By Steve Sarich
On December 21st, 2018, I posted a story I called “What did the FDA bring you for Christmas”. This story was meant as a ‘wake-up call’ to the hemp/CBD industry in America. The story was intended to let those of you in the industry know that the newest policy released by the FDA was a ‘warning shot’ over the bow of the CBD industry in America.
The responses ran the gambit, from those I referred to as the “Wishful Thinkers”, who would prefer to ignore a problem than acknowledge it, and hope that it would simply go away, if ignored long enough, to those who were rightly concerned about the future of their businesses….and still should be.
Some accused me of trying to ‘spread panic’, for some unexplained personal gain. I should point out that I am neither, growing hemp for CBD, or selling CBD products, at least at this time, so I have no dog in this fight.
My only intent was, and is, to warn those in the industry of a real-life threat to that industry, and that threat has absolutely not gone away at this point.
Within the first 10 days, after I posted my article, there were seizures by the US Postal Service of CBD products, produced by Chris Martin’s company in Arizona, followed by an FDA raid, without a federal warrant, of a store in Yuma, Arizona, in which they confiscated CBD products. While these were not the only product seizures during this time period, my next article will focus on some attention on this particular raid, because it will help explain the rest of this story and what you can expect in the future from law enforcement and regulatory agencies in the US and Europe.
I didn’t offer any solutions in the first article, because, frankly, I didn’t see any at that point. I hadn’t had the time, nor the facts, that I have now, to offer more insight into this issue, let alone be able to suggest any solutions. Now I have more of both.
This article will likely be the first of several on this issue because those that have visited this plague on our CBD/hemp industry were very clever and the explanations are not simple. What I’m going to attempt to do in this first article is to explain the fallacies of the FDA’s position on hemp-derived CBD products and how you can take the first steps in defending yourself from the type of raids, and seizures, we’ve already seen since December 26, 2018.
These are complicated legal issues and I’m going to attempt to explain them as simply as humanly possible. Before I go any further, I realize that there are those of you in the industry that may want a more thorough legal explanation than what I’m providing here. If you do, please contact me privately.
So let’s get down to the meat of this issue. On December 20, 2018, the FDA put out a press release explaining their latest position on CBD. While this was a very long statement, I’d like to get to the issues where the FDA is completely wrong.
The FDA stated the following in their press release:
“Additionally, it’s unlawful under the FD&C Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived. This is because both CBD and THC are active ingredients in FDA-approved drugs and was the subject of substantial clinical investigations before they were marketed as foods or dietary supplements. Under the FD&C Act, it’s illegal to introduce drug ingredients like these into the food supply or to market them as dietary supplements. This is a requirement that we apply across the board to food products that contain substances that are active ingredients in any drug.”
For the FDA to say that it makes “no difference” whether or not CBD is “hemp-derived” or not, flies in the face of the 2004 Federal Court Ruling in HIA v. DEA. The Court ruled that there is a very clear difference between CBD and THC derived from hemp and those same cannabinoids derived from ‘marijuana’.
CBD & THC are already legally part of food products that have now been determined to be GRAS, or “generally recognized as safe”, by the FDA, in this very same press statement. Both hemp oil and hemp seed contain both substances, and the FDA is well aware of that. These two substances have also been in both food products and dietary supplements long before GW Pharmaceutical submitted their CBD product for FDA approval, contrary to the FDA’s statements. This argument has already been settled by the Federal Court of Appeals in 2004 and has never been challenged. It is still the current law of the land, which trumps the FDA’s ‘opinion’ on this issue.
So if the CBD contained in industrial hemp, has now been determined as “generally recognized as safe” in food products, by the FDA, and has been determined to be a different substance than CBD or THC produced from marijuana, by the Federal Courts, how can the FDA now claim that there is no difference whether those substances come from marijuana or hemp?
The fact is that the CBD that is contained in Epidiolex, is a Schedule 5 drug under the Federal CSA, while all substances that are contained in ‘hemp’ have been removed from the Federal CSA and been determined to be GRAS by the FDA themselves. So anything contained in the seed or oil of the hemp plant can now be added to both food and dietary supplements, in any form you choose.
So let’s take this argument one step further. When we are talking about CBD from hemp, this substance would now, under the FDA’s own rule, be considered a “botanical substance” and would not qualify under FDA rules as either a “drug ingredient” or as an OTC (over the counter) drug ingredient.
The same goes for isolates. Epidiolex contains an isolate from a Schedule 1 drug, and is itself, a Schedule 5 CSA substance. It’s not a “botanical substance”. It’s considered a “synthetic substance” because it’s a single molecule substance. Isolate extracted from hemp, on the other hand, is still just an extract of a non-CSA scheduled plant that has never been used as a component of any FDA approved drug, so it cannot be considered a “drug ingredient”.
So, contrary to the FDA’s statement, where the CBD comes from does, absolutely matter, both under the FDA’s own rules, as well as the current case law from the Federal Courts.
So let’s talk about how you, as a CBD product manufacturer can take steps to protect yourself from the seizure of your products from the USPS and FDA, or, at the very least, give you legal recourse to prevail in court should they insist on taking illegal action against you.
I was truly disturbed to hear from an industry insider that there are actually a number of companies out there producing CBD products that have removed any mention of CBD from their labeling!
I can’t imagine who told you to do that, but if they have a law degree, or you paid them for this advice, please take my advice and fire them immediately. Tomorrow would not be too soon. Mislabeling your products can subject you to incredible liability risks that you have apparently not considered when you made this foolish decision.
First, there are numerous documented reports of individuals that have ingested CBD products and have experienced “psychoactive type reactions” to this CBD, some to the point where they stated that they didn’t feel that they were safe to drive a motor vehicle.
While the FDA rules on dietary supplements do not require that you put a warning regarding this issue on your labeling, if someone were to claim that they got in a motor vehicle crash due to impairment caused by the product you sold them, and the CBD did not appear on the label of that product, you will have no defense in court from an experienced attorney and you could very well lose your company, or worse.
The other reason you don’t want to leave this information off your labeling is simply that the very fact that your product contains hemp extract’ will help protect you from a seizure of your products by the FDA and USPS!
I don’t have to tell you not to make any medical or health claims on your labels, but here is the wording I suggest to help protect your company from the Feds:
“This product contains cannabidiol (CBD), a beneficial plant extract, made from American grown hemp.”
This clearly shows where the CBD came from, hemp not marijuana, and that it’s a plant extract, and not a “drug ingredient”. The word “beneficial” is not a claim that you are required to prove, according to the FDA’s rules, nor is the word “natural”, and you can add that if you like too. If your CBD didn’t come from “American Grown” hemp, just replace that with “industrial hemp”.
This wording should work if you are using full-plant, crude, distillate, or even isolate. However, I should point out that the FDA does NOT agree with me on the isolate argument. But if you add this to your label, without spelling out that the product contains isolate, the statement alone should stop them from seizing your products. If you are selling products to those who have decided to use this CBD for health reasons, by all means, stop using isolate. This will be more beneficial for your customers and definitely provide you with much stronger legal protections! Win-Win!
In the next installment, I will explain how I know that this legal argument will work, and I will explain how the “nefarious” people are already aware of this! I will also explain along why only some, and not all, of Chris Martin’s CBD products, were seized by the FDA.
This is just the tip of the iceberg, folks, and now you understand why this is just the first of a series of articles that I intend to write that will both help protect you, expose the nefarious players in this industry, and warn you about new regulatory dangers that are absolutely headed your way, in time for you to protect yourselves and your businesses.
If you found this article useful, please share it around among your friends in the industry. The better-educated everyone is, the better chance we can fight off the assault that I still believe is headed our way, and not just in the United States.
Chiang Mai, Thai