FDA Spanks CBD Companies. NY Spanks Back.
You may have read the headline on social media article about the FDA’s recent action against numerous CBD companies. If you did, good. If not, let’s dish. I’ve got some more inside baseball around CBD that is juicy (especially for a gossip such as myself), yet troubling.
On November 25th, 2019, just when CBD manufacturers thought it was safe to focus solely on turkey and pumpkin pie, the FDA sent out warning letters to 15 CBD companies.
The FDA’s position is unchanged from what I covered in my CB-Do’s and CB-Don’ts Webinar way back early this year: CBD isn’t a dietary supplement and it’s illegal to put in food.
Here is the list of the 15 companies with links to their letters:
- Koi CBD LLC, of Norwalk, California
- Pink Collections Inc., of Beverly Hills, California
- Noli Oil, of Southlake, Texas
- Natural Native LLC, of Norman, Oklahoma
- Whole Leaf Organics LLC, of Sherman Oaks, California
- Infinite Product Company LLLP, doing business as Infinite CBD, of Lakewood, Colorado
- Apex Hemp Oil LLC, of Redmond, Oregon
- Bella Rose Labs, of Brooklyn, New York
- Sunflora Inc., of Tampa, Florida/Your CBD Store, of Bradenton, Florida
- Healthy Hemp Strategies LLC, doing business as Curapure, of Concord, California
- Private I Salon LLC, of Charlotte, North Carolina
- Organix Industries Inc., doing business as Plant Organix, of San Bernardino, California
- Red Pill Medical Inc., of Phoenix, Arizona
- Sabai Ventures Ltd., of Los Angeles, California
- Daddy Burt LLC, doing business as Daddy Burt Hemp Co., of Lexington, Kentucky
As you can see, the FDA didn’t pick on one geographic region. The love letters were sent to brands all over the country and even in weed-legal states.
The warnings all pretty much encompass the simple idea that since FDA says CBD isn’t a supplement, the brands are using an unapproved drug in their products. That, for the record, is very bad.
Some letters also scold them for selling poorly made products. A lot of the brands were found to be making improper claims about what their product is or does.
What’s your gut reaction at this point? I’ll tell you mine! “This is stupid. Cannabis and hemp prohibition is stupid. Everyone needs to get on the same legal page and develop a path forward to make quality products accessible to the masses without a massive pharmaceutical company getting exclusive distribution rights. Because then they’ll sell the product at a premium and pay kickbacks to certain insurance companies to get it covered and eventually also screw over doctors and pharmacists.”
You wanted to know my thoughts.
The CBD Legal Conundrum
CBD exists in this weird legal limbo. It’s not a dietary supplement, so say the dietary supplement people (FDA). It is legal as an approved drug in a high dose isolate called Epidolex. Some states say weed and everything extracted from it, including CBD, are legal but as cannabis products, not supplements. The federal government passed a hemp bill that makes hemp and hemp products legal.
It’s so legally confusing that some CBD shops are getting raided by local law enforcement who are enforcing federal laws that are in contradiction to the new state laws in one town, and nothing at all is happening a town over.
Accompanying these warning letters is further clarification from the FDA on their position.
Here’s a message to consumers directly from the FDA. In it, they stress that CBD isn’t an approved dietary supplement or food additive, that CBD safety data is generally unknown, that some CBD companies are jerks and are making outrageous claims, and that the FDA is trying to figure out what to do with this bucket of worms.
They do use harsh words about how CBD will melt your liver and murder you in your sleep. I think it’s a little heavy-handed, but I believe they’re doing so to point out there are risks; it’s not the angel the media is making it out to be.
The big thing they touch on in their communications (including an insider letter I got my hands on but I’m not sure I can share), is that CBD does not receive GRAS status.
GRAS is an acronym for Generally Recognized As Safe. Basically, if an ingredient was used historically and extensively, and/or is considered by smart expert-types to be safe, it can be used in foods.
CBD has a long history of use. Mainly via inhalation along with THC and greenery and predominantly done on the green in Woodstock.
The FDA is now saying, clearly, that there are safety concerns and it can’t be granted GRAS status, and therefore can’t be in foods. Sorry juice bars trying to make $40 on an almond milk berry smoothie…
“This isn’t really groundbreaking. I don’t care what the FDA says. Was this worth writing a whole article about, Neal?” Wow, so harsh. Is it the holiday stress that’s got you a little testy?
There is something much bigger on the horizon that is starting to rain down on CBD brands. Let’s talk about an interesting court case...
You Can Be Sued For Selling Garbage Supplements
Supplement law nerds are watching a court case as it has tremendous implications for the industry.
Basically, an appeals court said it is legal to have a class action suit against a supplement company because of the presence of an illegal ingredient.
You know what Johnny Cochrane said: “If the product is adulterated, you’re gonna get obliterated… financially.”
Marc Ullman, lawyer, supplement law guru, and The Big Mouth Pharmacist Podcast guest predicted that this ruling could be especially troubling for CBD companies. CBD is illegal, per the FDA, so then you could technically sue a CBD company for… whatever you’d sue for.
Marc the soothsayer was correct. Look what just happened:
Yup, Charlotte’s Web, the big company with the unique story that launched the CBD trend is being sued because they marketed their product as a dietary supplement. Yikes.
Let’s unpack this a bit:
The ability to sue a supplement company in a class-action suit for adulteration could be excellent for consumers. If brands know that blood-sucking aggressive lawyers can start a suit if your product was adulterated, they probably will take better care to ensure that doesn’t happen.
Most of the problem with supplement quality right now is due to unsavory characters cutting corners as a calculated risk. The math may shift, increasing the barrier to entry and forcing the disreputable players to shape up or ship out.
Second, yikes again. CBD is about to get its teeth kicked in a bit. In New York, there are now over 400 hemp growers over 18,000+ acres, where there were less than 100 two years back. Let’s be clear: they’re not growing this for rope. Everyone’s trying to cash in on the CBD oil craze.
With no guidance from the FDA besides “it’s illegal, but we’re thinking about it” people are getting quite concerned. Amy Schumer’s uncle even sent a message to the FDA asking them for clarity for New York’s sake.
Have no fears New York, New York is coming to your rescue…
New York’s New CBD Law
Governor Cuomo signed a bill no more than 48 hours ago that puts in place a legal framework for hemp and CBD products.
It has provisions for where the CBD can come from (New York only), outrageous medical claims, testing, and labeling.
I have to say that I did my rounds in Albany last year telling congresspeople my concerns, and I hope some of the stuff I said stuck with our legislators!
They did not make a decision about CBD in food, so that’s still super illegal.
I’ll discuss the specifics once I take the time to read this bill. Right now, all we need to know is that CBD is cool by Cuomo.
How will this all shake out on the Federal vs State debate? I go with state’s rights. CBD FOR EVERYONE!
Till The Next Episode...
I wrote all of that to say this: I don’t know where this is all going. I hope you’re sitting at the edge of your seat waiting for all this CBD fun to unfold. If you’re investing in CBD companies, I’d recommend shifting to something more stable, like Trump golf courses.
I have no real closure to this article except to say thanks to our compliance lawyers for providing frequent updates on the regulatory scene. They provided the references for this article today. Rivkin Radler LLP is a NY/NJ based group that has a great supplement compliance mailing list that goes out. Visit the site, scroll down and subscribe.
If you want to hear Marc Ullman, our counsel at Rivkin Radler, you can do so by listening to our podcast with him. We talk CBD and more.
This CBD trend has lead to so much... well, trash... reaching customers. The confusion over proper use, dosing, dosage forms, and more has most people’s heads swimming. We’ve attempted to clarify much of it at our CBD page. I applaud New York’s quick efforts at putting some laws on the books to help ensure people are protected.
This isn’t the last of it, by far. Until the next episode of “As The Hemp Bud Turns,” CBD-ya later!
Just trying to keep it real...
Neal Smoller, PharmD
Owner, Pharmacist, Big Mouth