The Evolving Regulatory Complexity Surrounding Marijuana, CBD, and Vaping

According to Newsweek, the Trump administration is currently “preparing a complete ban on flavored e-cigarettes amid a rising number of vaping-related illnesses and deaths, but officials are leaving out a key part of the problem: marijuana products.” Whether Newsweek is right that marijuana products are a part of the problem or not, it is interesting to note how it is being left out. As they point out, “Marijuana is illegal under federal law, which makes it impossible for Congress or the FDA to pass any regulations around its use or sale, as they have with e-cigarettes and tobacco products. This means that there is no federal oversight when it comes to the manufacturing and sale of CBD and other cannabis derivatives. As a result, Trump administration’s ban is not expected to have a huge impact on the current marijuana industry, but it could push lawmakers to consider legalizing marijuana so as to ensure consumer safety.”

In a recently released Warning Letter to the company Curaleaf, Inc., the FDA outlined numerous violations that many CBD companies may find of interest. In summary, the FDA does not want CBD brands to be touting numerous health benefits that aren’t yet proven. They do not want companies to claim their products as medicine before having proven their effectiveness through studies and trials. The FDA also wrote that CBD products “cannot be dietary supplements because they do not meet the definition of a dietary supplement under sections 201(ff)(3)(B) and 201(ff)(2)(A)(i) of the FD&C Act, 21 U.S.C. 321(ff)(3)(B) and 321(ff)(2)(A)(i).”  Curaleaf’s current website makes it clear that they had to make many changes to their products and marketing following this letter.

Further, as pointed out by Alan Brochstein in Forbes, “The recent Farm Act that legalized industrial hemp was supposed to clear the path for the sale of CBD from industrial hemp, but this is only at the federal level. It turns out that states must create legislation to govern hemp production and the commercialization of hemp.” So, even if your CBD product clears with the federal regulations, you will still need to make sure you are following the law in each state that you are selling the product.

On the website for Charlotte’s Web, one of the leading CBD companies, they write the following about what CBD does:

“We’d like to have a heart-to-heart about something that is always on our mind and that we’d like you to know.

You might notice something missing from blog posts and our responses to comments on our blog and social media channels. Namely, details about what Charlotte’s Web products do for specific health issues.

We are not trying to be generic or evasive.

Our silence on this topic is an act of caring and having our customers’ best interest at heart.

How can that be?

To be in good standing with the Food and Drug Administration’s (FDA) regulations, we simply cannot speak about our product in relation to any disease.

You might find it interesting that our compliance with FDA regulations is not because our products come from hemp (our products comply with all applicable State and Federal regulations).  We keep mum because, as a dietary supplement, we follow rules that govern all supplements and disease claims.

These strict guidelines come with severe penalties and we’re not willing to risk your access to our CBD oil products. We abide by these policies, for the good of each and every person taking Charlotte’s Web.

The bottom line – regardless of the amount of research-backed studies on cannabinoids, the FDA could revoke our ability to sell Charlotte Web if they felt we were speaking too specifically about the way our proprietary extract may benefit your health. And with that, we’ve nearly said too much.”

With that message, they are trying to tout CBD without specifically saying anything that could get them in trouble with the FDA. Presumably, most customers who are seeking CBD can find articles detailing the benefits of CBD on their own. It seems that this growing myth or reputation around CBD and its benefits is what these companies must rely on for now, as the FDA continues to prevent them from marketing their products as medicine.

In starting a company, you always want to be sure that you won’t be halted as soon as you start to get things running. That’s why it’s important to be aware of all the legal issues surrounding your business. For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.