July 24, 2019 6:39 am

CBD-Based Products: What Marketers Should Know in Today’s Uncertain Regulatory Landscape

By Richard Fama and Kristin Keehan

The passage of the Agriculture Improvement Act of 2018, commonly known as the “Farm Bill”, removed hemp and all of its cannabinoids, including CBD, from the Controlled Substances Act.[1]However, excitement over the passage of this legislation was quickly tempered by the Food and Drug Administration’s statement that, under the Food, Drug and Cosmetic Act (FDCA), it remains unlawful to introduce hemp-derived CBD into food and beverages and to market CBD-based products as dietary supplements.[2]CBD is an active ingredient in FDA-approved drugs, and under the FDCA it is illegal to introduce drug ingredients into the food supply or to market them as dietary supplements absent prior approval.[3]

At a recent hearing in May of this year, FDA reiterated  its position and focused on the multitude of unanswered questions and lack of research surrounding CBD and its proposed uses.[4]Fortunately, FDA has assembled an internal working group to address these unanswered questions and propose potential pathways for marketing and selling CBD products[5], though such pathways do not appear to be forthcoming in the near future.

Notwithstanding FDA’s current position on CBD, companies large and small have already brought to  market a myriad of products, ranging from CBD-infused gummies to CBD capsules to CBD-containing pet treats.  After all, CBD is big business and consumers are always searching for alternative remedies. In fact, it is anticipated that the CBD industry will grow to $16 billion by 2025.[6]However, given the current regulatory landscape, those companies are at risk of enforcement actions by FDA and violations by state and local governments. And like marketers of all other products, the risk of product liability and consumer fraud lawsuits is ever-present. In order to mitigate against these risks, there are a few best practices that marketers of CBD-based products should consider.

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