'The prevalence of questionable products may inspire a tsunami of class action litigation...' The regulatory path forward for CBD

By Elaine Watson

- Last updated on GMT

What’s the regulatory path forward for CBD?

Related tags Cbd Cannabis Hemp

While not everyone was on the same page about the legal path forward for hemp-derived CBD during Friday’s marathon FDA hearing, multiple speakers made clear that the current situation is untenable, with one predicting a wave of lawsuits, and others demanding that the agency either crack down on companies marketing such products, or explicitly spell out that existing regulatory frameworks can accommodate them.

So what happens next? With a rulemaking and comment process potentially taking years, American Herbal Products Association president Michael McGuffin suggested that FDA could:

A) “Issue a regulation, possibly as an interim final rule with an accelerated effective date permitting CBD as a lawful ingredient in supplements and foods,” ​or

B) Issue guidance indicating that it will not enforce the prohibition on foods and dietary supplements containing CBD.

‘At some point [the plaintiff’s bar] will turn its sights on CBD’

However, the latter could become fodder for plaintiff’s attorneys seeking to target players in the sector and “become another exhibit attached​ [to show] that the FDA knows the products are unlawful and industry knows it as well,” ​Todd Harrison an attorney at law firm Venable told FoodNavigator-USA.

The plaintiff attorney who spoke at the hearing ​[David Evans at Cannabis Industry Victims Educating Litigators, ​who predicted a wave of lawsuits vs marijuana firms] should concern everyone…

“At some point this group will turn its sights on CBD and file lawsuits stating that these products are unlawful unapproved new drugs, which constitutes a deceptive trade practice under various state laws… And exhibit one will be all of FDA’s pronouncements that CBD in food and supplements are not lawful.”

‘File a GRAS notification with FDA or a New Dietary Ingredient Notification (NDIN) and the FDA will have no choice but to deal with it’

But Harrison added: “Here is a simple solution: File a GRAS notification with FDA or a New Dietary Ingredient Notification (NDIN) ​[for a hemp extract that contains CBD] and the FDA will have no choice but to deal with it. Provide the safety data and consumption data to show it meets the regulatory standard and stop hiding behind questionable legal theories.

“Rather, address it straight on and state that the preclusion issue ​[that CBD was first investigated as a drug and therefore can’t be a legal dietary/food ingredient] is a red herring ​[when it comes to hemp extracts] and FDA knows it.”

“The reality is these people are criminals and the federal government has allowed this to go on… There is no regulatory ambiguity. You guys​ [the FDA] have said, don’t sell this stuff, it’s illegal.

“These guys have been operating for years and they have ignored you…  the only way it will be different is if you enforce it…

“Right now we have about 1,000 lawsuits against the opioid industry and if our dreams come true we will have the same thing going against the marijuana industry in the near year or two."

David Evans, general counsel, Cannabis Industry Victims Educating Litigators

Hemp extracts and isolated CBD are not the same thing  

A hemp extract that contains naturally occurring low levels of CBD is “simply not the same article that was the subject of an investigational new drug (IND), substantial clinical trials, and most recently FDA-drug approval,” ​claimed Harrison.

“Hemp extract is not an article that is ‘approved’ or ‘investigated’ as it has not been studied to treat any disease… the hemp-derived CBD used in foods and supplements has no resemblance to the pharmacological composition of ​[the cannabis-derived drugs] Epidiolex or Sativex in terms of form, purity, potency, pharmacological action, strength or centration, indicated dose or intended use. 

“As such, hemp extracts are not excluded from the dietary supplement definition and it is therefore permissible to market these products in the United States​ [provided they comply with existing regs covering foods and supplements].”

Attorney: 'Do not expect any sudden movement by the FDA'

Angela Spivey, partner at law firm Alston & Bird, said it may not be this clear cut, however: "An extract other than CBD or THC can theoretically reach market via the GRAS pathway. But it’s an open question as to whether a hemp-derived compound that includes CBD could get to market this way. FDA did not explicitly address whether CBD isolate should be regulated differently than broad or full spectrum hemp extract."

She added: "Overall, acting FDA Commissioner Dr. Ned Sharpless’ comments seem to suggest he may take a harder line than the former Commissioner Dr. Scott Gottlieb in finding a path forward for use of CBD in food and dietary supplements... He​ discussed the 'real risks' he perceives THC and CBD to pose and expressed that 'critical questions remain about the safety of widespread use.'  

"In short, do not expect any sudden movement by the FDA to forge a path forward to allow CBD in FDA-regulated products. That being said... FDA acknowledged the horse is out of the barn and although this concerns Commissioner Sharpless, the FDA did not signal an intent to corral the herds absent unfounded health or disease claims."

CBD: An 'attractive target for the plaintiff's class action bar'

Asked about whether CBD could become fertile territory for the plaintiff's bar, she said: "In the consumer class action labeling arena, potential damages are driven largely by sales of the product at issue – the higher the sales, the higher the potential recovery.  So as sales of CBD – infused products increase, this becomes a more attractive target for the plaintiffs’ class action bar. 

"Potential claims under various state consumer protection statutes include challenges to products’ health claims and claims related to inaccurate CBD content claims."

Saul Ewing Arnstein & Lehr attorney Jonathan Havens added: "I think plaintiff’s attorneys will go after low-hanging fruit... for example, if a product’s labeling states that it contains 40 mg of CBD per serving, but it actually contains 10 mg, or no CBD at all. Similarly, if a product says THC-free but it actually contains a detectable amount of THC.

"Another area of litigation could arise from the premium prices that are being charged for some products in the space that do not deliver the results promised.  If a marketer is charging, say, $150 for a 2 oz. CBD-infused cosmetic product that promises certain things, plaintiff’s attorneys could argue that the marketer was unjustly enriched if the product doesn’t perform as promised."

Meghana Shah, partner at Eversheds Sutherland, said: ​"The most likely claims... may be deceptive trade practices or other misrepresentation-type claims that speak to the statements being made about what the CBD products can do for health or well-being, or a claim based on the sale of adulterated products that contained harmful compounds other than CBD. 

"While it’s possible plaintiffs’ lawyers could premise claims on the FDA prohibition that seems less likely in view of the open dialogue that FDA is enabling."

Aaron NOW Health

"The current approach taken by FDA, which seems to be best described as unofficial enforcement discretion, does little to promote and protect the public health, the primary mission of the agency.

"By not enforcing the current statutes, the agency has encouraged irresponsible, or at best uneducated and uninformed, companies to manufacture and market CBD and other hemp derived products without understanding in many instances the identity of the ingredients... and without any safety studies...

"We respectfully ask the FDA to... either enforce the current statutes and hold the companies responsible for manufacturing and marketing these illegal products, or we urge the secretary to exercise his authority under current statute to allow hemp-derived products such as CBD to be recognised as legal dietary ingredients provided an NDIN is submitted and all the applicable federal laws are met.

"This will encourage responsible companies to enter the market through the front door."

He added: "We do not believe the agency should accept self-affirmed GRAS as a way to circumvent the NDIN process as it relates to CBD and other hemp-derived ingredients."

Aaron Seacrist, VP quality and regulatory affairs, NOW Health Group

CV Sciences: New FDA rulemaking is not required if FDA provides clear industry guidance to the type of ingredients allowed in each FDA-regulated category

Doug MacKay, president at CV Sciences – which along with Manitoba Harvest, has self-affirmed​ the GRAS status of its hemp extract – stressed that “current FDA regulations allow naturally derived ingredients to co-exist as conventional foods, dietary supplements, and drugs.”

He added: “New FDA rulemaking is not required if FDA provides clear industry guidance to the type of ingredients allowed in each FDA-regulated category.

“Scientific and legal experts agree that a hemp extract containing a full array of cannabinoids and other plant constituents is a significantly different article than a highly purified CBD.  

“FDA guidance that differentiates a hemp extract from a prescription CBD would allow companies to confidentially file the requisite NDI notifications.”

Via comments submitted to the docket, United Natural Products Association president Loren Israelsen added: “The agency should consider carefully whether self-affirmed GRAS without notification is an appropriate means of safety assessment for CBD/hemp extracts.”

"Without FDA's guidance and leadership, individual states may carve our their own regulatory exceptions for CBD, creating a patchwork approach which will hinder the nationwide growth of this industry and endanger consumers."

Joseph Reardon, North Carolina Dept of Agriculture & Consumer Services

'A tsunami of class action litigation'

The fact that the CBD used in some of the clinical trials referenced at the meeting is not the same as the broad or full spectrum hemp extracts included in many foods and supplements, is not just important from a legal perspective, stressed Anthony Almada, president and CSO at nutritional technology consultancy IMAGINutrition.

It also means that assumptions about safety and efficacy for hemp extracts are just that: assumptions, he said, adding that there is also no evidence that hemp flower extracts marketed for CBD content - while different from isolated CBD used in drug trials - have been in the food supply for decades.

"The human safety evidence on CBD (including that from the WHO), almost without exception, is based upon short term exposure to a drug shape CBD that is very different from commercially available extracts of hemp."

The terms 'full spectrum' and 'broad spectrum' are also misleading, he claimed. "They are all partial or fractional spectrum, at best, and zero spectrum at worst​.

"The prevalence of questionable products may inspire a tsunami of class action litigation. One large legal team has already begun performing its analytical due diligence, on dozens of products… Will the wave of vilification vitiate the authentic and real brands? At least one lawyer can’t wait to litigate..."

'There is still so much we do not know about CBD'

His comments came as successive speakers at the hearing shared data revealing sharp discrepancies between the actual and stated levels of CBD in many products currently on the market, while Alice Mead, VP at GW Pharmaceuticals (the firm behind CBD-based drug Epidiolex) highlighted "powerful drug drug interactions with other medications like warfarin, a common blood thinner. This can cause these drugs to have stronger or weaker effects than intended."

She added: "There is still so much we don't know about CBD."

Brian Sylvester

According to Brian P. Sylvester, special counsel at Foley & Lardner LLP, some additional questions that will need to be addressed going forward include:

"Should CBD produced from genetically modified microbes​ (outside of the plant) be subject to a distinct premarket review process from plant-derived CBD? Would the regulatory status of CBD be the same or different if the regulatory sequences used to modify the microbes stem from pathways similar to those of hemp as opposed to marijuana?

"How will the FDA and the DEA interpret their statutory mandates? Since CBD can also be derived from marijuana, a schedule I drug subject to DEA oversight, will FDA and DEA exercise joint oversight to confirm the source of CBD​ in food and dietary supplement products?"

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