CBDs May Not Be As Legal As You Think

Recent developments regarding CBDs emphasize just how confusing this area of cannabis law and regulation is. In some states it is legal to manufacture and sell products containing CBDs, while in other states, not so much.

The first thing to understand is that hemp is a variety of the cannabis sativa plant, just like what most laypeople think of as “marijuana.” To the extent that “cannabis sativa” is a controlled substance under federal law – and it is – hemp and CBD oils derived from hemp are illegal as a matter of federal law. While the federal Drug Enforcement Agency (DEA) has taken the position that certain parts of the marijuana plant are exempt material as far as the Controlled Substances Act (CSA) is concerned, as a practical matter, you cannot really extract much CBD from that exempt plant material. If you want CBDs, you need hemp.

On the federal level, the 2014 Farm Bill allows states to set up pilot programs for industrial hemp, provided the hemp has less than 0.3% THC on a dry weight basis. The Farm Bill overrides the CSA when the two conflict, so the DEA cannot use its enforcement authority with respect to CBDs derived from industrial hemp that has been grown pursuant to a state’s industrial hemp program. Consequently, as far as federal enforcement goes, extracts containing CBD derived from industrial hemp grown under a Farm Bill program are exempt.

The problem is, not every state has a Farm Bill program. For example, Kentucky has a farm bill program, and therefore CBDs derived from industrial hemp grown through that program are legal…in Kentucky. The confusion surrounds the question of whether products containing CBDs from a state that has a Farm Bill program can be sold in a state that does not have a program.

That’s where Ohio comes in. Ohio does not have a Farm Bill program. The Ohio State Board of Pharmacy has taken the position that Ohio’s Medical Marijuana law “made no exception for possession or sale of CBD oil. HB 523 includes CBD oil in the definition of marijuana, regardless of whether it is a plant extract or synthetic product.” Consequently, according to the Board of Pharmacy, CBD oil “can only be dispensed in a licensed Medical Control Program dispensary.” The Board of Pharmacy has sent agents around to various Ohio retailers of CBD products over the past few months, informing them of this prohibition. While the DEA cannot pursue such retailers, Ohio is claiming that it can under state law.

Consequently, retailers in a state that does not have a Farm Bill pilot program for growing industrial hemp should be very careful about selling CBD products, even if those CBDs are coming from a state with a Farm Bill program.

Even if a state does have a Farm Bill pilot program, there may still be regulations on how CBDs can be sold. For example, Indiana has a very strict product labelling law. CBD products must bear a QR code, which when scanned directs the consumer to detailed information, including the product’s batch number, expiration date, ingredients, and independent lab analysis. CBD products sourced from another state with a Farm Bill program may not be packaged properly for sale in Indiana. Retailers who fail to comply face fines of up to $10,000, and could lose their retail license.

Another state-specific wrinkle is California. While medical and adult-use marijuana are now legal in California, the state Department of Public Health has ruled that CBDs, even if sourced from industrial hemp, cannot be added to any food or beverage product, whether for human or pet consumption. So forget about that CBD beer, or chewing gum.

Note, also, that the federal Food and Drug Administration (FDA) has taken the position that it is illegal to “introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which THC or CBD has been added.” Consequently, while the DEA may not pursue sellers of food/beverage products containing CBDs, the FDA is another matter. The FDA also has sent cease and desist letters to CBD manufacturers and sellers that have made medical claims about CBD products.

If you’re confused, don’t feel bad. It’s very confusing. The bottom line is, if you are going to be involved in this industry, whether legal cannabis or CBDs, make sure you do your homework.