Tag: hemp

FTC’s First Monetary Sanctions Against Six CBD Companies

Posted on December 23, 2020 by - Government Affairs, Pharmacy

On December 17, 2020, the Federal Trade Commission (“FTC” or “Commission”) announced that the Commission entered into settlements with six sellers of CBD-containing products.  The settlements were the result of the Commission’s enforcement sweep called “Operation CBDeceit,” which is the Commission’s ongoing effort to protect consumers from false, deceptive, and misleading health claims made by CBD companies.  In the settlements, the FTC has ordered each of the companies and the officers to immediately stop making unsupported health claims and pay monetary judgments to the FTC.  This recent enforcement is a significant development in the CBD industry for reasons discussed below.
This is the first enforcement action whereby the FTC imposed monetary sanctions upon CBD companies as well as the corporate officers for claiming unsubstantiated health claims.  The FTC claims that the violators including the corporate officers made a wide range of scientifically unsupported claims about their products’ ability to treat serious health conditions, including cancer, heart disease, hypertension, Alzheimer’s disease, and others.  These allegations are no different than the ones made by the FTC or the Food and Drug Administration (“FDA”) in prior enforcement actions.  What is unique about the recent settlements is that the Commission is holding the corporate officers responsible for participating in the illicit marketing of the CBD products.  It is axiomatic that the Commission will continue to enforce strict regulations over not only the CBD companies but also the corporate officers. Moreover, the violators were ordered to notify consumers about the settlements through various means.  For example, one of the companies was ordered to provide a notice on all of its social media accounts including Facebook, Twitter, Instagram, or YouTube as well as on the first page of the company’s website.  The notice must include a copy of the order.  Furthermore, five of the six settlements required the violators to pay damages ranging from $20,000 to $85,000.
Certainly, the FTC’s recent enforcement action is a key development in the CBD regulation while the industry has proliferated exponentially over the last couple years.  Additionally, there has been a series of lawsuits, which mimicked allegations raised in the FDA’s warning letters, filed against CBD companies.  It is imperative that CBD stakeholders promoting their products in line with applicable Federal and State laws.
How Frier Levitt Can Help
Given the possibility of lawsuits as well as conflicting state and federal law that only complicate regulations on hemp and its derivative products, CBD stakeholders should seek competent counseling to mitigate the risks of unwanted attention by the government or civil lawsuits.  Also, a cursory search using the search terms hemp revealed over 4,000 trademarks and applications. Clearly, the United States Patent and Trademark Office has opened the door for hemp containing products.  The trademarkabilty of such products and services is a nuanced and evolving issue.  If your company handles hemp and its derivatives, contact us today to speak to an attorney.

FDA and Florida are Taking Opposite Stance on Ingestible CBD

Posted on January 20, 2020 by - Government Affairs

As part of an ambitious new state hemp program, the Florida Department of Agriculture and Consumer Services (the “Department”) announced that new food safety and animal feed rules went into effect as of January 1, 2020. Agriculture Commissioner Nikki Fried stated that the new regulations are crucial in “getting the state hemp program up and running to provide a new alternative crop for farmers, allow Floridians to access safe, quality CBD products, and help [the] state reach its potential as the nation’s gold standard for hemp.” These new regulations are intended to support the continued sale of hemp and its derivatives products, including CBD, while ensuring that consumers are protected.

Under the new regulations, any hemp extract or product containing hemp extract intended for human ingestion and for animal ingestion will be regulated by the Department. Any business that manufactures, processes, packages, holds, prepares or sells food made from or containing hemp extract is required to obtain a Hemp Food Establishment Permit to operate in Florida. Food consisting of hemp or hemp extract (including CBD) must be obtained from an “Approved Source” that meets certain local, state or federal food safety standards. Such foods are also subject to specific labeling requirements. Food containing hemp extract must have a THC concentration of less than 0.3% on a dry weight basis and the food must contain less than set limits of certain contaminants used in the hemp cultivation process. As part of the on-going efforts to minimize risk of foodborne illnesses, the Department will conduct routine inspections on such businesses.

Significantly, the new regulations allowing sale of ingestible hemp and hemp-derivative products runs counter to the United States Food and Drug Administration’s (FDA) current stance on these products. Despite the 2018 Farm Bill legalizing hemp with a THC concentration of less than 0.3% on a dry weight basis, CBD products are still subject to FDA’s laws and regulations, including those that apply to foods, beverages and dietary supplements. In this vein, FDA stated that “[i]t is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement.”

In the wake of FDA’s regulations on CBD products, a spate of class action lawsuits have been filed by consumers against CBD manufacturers mimicking FDA’s concern over illegal sale of CBD products including ingestibles for human and animal consumption. Meanwhile, U.S. District Judge Ursula for the Southern District Court of Florida in a class action lawsuit ruled on January 3, 2020 that a CBD manufacturer should not face certain liability claims until FDA finishes work reviewing CBD policy. In her opinion, Judge Ursula stated that the FDA’s current rules “provide little guidance with respect to whether CBD ingestibles, in all their variations are food supplements, nutrients or additives and what labeling standards are applicable.”

How Frier Levitt Can Help
Certainly, Florida’s newly enacted regulations have opened a door while further complicating the legality of ingestible hemp and hemp-derived products, which in turn impact industry Stakeholders including the extractors, manufacturers, wholesalers, and retailers. While many states will choose to wait until FDA issues its much-anticipated regulatory framework for hemp-derivative and CBD products, we envision that more states may take the necessary steps to enact regulations similar to Florida’s. Given the clash between federal and state laws, it is crucial for Stakeholders in the hemp industry to understand the current laws and regulations. If you need assistance navigating the regulatory environment for hemp, CBD or other cannabis-derived products, contact Frier Levitt today to speak with an attorney.

USDA Extends Public Comment Period on Hemp Production Program

Posted on January 7, 2020 by - Government Affairs

The U.S. Department of Agriculture (“USDA”) has announced a notice of comment period extension on the Hemp Production Program Interim Final Rule allowing hemp stakeholders to submit comments until January 29, 2020. By way of brief background, the Agriculture Improvement Act of 2018 (“2018 Farm Bill”) required USDA to establish the Program, which attempts to clarify the regulatory frame for States and Indian Tribes for the domestic production of hemp.

The Rule outlines provisions for the States and Indian Tribes to submit hemp plans for USDA approval. It also establishes THC testing protocols, interstate transportation, licensing protocols, and eligibility rules for federal programs (e.g., loan and crop insurance programs). More specifically, by and through the Rule, USDA is imposing strict sampling and testing requirements to ensure that the hemp does not contain THC exceeding 0.3%. However, farmers would not be considered in violation of the Rule unless the hemp crops contain THC exceeding 0.5%. Notwithstanding this, farmers are required to dispose any hemp crops with 0.3% – 0.5% THC. Furthermore, the Rule allows hemp to be transported across state lines even in the instances where the state does not authorize hemp production. Of note, states may enact stricter regulations impacting the production, transportation, and sale of the hemp and its derivatives.

As indicated above, the Rule provides much needed guidance to producers and farmers. However, it does not have any bearing on the FDA’s regulation on the hemp and its derivatives in food, beverage or dietary supplements. In other words, stakeholders in the hemp industry must comply with not only FDA and USDA regulations but also state laws that are often not in line with the federal regulations.  Moreover, the Rule does not address several key issues including, but not limited to, seed certification, total THC testing instead of the delta-9 tetrahydrocannabinol testing, and the potential issues arising from testing out of only Drug Enforcement Administration registered labs.

With the exponential growth in the hemp industry and the growing regulatory concerns, Stakeholders should review the Rule in detail and submit comments to USDA. Frier Levitt assists state and national associations around the country in drafting proposed legislation. Our “request for comment” work has played a prominent role on important national issues. If you want to learn more about the Interim Final Rule or would like to submit comments before January 29, 2020, contact Frier Levitt today.  Time is of the essence.

FDA Announces it is Expediting Review of CBD

Posted on July 15, 2019 by - Government Affairs

On July 12, 2019, Food and Drug Administration (FDA) Principal Deputy Commissioner Dr. Amy Abernathy announced via Twitter that the FDA is expediting its work to address the regulation of cannabidiol (CBD). She stated that FDA intends to report on its progress “around end of summer/early fall.”

Dr. Abernathy added that the FDA is enthusiastic about research into the therapeutic benefits of CBD products but reiterated the need to balance safety concerns. She also acknowledged the intense interest around this issue by saying that in addition to the over 100 speakers who presented at the May 31 FDA public hearing on cannabis products, there have been 3,417 comments submitted to the public docket (with four days remaining before the July 16 deadline).

Congress has also recently pressed the FDA for expedited action on CBD regulation. Senator Ron Wyden, D-Ore., sent the FDA a letter on June 25 urging the FDA to promptly issue guidance that ensures a regulatory pathway for the lawful use of hemp-derived CBD as a food additive and as an ingredient in dietary supplements. He called for FDA to issue an “enforcement discretion guidance” by August 1.

On the other side of the aisle, Senator Mitch McConnell, R-KY, met with Acting FDA Commissioner Dr. Ned Sharpless on June 28 and urged him to develop regulations to allow hemp-derived CBD to be lawfully marketed.

The House also recently passed an amendment to appropriations legislation directing FDA to “undertake a process to make lawful a safe level for conventional foods and dietary supplements containing [CBD] so long as the products are compliant with all other FDA rules and regulations.”

The emerging CBD industry creates opportunities for current participants in the drug supply chain, physicians, and other healthcare providers. However, anyone either currently involved in marketing or providing CBD products or those desiring to get into the CBD market should engage qualified guidance. Frier Levitt Government Affairs and Frier Levitt are committed to the healthcare industry and can provide sage advice to providers. Contact us today.