BEMA Convention 2019 - BakingWith Cannabis and CBD

Baking with Cannabis and CBD presentation provided by William Bogot, Esq. of Rothschild LLP at BEMA Convnetion 2019

Transcript

1. Baking with Cannabis & CBD
2. © 2019 Fox Rothschild BAKING WITH CANNABIS AND CBD William Bogot, Esq. Partner, Fox Rothschild LLP
3. The Controlled Substance Act (CSA) • The CSA establishes a comprehensive federal scheme to regulate controlled substances. • The CSA makes it unlawful to “manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense any controlled substance . . . .” • Restrictions on the manufacture, distribution, and possession of a controlled substance depend on the “schedule” in which Congress has placed the drug.
4. The CSA and “Marijuana” • From its inception, the CSA classified both “marijuana” and THC as Schedule I controlled substances. • Definition of “marijuana” (pre-2018 Farm Bill): – “[A]ll parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” • Excludes: “the mature stalk of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.”
5. Hemp v. Marijuana Cannabis Sativa L. (Plant) Hemp Marijuana Cannabinoids Cannabinoids THC < 0.3% CBD THC > 0.3% CBD
6. Cannabidiol (CBD) Generally • Unlike THC, which gives users the “high” feeling, CBD is non-psychoactive. • Although the data is mixed, CBD may have potential clinical effects on anxiety disorders, movement disorders, cognition and pain. • CBD can be ingested/applied in multiple different ways, including: – Tinctures (essentially droplets of CBD-infused alcohol placed under tongue) – Capsules – Oil – Inhalation of smoke or vapor – Infused food/drink – Cream • At least one report suggests that the hemp-CBD market alone is poised to hit $22 billion by 2022.
7. 2014 Farm Bill • 2014 Farm Bill – Notwithstanding the Controlled Substances Act . . . or any other federal law,an institution of higher education (as defined in section 1001 of title 20) or a state department of agriculture may grow or cultivate industrial hemp if— • (1) the industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research . . . • The 2014 Farm Bill defines “agricultural pilot program” as “a pilot program to study the growth, cultivation, or marketing of industrial hemp . . .” • The 2014 Farm Bill defines “industrial hemp” as the “plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” – DEA enacted regulations that seemed contrary, then tried to walk it back
8. 2018 Farm Bill • 2018 Farm Bill 1. Removed “hemp” from CSA definition of “marijuana” • Defines “hemp” as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, whether growing or not, with a [THC] concentration of not more than 0.3 percent on a dry weight basis.” 2. Gave primary regulatory authority to states • If a state does not regulate, then federal regulations govern 3. Forbids states from interfering with interstate shipment of hemp 4. Does not affect the Food, Drug, and Cosmetic Act, among other things, as well as the authority of the FDA to promulgate regulations and guidelines under the FD&C Act
9. 2018 Farm Bill: Interstate Transportation • (a) RULE OF CONSTRUCTION – Nothing in this title or an amendment made by this title prohibits the interstate commerce of hemp (as defined in section 297A of the Agricultural Marketing Act of 1946) or hemp products • (b) TRANSPORTATION OF HEMP AND HEMP PRODUCTS - No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 through the State or the territory of the Indian Tribe, as applicable
10. 2018 Farm Bill: Interstate Transportation (cont.) • What constitutes hemp or hemp products produced in accordance with subtitle G under 2018 Farm Bill? – Hemp grown with a valid USDA issued license • Waiting for USDA regulations to be issued in the fall and licenses provided – Hemp grown under a USDA-approved State or tribal plan • Waiting for USDA regulations to be issued in the fall and state plans to be approved – Hemp grown under the 2014 Farm Bill • This provisions expires one year after the USDA issues its 2018 Farm Bill regulations – Big Sky Scientific v. Idaho State Police, et al. • Lower Court relied on 2018 Farm Bill and lack of federal regulatory plan to prohibit trucking of hemp through Idaho • Appeal reasserts 2014 Farm Bill – Question as to whether 2014 Farm Bill allows commercial activity
11. 2018 Farm Bill: Interstate Transportati on (cont.) • State laws enacted post-2018 Farm Bill generally allow hemp products produced in their states to be sold commercially both within and outside their states (e.g., Illinois Industrial Hemp Act and regulations, 8 Ill. Admin. Code 1200.90(c)). • June 13, 2019 U.S. Postal Service Notice allowing the shipment of hemp derived CBD oil and CBD other products through the U.S. mail.
12. FDA Implications for Interstate Commerce • Federal Food, Drug, and Cosmetic Act (FD&C Act) – 2018 Farm Bill preserved the FDA’s current authority to regulate products containing hemp-CBD under the FD&C Act. – FDA issued a statement on hemp-CBD products that reiterated treatment of CBD as a “drug” and not a “dietary supplement” under the FD&C Act, but suggested that this may change in the near future. • Epidiolex • Sale of a “drug,” including food containing the “drug,” requires FDAregulatory approval
13. FDA Implications for Interstate Commerce (cont’d) • Federal Food, Drug, and Cosmetic Act (FD&CAct) – The FDA statement recognized “growing public interest in [CBD],” as well as “the potential opportunities that cannabis or cannabis-derived compounds could offer...” – The FDA statement committed to making the pathways for marketing CBD products more efficient. – FDA’s April Q & A distinguishes and applies differing interstate commerce standards for hemp-based food products, hemp-based CBD food products, dietary supplements and cosmetics. (https://www.fda.gov/news-events/public- health-focus/fda-regulation-cannabis-and-cannabis-derived-products- questions-and-answers)
14. FDA Implications for Interstate Commerce (cont’d) • FDA Enforcement – FDA enforcement priorities appear to be focused on vendors that are making serious health claims about their CBD products. • For example, “CBDs are effective against MRSA” – In those cases, the FDA issued warning letters. – FDA warning letters typically allow for post-warning compliance without penalty or fine. • FDA’s May 31 meeting
15. © 2019 Fox Rothschild William Bogot, Esq. 312-517-9205 wbogot@foxrothschild.com FOX ROTHSCHILD, LLP California | Colorado | Connecticut | Delaware | DC | Florida | Georgia | Illinois | Minnesota | Nevada | New Jersey | New York | North Carolina | Pennsylvania | South Carolina | Texas | Washington