may contain an excess of .3% THC. Marijuana-derived CBD products are currently only legal at the state level under applicable regulatory regimes. Some international studies suggest that marijuana-derived CBD is more efficacious due to the synergistic nature of the cannabinoids in the marijuana plant.

Who regulates CBD?

The USDA is responsible for overseeing the cultivation of hemp which will ultimately be processed into CBD. CBD products themselves are jointly regulated as a dietary supplement by the FDA and the Federal Trade Commission (FTC).

The FDA and FTC have not yet created rules and regulations regarding CBD products. The FDA and FTC have, however, issued warning letters to CBD companies about making unsubstantiated product claims.

What does CBD do?

Proponents argue that the CBD has anti-inflammatory and neuroprotective properties. CBD does not produce the psychoactive “high” traditionally associated with marijuana use.

Because the FTC views CBD as a dietary supplement, claims about CBD products must be substantiated by reliable and competent scientific evidence. As noted previously, until recently CBD was federally illegal, and so there is an absence of U.S. studies on the subject. As such, CBD companies may not lawfully make claims about the health benefits of the CBD in their products.

Will CBD users fail a drug test? 

In general, drug tests do not test for CBD.

Drug tests for marijuana test for the compound THC. Because CBD products contain some THC, CBD users could possibly fail a drug test for marijuana. However, this is unlikely if an individual is using federally compliant CBD, because these products contain low levels of THC that often do not rise to threshold required to produce a positive result on drug tests.

Because THC is fat-soluble, it stays in different individuals’ bodies for different amounts of time. Additionally, some CBD products currently on the market are not properly regulated and may contain THC in excess of .3%. As such, until a more definitive regulatory framework is established, CBD users run the risk of a noncompliant product potentially producing a positive result on a drug test.

What should employers know?

Federally, employers are not required to accommodate CBD use for any purpose. State laws differ as to whether employers are required to accommodate CBD for medical reasons.

The most important thing for employers to know is that they should have and communicate a clear and comprehensive policy regarding CBD use. The policy should outline if use is acceptable, where and when it may be used, and the consequences of failing to adhere to the policy.

Employers may seek to accommodate CBD use because of state law, or for policy purposes. Because CBD does not produce the psychoactive effect traditionally associated with marijuana use, permitting employees to use CBD products does not necessarily pose the same health or safety risks as marijuana use.

What should CBD companies know?

With CBD regulation evolving rapidly, CBD companies should be on the lookout for new rules, regulations, and guidance coming down the pipeline. The CBD industry has ballooned in recent years, and the USDA, FTC, and FDA have made it clear they consider CBD regulation a top priority for 2020.

Companies in this space should avoid making unsubstantiated claims about their CBD products until further guidance is provided. Keen observers may note this puts CBD companies in a Ccatch-22 situation; because the FTC requires claims to be substantiated by “competent and reliable scientific evidence,” it’s almost impossible to have substantiated claims regarding CBD due to the limited body of scientific research. However, avoiding unsubstantiated claims is nonetheless imperative to avoiding potential regulatory action.

With a practical approach, Chad provides compliance guidance and litigation defense on matters related to cannabis, advertising and marketing, teleservices, and other consumer protection issues.

1200 798 Walter (Chad) Blackham
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