Food Industry High on Edibles

Over the last 25 years, cannabis laws and attitudes throughout the U.S. have undergone a remarkable transformation. As recently as 1995, cannabis was illegal in every U.S. jurisdiction, and its use was still widely taboo. The transformation began in 1996, when California voters passed Proposition 215, making California the first U.S. state to enact medicinal marijuana legislation. Since then, 32 additional states, the District of Columbia, Guam, and Puerto Rico have enacted medical marijuana/cannabis programs. More than a dozen other states permit use of cannabis derivatives, most notably cannabidiol (CBD), and numerous states have legalized recreational marijuana.

As legalization initiatives have swept across the nation, the legal cannabis industry has enjoyed explosive and nearly unprecedented growth despite the challenges stakeholders continue to face. Those challenges include conflicting state and federal laws, lack of regulation, burdensome tax schemes, and transportation hurdles.

Despite (or perhaps because of) the rapid legal and cultural shift, confusion regarding cannabis abounds. For purposes of this article, the term “cannabis” refers to both marijuana and hemp. Both are members of the family Cannabis sativa and share many properties, but there are meaningful distinctions between the two. Whereas marijuana typically produces significant levels of tetrahydrocannabinol (THC)—the psychoactive compound that produces a “high” when ingested—hemp does not. Hemp produces only a trivial amount of THC, generally less than 0.3 percent, which is insufficient to cause impairment.

Hemp has long been an important agricultural commodity. Archaeological evidence of hemp cultivation dates back 10,000 years to ancient Mesopotamia. More recently, George Washington cultivated hemp at his Mount Vernon estate. Hemp has many industrial applications. It is used to manufacture textiles, biofuels, paint, varnish, soap, lotions, rope, lubricating oil, and many other products. Unbeknownst to many, hemp was widely cultivated in the U.S. until the 1960s. Thereafter, it was swept up in the “War on Drugs” and, pursuant to the Controlled Substances Act, was prohibited under federal law.

With the enactment of the 2018 Farm Bill, hemp prohibition has effectively ended, though it will continue to be stringently regulated. The Farm Bill defines hemp as an agricultural commodity and removes its status as an illegal drug, provided the THC levels are below 0.3 percent. Hemp may now be introduced into interstate commerce, provided it is otherwise compliant with the law. Likewise, many of the onerous restrictions on the sale, transport, or possession of hemp-derived products have been eliminated.

Hemp will now be regulated pursuant to a cooperative framework under which state and federal authorities will work together to oversee hemp cultivation and production. The Bill directs departments of agriculture to consult with executive and law enforcement officials to devise and submit plans to the head of USDA. These plans will establish quality control standards for hemp production. Each state’s plan must be approved by USDA prior to the state commencing licensure and regulation. To the extent a state opts out, USDA will implement its own regulatory regime pursuant to which cultivators may seek licenses and will be subject to oversight.

FDA Regulation and Classification

Today, hemp is most well-known for CBD, a promising compound widely credited with offering therapeutic benefit for a variety of ailments, including stress, pain, and seizure disorders, among others. Though CBD is now legal under federal law when derived from hemp—as opposed to marijuana—hemp-derived CBD remains subject to FDA rules when used as an additive to foods, beverages, or supplements. Put differently, CBD as a compound is no longer illegal. However, CBD is still considered a drug ingredient, meaning it requires FDA food additive approval. FDA will treat CBD as it does any other FDA-regulated product—meaning it’s subject to the same authorities and requirements as FDA-regulated products containing other drug ingredients.