Tag: cbd

  • Routine Failure

    Routine Failure

    The US Supreme Court to decide if a failed routine drug test amounts to racketeering.

    By Timothy S. Donahue

    The U.S. Supreme Court has been busy this session. The court has heard several cases dealing with the nicotine and cannabis industries. Among them is the case of a truck driver who was fired from his job after a CBD wellness product marketed as THC-free caused him to fail a routine drug test. Douglas Horn sued the maker of the CBD product he took for chronic pain under a federal racketeering law for economic harm.

    A decision in the case, expected next year, could determine the ability of Americans to collect substantial damages under an anti-mob law if they lose their job after being injured by consumer products.

    The companies that manufacture the product argued to the justices that Horn’s injuries were personal rather than related to any harm to his business or property. Therefore, they contended that his case did not fall under the Racketeer Influenced and Corrupt Organizations Act (RICO). This federal law, originally enacted to combat organized crime, establishes the right for individuals who suffer injuries to their business or property due to racketeering activity to seek triple damages.

    A longtime trucker, Horn had an unblemished record over his decades of service. Like many truckers, Horn’s job required frequent drug testing to ensure compliance with federal regulations, particularly given the risks associated with operating heavy machinery on the nation’s highways. A single failed drug test could cost him his commercial driver’s license and, consequently, his livelihood.

    In 2020, Horn began experiencing chronic pain due to the physical demands of his job. After researching various treatments, he turned to CBD products for relief. CBD, or cannabidiol, is a nonpsychoactive compound derived from the cannabis plant and is widely marketed for its potential therapeutic benefits, such as pain relief and reduced anxiety. Significantly for Horn, the CBD products he chose were advertised as containing no THC—the compound in cannabis that is responsible for its intoxicating effects.

    Relying on these assurances, Horn began using CBD products regularly. While CBD is entirely legal, THC remains illegal in certain contexts. However, during a routine drug test, he tested positive for THC. Despite his protests that he had only used CBD products labeled as THC-free, Horn was promptly suspended and later terminated from his job. Unable to find another position due to the failed drug test, Horn faced financial ruin.

    Horn filed a lawsuit, claiming that the producers of Dixie X committed mail and wire fraud that resulted in harm to his “business or property.” A federal district court ruled against Horn, but the New York-based 2nd U.S. Circuit Court of Appeals allowed his suit to move forward. The company appealed to the Supreme Court a year ago, arguing in part that the RICO Act never contemplated “garden-variety products-liability” suits. The justices agreed to hear the case, recognizing its broader implications not only for the CBD industry but also for the interpretation of federal law and consumer protection standards.

    The CBD companies argued that they were operating within the bounds of federal law, particularly under the 2018 Farm Bill, which legalized hemp-derived CBD products with THC levels below 0.3 percent. They contended that any trace amounts of THC in their products were legal and that they had not intentionally deceived consumers. The companies also asserted that RICO was not the appropriate vehicle for this type of claim, arguing that it was intended to address criminal enterprises, not businesses engaged in legal commerce.

    However, Horn’s legal team countered that the companies’ actions constituted a pattern of fraudulent activity, directly causing harm to consumers like Horn. They argued that RICO could be applied in this case because the companies knowingly misled consumers about the contents of their products, thereby violating federal laws and causing tangible damages.

    Lisa Blatt, representing the manufacturers, stated during the hearing that Horn’s unwanted ingestion of THC constituted an injury to his body—essentially a “personal” injury—and not an injury to his “business or property.” She argued that Horn’s economic losses were the “damages he sustained” due to that injury.

    Easha Anand, representing Horn, argued that the lost employment is an injury to “business” that should bring the case within the wheelhouse of RICO. The lower court agreed with Horn, permitting his suit to proceed before the companies took the case to the Supreme Court. The American Association for Justice agreed with Anand and urged the Supreme Court to side with the trucker.

    Unlike its criminal counterpart, the companies contend that the civil RICO statute explicitly states that a plaintiff must be “injured in his business or property.” They argued that this wording indicates an intent to exclude the other primary type of injury recognized by the law —injury to the person—typically the basis for hiring “personal injury” lawyers.

    Horn’s premise—that civil RICO is available if the “personal” injury leads to “business or property” damages—would have sweeping implications, the companies argued, making RICO available to any tort plaintiff who can produce a receipt for lost wages or other economic loss. And the Clayton Act, a critical antitrust statute, Blatt told the justices, limits private suits to plaintiffs with injuries to “business or property,” for which the Supreme Court routinely has rejected personal injury claims. The same result, she argued, should apply here.

    For Horn, though, “injured” is the same thing as “harmed,” and the harm he suffered to his business (loss of employment) is a classic injury to business of the type that the civil RICO statute reaches. Anand also emphasized that in RICO, Congress made clear that the act “shall be liberally construed to effectuate its remedial purposes.” That rule of construction, she said, suggests that in the event of any doubt, the court should permit Horn’s suit to proceed.

    After more than an hour of argument, it appeared that the case could divide the court’s conservative justices, some of whom seemed sympathetic to Horn’s position and others wary of opening up the ability for people to seek significant awards for run-of-the-mill injury claims. During Anand’s presentation, Chief Justice John Roberts stated that the limitation on “business or property” is intended to be a significant constraint on the scope of RICO, which he views as central to the law’s purpose. He suggested that Anand’s position could undermine this important limitation.

    Justice Brett Kavanaugh was even more pointed, criticizing the idea that Horn could “get around that limitation … by characterizing the lost wages or medical expenses as separate injuries to your business or property.” And Horn’s position, Kavanaugh warned, would create “a dramatic, really radical shift in how tort suits are brought throughout the United States.”

    Justice Elena Kagan challenged Blatt’s reading of the text. Kagan pushed Blatt to assist her in figuring out “the most normal, natural reading” of the statutory language.

    “If you’re harmed when you lose a job, then you’ve been injured in your business, haven’t you?” Kagan asked the lawyer for the companies. The law, Kagan said, “just says if you’ve been injured by a RICO violation in your business, which includes your employment, then you’re entitled to threefold damages.”

    The Supreme Court’s decision in the Horn case could significantly impact both the trucking and cannabis industries. If the court rules in favor of Horn, it may lead to an increase in lawsuits against CBD companies, potentially changing the legal landscape for the industry, according to legal experts. Furthermore, such a ruling could prompt Congress to reconsider the 2018 Farm Bill and related legislation to establish clearer CBD product guidelines.

    If the court rules in favor of the CBD companies, it may enhance the current regulatory framework and limit the use of RICO in cases involving cannabis products that are legal under state law. This outcome could provide some reassurance to the cannabis industry, which has frequently encountered legal uncertainty due to the conflicting laws between federal and state regulations.

    The case not only affects the parties directly involved but could also establish a precedent for how courts manage disputes in industries where state and federal laws conflict. Additionally, it may shape how companies address advertising and product labeling in sectors with new and changing regulatory frameworks.

    Consumer protection advocates have also commented on the case, arguing that companies should be held accountable for their claims, particularly in industries where health and safety are at stake. They see the case as a critical test of whether existing laws are sufficient to protect consumers in the rapidly evolving cannabis market.

    The Horn case touches on fundamental issues of federalism, consumer protection and the intersection of law and commerce in a rapidly changing industry. For Horn, the case represents a fight for justice after a devastating blow to his career. For the CBD companies, it is a battle to protect their business practices and the legitimacy of an entire industry.

    Regardless of the outcome, the decision will likely have a lasting impact on the legal and regulatory landscape for CBD products, the trucking industry, and beyond. The Supreme Court’s ruling will not only decide the fate of one trucker but could also shape how emerging industries are regulated and held accountable under U.S. law.

  • Colorado CBD Company Settles Suit With State

    Colorado CBD Company Settles Suit With State

    Colorado US state flag with statue of lady justice, constitution and judge hammer on black drapery. Concept of judgement and punishment

    Bee’s Knees CBDs, based in Colorado, has reached a $225,000 settlement with the state attorney general after an investigation revealed that the company misrepresented its product offerings, falsely claimed partnerships with nonprofits, and failed to verify the ages of its customers.

    The fines could increase to $495,000 if the company fails to comply with the settlement’s terms, which include the initial $225,000 over a series of payments and the company’s pledge to “fully comply with state law” moving forward, Colorado AG Phil Weiser’s office said in a press release.

    Bee’s Knees sells industrial hemp-derived cannabinoid products both wholesale and on its website directly to consumers. While many of the company’s offerings include non-intoxicating products like CBD gummies and topicals, some of the products are infused with hemp-derived THC — and, while the website lists the products as being restricted to customers aged 21+, the products could previously be purchased without providing proof-of-age, the release said.

    Colorado Attorney General Phil Weiser, in a statement, said, “Colorado is committed to maintaining an effective system of overseeing the sale of legal cannabis products — one that keeps it out of the hands of kids, ensures safety standards, requires chain-of-custody tracking, and gives consumers important information about the products they buy, according to reports.

    “In this case, the company misrepresented to their customers the source and nature of their products and sold intoxicating products without verifying the age of customers. This settlement will hold them accountable for those violations of the law and will ensure compliance in the future.”

  • Industrial Sabotage

    Industrial Sabotage

    Credit: Stock Photo Pro

    The Mary Miller Amendment will kill the hemp industry, including its industrial sector.

    By Rod Kight, Jonathan Miller and Chris Fontes

    When the Mary Miller Amendment (MMA) passed the U.S. House Agriculture Committee, I wrote an article about how it is specifically designed to kill the hemp cannabinoid industry. Unfortunately, and even though this industry generated $28 billion in revenue last year, there are groups that want it dead, including a small cartel of marijuana corporate conglomerates who seek to destroy the hemp industry so they can control the entire cannabis supply chain to the exclusion of small hemp businesses.

    In addition to deploying millions of dollars into lobbying efforts to shut down the hemp industry, these conglomerates have launched a massive disinformation campaign about hemp products and child safety that is largely bereft of substantive factual support.

    But that’s not all. In addition to killing the hemp cannabinoid industry, the MMA will also kill the industrial hemp industry. Aside from the marijuana cartel, there are others who do not care about the hemp cannabinoid industry but who do care about industrial hemp. These groups are fine with the MMA because, to their understanding, it does not impact “industrial” hemp. This view is not only incorrect, but it is a direct result of the disinformation campaign referenced above. To be clear, the MMA will kill all hemp, including “industrial hemp.” This is because the MMA does the following:

    • It changes the definition of “hemp” so that total THC must not exceed 0.3 percent. Some people have argued that the MMA merely codifies current U.S. Department of Agriculture (USDA) policy in measuring THC in the field. That’s not true because the MMA goes well beyond measuring THC in the field to making a sweeping change to the current definition of “hemp” in the Farm Bill. Contrary to popular belief, THCa, the nonpsychoactive precursor to THC, is not mentioned in the Farm Bill’s definition of hemp. Importantly, it is not part of the legal “metric” for determining whether cannabis material is lawful “hemp.” In fact, the opposite is true. The current definition of hemp specifically includes its “acids.” (THCa is one of many acids the plant produces. The “a” in THCA stands for “acid.”) The only statutory reference to THCa in the Farm Bill is via an inference.

    The Farm Bill directs the USDA to use a “post-decarboxylation” method to test hemp in the field. This means that a hemp crop cannot be harvested unless it passes a total THC test, which accounts for the THCa concentration. In other words, even though THCa is never mentioned in the Farm Bill, it is implied by virtue of the required post-decarboxylation test that must take place before a hemp crop can be harvested. Once this test is passed, the hemp crop may be harvested. Thereafter, the concentration of THCa is irrelevant and, under the Farm Bill, the sole metric to distinguish between lawful hemp and unlawful marijuana is the concentration of delta-9 THC, not THCa. This is a critical point since most harvested hemp crops would fail if the THCa concentration was included as the compliance metric in defining harvested hemp, something that the MMA would require. Notably, grain crops require late flowering and will have no legal pathway if the MMA becomes law and “total THC,” rather than delta-9 THC, becomes the new legal compliance standard.

    • It excludes viable seeds from the definition of “hemp” when they come from a plant with total THC that exceeds 0.3 percent, even though cannabis seeds contain almost no THC, and the U.S. Drug Enforcement Administration itself considers them to be lawful. Notably, all grains, including hemp seeds, are “viable” before they are rendered nonviable.
    Credit: 24K Productions

    As discussed above, the MMA’s requirement that all post-harvest material pass a post-decarboxylation test would deem all hemp seeds from such plants to be Schedule 1 controlled substances. Given that as much as 88 percent of harvested hemp plants fail a total THC test and are illegal marijuana under the MMA, the grain market will collapse if the MMA is enacted into law. I should note that this specific provision has nothing to do with health, safety or anything else along those lines. Rather, it is solely about consolidating power in the hands of a few corporate marijuana conglomerates who perceive all competition, even from hobbyist home growers, as a threat to their bottom lines.  

    • It excludes “quantifiable amounts” of THC, including THCa, from the definition of “hemp.” Hemp is cannabis. It is not some other species of plant. One of the most notable and fundamental characteristics of the cannabis plant is that it expresses THC. By eliminating all THC, the MMA would render all hemp, including industrial hemp, a Schedule 1 controlled substance since ALL hemp plants express THC in quantifiable amounts.

    The founder of one of the top cannabis laboratories in the country informed me that his lab can detect THC at levels down to picograms per milliliter (0.0001). This roughly equates to a drop of THC in an Olympic-sized pool. Moreover, even if an industrial hemp plant could be grown with no quantifiable amounts of THC, the fiber market is not currently viable enough on its own to support an industry. It does not produce sufficient revenue to support testing labs, regulators’ budgets or the bottom lines of most businesses. Given time, this will change, but only if the entire hemp industry is allowed to survive and thrive.

    Rod Kight

    The MMA pulls the rug out from underneath the multibillion-dollar hemp industry that Congress created in 2018. This includes the grain and fiber sectors. Even though the MMA is promoted as an effort to close the so-called hemp loophole, what it will really do is kill the entire legal hemp industry while giving away billions of dollars to the illegal marijuana industry. If Congress truly believed that hemp products constitute a public health crisis, then it would have enacted legislation requiring the U.S. Food and Drug Administration or another federal agency to oversee it many years ago. The fact that it hasn’t done this belies the shrill cries of concern of the marijuana cartel’s disinformation campaign that mask its true intent to destroy its hemp competitor.

    Moreover, there are better ways to address safety than by killing the hemp industry, including by promulgating regulations that prohibit access by minors, mandating quality control in production and standardizing labeling so adults can make educated decisions about what products they choose to purchase. These three regulatory zones, what I call the “Three Pillars,” have been addressed in hemp industry-sponsored bills in state legislatures throughout the country, many of which have been defeated due to intense lobbying against them by the marijuana industry.

    Finally, for proponents of “industrial” uses for hemp who also think that it is OK to give the illegal corporate marijuana cartel a giveaway while destroying thousands of legal small businesses, be aware that MMA will kill the entire hemp industry, including the industrial sector that they purport to support. 

    Rod Kight is an attorney who represents businesses in the hemp industry.Jonathan Miller is general counsel to the U.S. Hemp Roundtable. Chris Fontes is president of the U.S. Hemp Authority.

  • Charlotte’s Web CBD to Elect 2 New Board Directors

    Charlotte’s Web CBD to Elect 2 New Board Directors

    Photo: Mariakray

    Charlotte’s Web Holdings will elect new directors at its annual meeting on June 13. The company has proposed reducing the number of directors from seven to six.

    The following directors’ terms on the company’s board of directors will expire effective June 13, 2024, and they will not stand for reelection:

    • John D. Held, who joined the board in May 2018 and serves as chairperson of the board and chair of the corporate governance and nominating committee;
    • Thomas Lardieri, who joined the board in August 2022 and serves on the corporate governance and nominating committee and as chair of the audit committee;
    • Alicia Morga, who joined the board in December 2022 and serves on the audit committee and the compensation committee.

    “Charlotte’s Web is grateful for the valuable contributions and guidance that each of these directors have provided during their time on the board. Their expertise and dedication have been instrumental in navigating through critical phases of our transformation in a challenging unregulated category,” said Charlotte’s Web CEO William Morachnick in a statement.

    The board has proposed to nominate the following current directors for reelection:

    • Jonathan Atwood, group head of business communications for BAT;
    • Matthew E. McCarthy (independent), former CEO and board member of Ben & Jerry’s Homemade and senior executive at Unilever;
    • Angela McElwee (independent), former president and CEO and board member of Gaia Herbs;
    • William Morachnick, Charlotte’s Web CEO and former president at Santa Fe Reynolds Tobacco International in Zurich, Switzerland.

    In addition, the board has proposed to nominate Jared Stanley and Maureen Usifer as new appointments to the board.

  • Legal Insight

    Legal Insight

    Credit: Federico Magonio

    By Jean Gonnell, Christina Sava and Nicholas Ramos (Troutman Pepper Hamilton Sanders Tobacco and Cannabis Team)

    Across the United States hemp products seem to be everywhere. From corner stores to spas, one can find a hemp- or CBD-infused version of almost anything. Hemp and its derivatives are found in foods, cosmetics, hand-rolled cigarettes and vape pens. A new category of “intoxicating hemp products,” such as delta-8 THC products, have taken the hemp industry by storm. Although the market is vast, the regulatory landscape contains many pitfalls. Potential market entrants must carefully research the applicable laws, and take into account any federal-level risks, before deciding to invest in a hemp or hemp-derived products venture. This article reviews the legal status of hemp-derived products, including smokable hemp products, at the state and federal levels.

    Marijuana and Hemp

    Marijuana and hemp come from the same plant: Cannabis sativa L., or “cannabis” for short. Cannabis has a long history of industrial and medicinal uses, and only a short history of prohibition, which we now see unraveling. “Hemp” is the common term for cannabis with a concentration of delta-9 tetrahydrocannabinol (“THC”) of .3% and under, while “marijuana” is used to mean cannabis with a delta-9 THC concentration over .3%.  Marijuana remains a Schedule I substance under the Controlled Substances Act (“CSA”). Hemp production, on the other hand, was legalized by the Agricultural Improvement Act of 2018, or 2018 Farm Bill. At that time, Congress removed “hemp” and “tetrahydrocannabinols in hemp” from the CSA’s definition of “marijuana.” Specifically, the 2018 Farm Bill defined “hemp” as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3% on a dry weight basis.” 7 U.S.C. § 1639o.

    So, although they are technically the same plant, hemp and marijuana fall under completely different regulatory regimes, with a single cannabinoid – delta-9 THC – determining whether a cannabis plant or product is hemp or marijuana.

    THC, CBD, and Other Cannabinoids

    There are over 100 cannabinoids found in cannabis. Perhaps the most well-known of these are cannabidiol, or CBD, and delta-9 THC. CBD is considered non-psychoactive and generally prized for its therapeutic potential. Delta-9 THC has long been recognized as the cannabinoid that causes users to feel “high.” Since the 2018 Farm Bill, however, other psychoactive THCs, such as delta-8 and delta-10 THC, have been identified in cannabis. The “high” produced by delta-8 THC has been described as partway between THC and CBD, with relaxing body effects and a less-potent “head-high,” while delta-10 has been described as producing a more cerebral high akin to sativa strains of marijuana.

    So why the boom in delta-8 and delta-10 THC products now? They can be derived from hemp. Although found in much lower quantities in hemp than other cannabinoids, manufacturers have found ways to chemically convert hemp-derived CBD into delta-8 and delta-10 THC. Even delta-9 THC is being converted from CBD, and manufacturers are adjusting product ratios to remain within the .3% limit. The Cannabis Regulators Association has called this the “0.3% loophole” and stated: “While the threshold of 0.3% delta-9 THC (tetrahydrocannabinol) by weight is a small amount of THC in a hemp plant, when applied to hemp-derived products (e.g., chocolate bars, beverages, etc.) which can weigh significantly more, 0.3% by weight can amount to hundreds of milligrams of THC. For example, a 50-gram chocolate bar at 0.3% THC would have around 150 mg of THC (30 times the standard 5 mg THC dose established by the National Institute on Drug Abuse).”[1]

    The Drug Enforcement Administration (DEA) more or less gave the hemp-derived delta-8 industry a green light in a September 2021 letter to the Alabama Board of Pharmacy. The Board of Pharmacy inquired as to the control status of delta-8 THC under the CSA. DEA concluded that “cannabinoids extracted from the cannabis plant that have a [delta-9]-THC concentration of not more than 0.3 percent meet the definition of ‘hemp’ and thus are not controlled under the CSA.” Thus, so long as delta-8, delta-10, and other extracts are derived from a cannabis plant with less than 0.3% delta-9 THC, they constitute “hemp,” which is federally legal.

    Notably, “synthetic tetrahydrocannabinols” remain a schedule I substance under the CSA. Some argue that because delta-8 and delta-10 are produced through a form of synthesis, they are Schedule I “synthetic tetrahydrocannabinols.” Regardless of this argument’s merit, this is not the position DEA has taken thus far, and we do not see any indication that they will suddenly take this position in the near future.

    FDA Enforcement and the Future of CBD Regulation

    Nonetheless, hemp-derived CBD and THC products are still not legal to be sold as a drug, dietary supplement, or food, according to the Food and Drug Administration (FDA). To the extent a manufacturer markets its delta-8 (or CBD) products as intended to affect the structure or any function of a consumer’s body, FDA’s position is that the product is an unapproved drug. In addition, “food” (almost anything edible that is not an approved drug or lawful dietary supplement) may not contain unapproved additives. Any form of CBD and THC are not approved food additives.

    FDA has also concluded that THC and CBD products cannot be marketed as dietary supplements, because the definition of “dietary supplement” excludes active ingredients that have been approved as drugs or have been authorized for investigation as a new drug. THC and CBD are both active ingredients in at least one FDA-approved drug. Other parts of the hemp plant that do not contain THC or CBD might be available for use as dietary supplements, so long as manufacturers abide by related requirements, including notifying FDA.

    And, FDA is watching the marketplace closely and taking enforcement action where it sees fit. FDA has issued numerous warning letters to companies selling hemp-derived CBD and THC products with impermissible health or therapeutic claims; for misbranding, such as lacking adequate directions for use; and for using these cannabinoids as an unapproved additive in foods, such as gummies, chocolate, caramels, chewing gum, and peanut brittle. The agency has also published a general health warning for delta-8 products.

    Industry and regulators alike have been anticipating some kind of regulatory action by FDA, but it appears this is yet far off. In January of this year, FDA determined that it does not have the appropriate regulatory pathway to regulate CBD products and called on Congress to pass legislation creating a new pathway separate from the food, drug, or dietary supplement pathway. Despite this regulatory uncertainty, sales of CBD products in the U.S. continue and could reach as high as $20 billion by 2025.

    States and Hemp-Derived Products

    Given the lack of federal standards and delta-8 and delta-10 (and likely other THCs’) psychoactive effects, state lawmakers are taking action to regulate products containing these extracts. At least 22 states have restricted or banned the sale of delta-8 THC products, while others are in the process of reviewing the cannabinoid’s status. One common way states are doing this is by limiting the total concentration of THC a product can have, rather than mirroring federal law and limiting only delta-9 THC concentrations. In Colorado, lawmakers have passed SB23-271, which goes further and actually classifies nonintoxicating cannabinoids, potentially intoxicating cannabinoids, and intoxicating cannabinoids. Products will be regulated according to which category of cannabinoids they contain.

     In many states, a “ban” actually means that these products will only be available in licensed cannabis dispensaries where regulators can more easily track their production and sale, ensure that the products pass required contaminant testing, and prevent the products from being sold to minors. Retailers and manufacturers of hemp derived products, especially those wanting to sell nation-wide, must be diligent in tracking state by state restrictions on hemp-derived products.

    Smokable Hemp

    Smokable hemp, although it receives less attention than other forms of hemp products, is a major driver of hemp product sales. Smokable hemp is hemp flowers after they have been manicured and dried. Smokable hemp can be sold as “buds” or in pre-rolled hemp cigarettes. This hemp looks and smells a lot like traditional marijuana but is not psychoactive. While some users may feel a mild mellowing effect, most do not feel “high” after smoking hemp. This may be why smokable hemp is the only hemp product category that has experienced wholesale price increases over time.

    The legal status of smokable hemp, however, also varies from state to state. Smokable hemp is illegal for sale in a handful of states, including Idaho, Iowa, Kentucky and Massachusetts. Other states do not place any restriction on its sales.

    New York has banned hemp flower products that are “clearly labeled or advertised for the purpose of smoking or in the form of a cigarette, cigar or pre-roll.” California does not currently permit the sale of any “inhalable hemp” products, however labeled, having passed a law that prohibits the sale of such products until a tax on the products has been enacted. No such tax is yet in effect.

    ***

    Given the above, it is not safe to assume that your hemp product is legal for sale because hemp is federally legally. It is important for retailers and manufacturers to be aware of the laws that apply to the types of hemp products they are selling. Although the DEA has been hands-off since the passage of the 2018 Farm Bill, FDA oversees all foods, drugs, and dietary supplements in the U.S. and maintains that THC and CBD, even though hemp derived, may not be added to foods and dietary supplements, or marketed as drugs. FDA does not oversee inhalable substances generally, and thus has not released statements related to the legality of smokable hemp. Smokable hemp may be a good market entry point, especially for manufacturers and retailers already familiar with highly-regulated inhalable products.  

    Troutman Pepper’s Cannabis Practice provides advice on issues related to applicable state law. Cannabis remains an illegal controlled substance under federal law. Its attorneys are available to provide more information about these opportunities.

    [1] See https://www.cann-ra.org/news-events/sx2s63c2fudq9n0zmk4ekviku9747f.

  • U.S. FDA Envisions Harm Reduction Approach to CBD

    U.S. FDA Envisions Harm Reduction Approach to CBD

    Credit: Sofia

    The U.S. Food and Drug Administration envisions a harm reduction framework for CBD (cannabidiol, an active ingredient in cannabis that doesn’t make you high) through which consumers could make informed choices.

    That’s the pathway described last week by Patrick Cournoyer, who heads the FDA’s Cannabis Product Committee, at the annual Food and Drug Law Institute (FDLI) conference.

    In January, the FDA announced that it would not issue long-awaited guidelines for the inclusion of CBD in food and beverages, because the agency’s existing regulatory framework was not appropriate.

    The FDA’s decision came nearly five years after the federal government legalized hemp-derived CBD containing less than 0.3 percent of the psychoactive compound Delta-9 THC via the 2018 Farm Act.

    Concerns over the ingestion of CBD derive from the 2018 approval of the prescription drug Epidiolex, which contains CBD for the treatment of seizures associated with two forms of epilepsy.

    Studies at the time showed a significant potential risk of liver disorder and other side effects from ingesting CBD.

    Cournoyer shed more light on the FDA’s January decision by calling safety concerns regarding CBD in food and beverages “important toxicological red flags that are not typical for food ingredients,” as reported by Cannabis Wire.

    “What’s envisioned here is really a harm reduction framework. The existing pathways that we have for foods and supplements don’t really allow for risk or harm. If it’s shown to be harmful or we can’t really show that it won’t be harmful, then it’s not allowed to be there,” Cournoyer said.

    “What we’re proposing here is a more permissive category where it is acknowledged that there’s a risk here. We can’t eliminate it, but we would view that people can make an informed choice.”

    He did not provide a timeline for the development of a harm reduction framework the FDA could develop in collaboration with the U.S. Congress.

    Congressional lawmakers in the U.S. have refiled a pair of bills meant to provide a pathway for the regulation of hemp derivatives like CBD as dietary supplements and food and beverage additives.

    Earlier versions of the bills were filed last Congress and ultimately did not advance, but advocates and industry stakeholders feel that the U.S. Food and Drug Administration’s recent announcement that it wouldn’t be taking steps to regulate CBD will put pressure on lawmakers to act this time around.

  • Sunsoil CEO Sets Sights on Price Cuts for Cannabis

    Sunsoil CEO Sets Sights on Price Cuts for Cannabis

    Credit: Sunsoil

    Sunsoil, the largest CBD and hemp company in Vermont and the fifth largest in the United States, is the only U.S. CBD company to do everything on-site — from farming to production, to manufacturing and distribution.

    The company is also the only FDA-certified organic hemp company to do everything by hand. Sunsoil’s new CEO, Bharat Ayyar, said he believes doing the process this way lends itself to better products and cheaper prices.

    Ayyar has only been CEO for a few weeks, and in his new role, he has continued to prioritize the same intentions that got the company to where it is now, according to MYNBC5.

    “If you’re using it [CBD] every day and buying from other brands, it could cost you over $100 a month, which is wild,” Ayyar said. “A lot of people can’t afford that, and so our goal is really to cut the price of CBD.”

    He continued on to share that the company has taken on a goal to cut down its prices by 80 percent over the next five years. Ayyar said the company is “well on our way to doing that” and has already cut down their prices by 40 percent since January.

    Ayyar also wants to clear up any misconceptions people might have about CBD and raise awareness about the wide range of people it can help. He said it’s something he had already witnessed in his own life, after converting his parents to using Sunsoil’s products.

  • Cannabis Business Expo to be Held With InterTabac

    Cannabis Business Expo to be Held With InterTabac

    The Cannabis Business Expo 2023 (CB Expo) will be held alongside the 2023 InterTabac trade fair in Dortmund, Germany.

    CB Expo 2023 will use the Kongresszentrum, part of the Westfalenhallen expo center complex, on Saturday, Sept. 16, the final day of InterTabac. A reception is scheduled for Friday, reports Charlie Minato of Halfwheel.

    “The main focus of this year’s CB Expo will be on the proposed legalizations of cannabis for recreational use in Germany, the Netherlands, Switzerland, the Czech Republic, Malta and Luxembourg,” said an announcement from Westfalenhallen Unternehmensgruppe GmbH, which owns both InterTabac and the exhibition space. “The event offers an excellent opportunity to learn about and discuss the latest developments and trends in the European cannabis industry.”

    InterTabac is an international trade show for the vaping and tobacco industries. Organizers expect 13,000 attendees for InterTabac and InterSupply—which covers the machinery and equipment side—while 1,000 tickets are available for CB Expo.

    The 2021 and 2022 versions of CB Expo were held in Zurich, Switzerland.

    InterTabac 2023 takes place Sept 14-16 in Dortmund.

  • New Bill Would Reduce Burden on Industrial Hemp Farmers

    New Bill Would Reduce Burden on Industrial Hemp Farmers

    A bipartisan team of U.S. senators presented a bill in the country’s Senate that would reduce the burden on industrial hemp farmers.

    U.S. Senators Jon Tester (D) and Mike Braun (R) introduced bipartisan legislation dubbed the Industrial Hemp Act, that would exempt farmers who exclusively cultivate industrial hemp from the arduous background checks and expensive sampling and testing requirements.

    These protocols would, however, remain, for farmers growing cannabinoid hemp, according to The Dales Report.

    “Montana farmers don’t need government bureaucrats putting unnecessary burdens on their operations,” stated Senator Tester. “It’s time we cut red tape, and make it easier for industrial hemp farmers to get their product to market. My bipartisan bill builds on Montana’s leadership on hemp policy and creates good-paying jobs for folks across rural America.”

    The current U.S. Department of Agriculture (USDA) rules require all hemp crops must be compliant and are subject to a test, while the end-use products made from industrial hemp have always been exempt from the Controlled Substances Act.

    The new legislation would still require industrial hemp farmers to meet compliance standards, but would not require background checks and testing protocols if their crops are in compliance.

    Producers who go against these regulations would be banned from taking part in the hemp program for five years.

  • Former BAT Group Head to Lead Charlotte’s Web Board

    Former BAT Group Head to Lead Charlotte’s Web Board

    Credit: Opolja

    Charlotte’s Web Holdings, a supplier of cannabidiol (CBD) hemp extract wellness products, has appointed Jonathan P. Atwood to the company’s board of directors, according to PR Newswire. Atwood is currently the group head of business communications for BAT and is responsible for BAT’s external, internal and corporate brand communications. Atwood was designated as a board nominee by BAT in connection with its November purchase of convertible debenture in Charlotte’s Web.

    Atwood held senior management positions at Unilever, most recently leading global supply chain communications. Prior to that, he led sustainability and corporate communications for Unilever North America. Atwood is an advocate of sustainability and has worked closely with B Corps companies.

    Charlotte’s Web is the only publicly traded CBD B Corp-certified company.

    “We welcome Jonathan as a valuable addition to the board where he can support our international and sustainability ambitions. We look forward to working closely together on our mutually shared interests,” said John Held, chairman of the board of Charlotte’s Web.

    Atwood’s appointment brings the total number of directors on the Charlotte’s Web board to six.

    Last year, Charlotte’s Web Holdings Inc. became the first company to score a CBD sponsorship with Major League Baseball.