By Tonya M. Esposito and Renee B. Appel

Seyfarth Synopsis: Businesses should take note of recent developments in the CBD space. Consumer protection regulatory agencies issued another joint warning to a company selling CBD products making allegedly unsubstantiated claims. And, the FDA continues to stick to its public position that it is working toward both understanding the impact of CBD on users and crafting an effective regulatory framework. Despite this activity, Congressional leaders are still nipping at the heels of the FDA. Senator Chuck Schumer called on the FDA to issue and implement its CBD regulatory framework as soon as possible, and to report back to his office on its progress to date. In the interim, businesses will be left wondering what the rules of the road are.

Joint Warning Letter

Issued on October 10, 2019, the FDA and FTC partnered together to issue a joint warning to Rooted Apothecary LLC (“RA”), of Naples, Florida, for illegally selling unapproved CBD products that claim to solve a variety of health issues. RA has been accused of, among other things, claiming on its website that its products treat pain in infants, autism, attention-deficit/hyperactivity disorder (ADHD), as well as Parkinson’s and Alzheimer’s disease.

In their joint letter, both regulatory agencies made clear that RA’s purportedly fraudulent acts are illegal under statute. The FTC warned that such acts are illegal under the Federal Trade Commission Act, which makes it illegal to advertise products that can deceive consumers. Moreover, the FTC cautioned that any claims of treatment of diseases in humans must be backed by “competent and reliable scientific evidence.” Meanwhile, the FDA noted that under the Food, Drug, & Cosmetic Act, RA has 15 days to respond to both the FDA and FTC on how it will correct these violations.

In its joint letter, the FDA made clear that it was “working quickly to further clarify our regulatory approach for products containing cannabis and … CBD.” To that end, it has called on the public to report adverse reactions to CBD products to the agency’s MedWatch program. The FDA stated that in evaluating potential regulatory solutions, it holds public health as its prime goal, one that is achieved through “science-based decision-making.” Dr. Amy Abernethy, Principal FDA Deputy Commissioner, previously stated that the FDA would report on its inquiry into the science behind CBD in late summer/early fall of 2019. No report has been issued yet.

Schumer’s Call to Action

Senator Chuck Schumer’s call to action for the FDA stems from the passage of the 2018 Farm Bill. In his public statements last month, Senator Schumer explained that the CBD space, which is already sizeable in New York, is poised to grow into a billion-dollar industry. In light of this, Senator Schumer notes that businesses within his state are eager to join the CBD craze, but cannot act without rules of the road. He indicated that it is “imperative” that regulations be issued and implemented as soon as possible, and that the FDA’s efforts thus far have been “woefully” inadequate. Senator Schumer requested that within 90 days of his letter to Acting FDA Commissioner, Norman Sharpless, the FDA is to provide Senator Schumer’s office an outline of “agency’s current plans for a specific regulatory framework related to CBD along with a timeline for when comprehensive enforcement policies for CBD products will be finalized and implemented.”

Repeated calls to action from various parties (ranging from former FDA Commissioner Scott Gottlieb, to members of the public at large, and now Congressional leadership) have urged the FDA to provide guidance in the CBD space. As Senator Schumer recognized, CBD has the potential to become a billion dollar industry in New York state alone. The importance of this appears not lost on the FDA, but it reiterates the need for adequate scientific data in order to move forward. In the interim, the public and business continue to wait for regulatory clarity and are left trying to navigate muddy waters.

Seyfarth’s Cannabis practice has a deep bench of experienced attorneys who actively counsel clients in this space. Seyfarth will continue to monitor developments and report them as they become available.