As the market for hemp-based products takes off, many investors are grappling with the gray area in which hemp products are commercialized in America. In particular, the increasing demand for cannabidiol (CBD) has resulted in the proliferation of a wide variety of products available over the counter from many retailers.
Many companies are eager to enter the growing market, but the legal framework is very unclear to many manufacturers and consumers. Industry stakeholders, state and federal legislators, and courts in the United States are therefore putting pressure on the Food and Drug Administration (FDA). This agency oversees and regulates the approval process for the marketing and sale of CBDproducts that are added to foods, medicines or cosmetics.
Laws and regulations for CBD
Developing regulations is a slow process. Retail sales of CBD products have skyrocketed since the passage of the 2018 Agricultural Improvement Act (better known as the 2018 Farm Bill). The Farm Bill has removed hemp from the Controlled Substances Act, paving the way for legal production, commercialization and use of products made with hemp and its derivatives. Except derivatives containing more than 0,3% delta-9-tetrahydrocannabinol (THC).
The 2018 Farm Bill also affirmed the FDA's authority to regulate CBD as a substance within the scope of the FD&C Act when added to foods, drugs or cosmetics.
To date, the FDA has approved only one CBD pharmaceutical product (Epidiolex). The drug is used to treat rare epileptic conditions. However, it has not approved CBD as an ingredient or additive that is "generally recognized as safe" under the FD&C Act in dietary supplements and other nutritional products. With developments in hemp and cannabis laws in the spotlight nationally, the FDA has begun to pay more attention to the control of CBD products.
Strict control of CBD products
Since 2015, the FDA has issued more than 50 warning letters targeting CBD companies for inadmissible marketing and labeling practices. The point of view is that companies should never claim that their CBD product has medical applications or therapeutic benefits. An example of this is advertising CBD products for treating conditions such as arthritis, cancer and even COVID-19.
The FDA also objects to CBD labels with claims of medical or therapeutic benefit when there are no complete or accurate instructions to the consumer on how to use the CBD product safely. The FDA further notes that some of these CBD products are marketed as health foods and nutritional supplements with medical uses or therapeutic benefits. This is also inadmissible. When the marketing or label contains a health or wellness related claim, it can lead to a thorough investigation.
The number of CBD-specific warning letters sent in 2019 and 2020 showed a marked increase in FDA research on CBD products. On December 22, 2020, the FDA announced that its latest round of warning letters had been sent to companies that market nasal products (e.g., nasal spray), inhalation products (e.g., vapor sticks), and ophthalmic products (e.g., eye drops) containing CBD with medical claims . The FDA stated that these products are of particular concern because of the route of administration and pose a significant risk to public health.
Practical guidelines for CBD companies
Despite its enforcement efforts, the FDA continues to emphasize its support for the development of CBD products. On December 17, 2020, the Federal Trade Commission (FTC) announced that it had launched Operation CBDeceit: the first major crackdown on CBD companies for marketing CBD products falsely claiming to treat serious medical conditions such as cancer. despite not being scientifically supported. Contrary to warning letters from the FDA, FTC handed out fines. Five of the six sanctioned CBD companies have to pay fines ranging from $ 20.000 to $ 85.000. It is therefore advisable for CBD producers and sales parties to handle marketing and labeling with care.
In addition, CBD companies must carefully monitor regulatory developments and regularly review how such developments align with their business activities.
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