The Precarious Legal Status of CBD

How do federal laws define marijuana?
How do federal laws define marijuana?

The cannabis plant is made up of dozens of compounds called cannabinoids. The plant’s two most prominent cannabinoids are tetrahydrocannabinol (THC) and cannabidiol (CBD). Each compound has different effects on the human body. THC has the renowned psychoactive effect on users for which marijuana is well known, but it can also increase one’s appetite, reduce nausea, and act as an anti-inflammatory. CBD on the other hand has a very mild or no psychoactive effect. CBD has been sought after for its ability to prevent convulsions, making it effective for treating seizures. Studies have also shown that CBD may help treat brain injuries. As CBD gains recognition as truly effective medicine, its market potential is growing rapidly. As of late, many of you have probably seen those companies, companies not even located in states with medical marijuana laws, claiming to be able to sell medical-grade CBD anywhere in the U.S. via the internet.

Given the foregoing, is CBD legal under federal law? It depends.

Marijuana is currently listed as a Schedule I narcotic under the federal Controlled Substances Act, meaning the federal government believes it to be a dangerous drug with no recognized medical benefit. Consequently, any CBD derived from marijuana violates the federal Controlled Substances Act, and the Drug Enforcement Administration (DEA) has already stated that it believes that CBD is a marijuana derivative and, therefore, a Schedule 1 drug. However, the federal Controlled Substances Act does not include in its definition of “marijuana” the plant’s “mature stalks.” These mature stalks are used to create hemp (which contains little to no THC and has not intoxicating effect). Hemp is not scheduled under the federal Controlled Substances Act and, therefore, is also not under the enforcement authority of the DEA.

Though the DEA has no enforcement power over hemp products, it does control hemp cultivation. In order to grow hemp in the U.S., you have to have a permit from the DEA which the DEA typically never issues. Therefore, cultivating hemp without a permit to do so from the DEA remains a federal crime. The only exception is the 2014 federal Farm Bill which allows state departments of agriculture, universities, and colleges to cultivate hemp without a permit from the DEA for educational and research purposes. Because of the prohibition on hemp cultivation without a DEA permit, the hemp products we see in the U.S. typically come from hemp imported from overseas. This means that companies and individuals may freely sell CBD derived from processed hemp (not from marijuana), imported from outside the U.S.

Additionally, the Food and Drug Administration (FDA) has inserted itself into the CBD market. Generally, when a company makes a medical claim about a product, that product is classified as a drug. Under the Federal Food, Drug and Cosmetic Act (FDCA), new drugs are not allowed to enter the market without first being tested by the FDA, unless they meet the definition of a dietary supplement (which doesn’t require such testing). When these types of claims are made without the requisite testing, the FDA takes action under the FDCA.

The FDA does not consider CBD to be a dietary supplement; it considers CBD to be a new drug. As a result, earlier this year, the FDA issued warning letters to companies making medical claims about their CBD products. Ultimately, among other identified violations of the FDCA, the FDA accused these companies of making unfounded medical and therapeutic claims about their CBD products by, for instance, stating that CBD is effective for treating certain kinds of cancer. The FDA gave these companies 15 days to demonstrate how they were curing violations of the FDCA or face legal action by the FDA.

Anyone undertaking the sale of hemp-derived CBD should make very clear to regulators and to its customers that its products come from imported hemp and not from marijuana. Moreover, anyone selling or making hemp-derived CBD should take great care to avoid making any medical claims about those products or else they risk facing the consequences under the FDCA.