Guide to Success for Hemp-Based CBD Companies in the Post 2018 Farm Bill Era: Verifiable FDA Mandated Food and Supplement Product Safety

Jan 28, 2019 Washington, D.C.,

Fasten your seat belts for the next stretch of the road toward fully national sales of hemp-derived CBD products. We predict that those who move quickly to meet first in class dietary supplement and food safety standards, as required by the Food and Drug Administration (“FDA”), will be the long-term winners in the national marketplace.

The 2018 Farm Bill was signed into law in December removing hemp and its extracts, cannabinoids and derivatives from the Drug Enforcement Agency’s list of controlled substances under the Controlled Substances Act. So long as the THC level in hemp-derived CBD products is at or below 0.3%, federally regulated institutions, such as pharmacies, banks, credit card companies and ecommerce sites now have a pathway for operations in the space. This is a watershed for the hemp industry moving us to the next phase, where there will be both opportunities and challenges.

The new set of challenges stems from the regulatory oversight of the Food and Drug Administration, which regulates food and dietary supplements. Food and dietary supplements, which according to the FDA, would include CBD products, cannot be marketed without FDA acceptance of the safety of the dietary supplement ingredient or food additive.

Hemp CBD companies would be lining up at FDA to gain these approvals but there is a hitch: for now, FDA’s position is that CBD has already been approved as a drug (Epidiolex) and so the same “article” cannot be a food additive or dietary supplement ingredient. The FDA will likely soften its position over time, but not immediately.

In this fluid environment, hemp-derived CBD companies should start the process of establishing and documenting food and dietary supplement safety according to FDA requirements as they are now. Food and supplement safety should be these companies’ highest priority.

In order to do so, CBD companies would take the following steps:

Begin the process of establishing the safety of the product by taking the steps to meet FDA’s requirement for “Generally Recognized as Safe” (GRAS). Establishing GRAS is a process that typically takes about 18 months to complete. The company must: 1) develop a science dossier of publicly available information showing that there is a consensus in the scientific community around safety for the specific use; 2) if needed, obtain a toxicology lab study; 3) convene an expert science panel. This is basis for FDA GRAS.
Establish Good Manufacturing Practices (“GMP”) product quality practices. FDA will require that CBD dietary ingredient suppliers and CBD food companies establish cGMPs (“Part 117”) and manufacturers of finished products (“Part 111”) according to the FDA requirements.

Greenspoon Marder can work with hemp CBD companies to take these important steps toward being first in class and ready for the national marketplace.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 240 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has upheld a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

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Guide to Success for Hemp-Based CBD Companies in the Post 2018 Farm Bill Era: Verifiable FDA Mandated Food and Supplement Product Safety

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