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Is CBD Legal? It's Complicated

Client Alert

Authors: Jay A. Dubow and Abel Garza

1/18/2019
Is CBD Legal? It's Complicated

Perform an online search for “is CBD legal?” and you will get a variety of different results. It is a challenging question because CBD can refer to cannabinoids from different sources, and it is often interchanged with other terminology, such as “hemp oil.” In addition, regulation and enforcement of cannabis is constantly changing, both at the federal and state level.

The Cannabis Sativa Species

“Cannabis plant” is the terminology used to reference plants in the cannabis sativa species. The cannabis sativa species contains both hemp plants and marijuana plants, which comprise a multitude of cannabinoids. Hemp plants are those that contain a maximum of 0.3 percent tetrahydrocannabinol (THC), which is the psychoactive component of the cannabis plant that creates the “high” typically associated with cannabis use. Marijuana plants are those plants that contain greater than 0.3 percent THC.

What Is CBD?

CBD refers to cannabidiol, which is one of many cannabinoid components of cannabis plants. CBD does not contain the psychoactive properties of THC, so CBD users do not experience a “high.” CBD is extracted from the buds, flowers, leaves and stalks of cannabis sativa plants (i.e., marijuana or hemp plants).

While there is only one FDA-approved CBD drug — Epidiolex®, a drug indicated for the treatment of seizures associated with Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age or older — users of CBD oil are often seeking relief from anxiety, insomnia, chronic pain and other ailments.

Federal Legislation

In December 2018, Congress passed a new bipartisan-supported Farm Bill, which the president signed into law and which loosens the restrictions on hemp cultivation in the United States. Under the new Farm Bill, farmers will be able to cultivate hemp and transfer hemp-derived products for commercial purposes, as long as the hemp cultivation meets the requirements set forth under the new legislation. For example, farmers will be required to meet the definition of hemp as stated in the bill — hemp must not contain more than 0.3 percent THC — and acquire the appropriate licenses/permits to cultivate the product. Hemp cultivated appropriately under the conditions of the new Farm Bill will be excluded from the Controlled Substances Act (CSA), such that extraction of CBD and sales of products containing CBD from such hemp will be legal. Also pending before Congress is the bipartisan-sponsored STATES Act, which was introduced in June 2018. This act would give autonomy to the states by legalizing marijuana/CBD use in each state, to the extent that any state legislation has legalized such use. This act appears to have strong bipartisan support.

Federal Perspective

Outside of the conditions set forth under the new 2018 Farm Bill, CBD is still a Schedule I Drug under the CSA. And the government has taken steps to cement the status of CBD on the federal level.

In the Federal Register of December 14, 2016, concerning the establishment of a New Drug Code for Marijuana Extracts, the Drug Enforcement Administration (DEA) announced that it had created a new Administration Controlled Substances Code Number for “marihuana extracts.” In a comment in the Federal Register, the DEA specifically addressed CBD, noting that, “[i]f it were possible to produce from the cannabis plant an extract that contained only CBD and no other cannabinoids, such an extract would fall within the new drug code 7350.” In its Clarification of the New Drug Code (7350) for Marijuana Extract, the DEA explained, “The new drug code is a subset of what has always been included in the CSA definition of marijuana.” Therefore, because CBD would fall under the new subset, it would still fall under the CSA definition.

Moreover, on January 4, 2018, then-Attorney General Jeff Sessions rescinded the Cole Memo, which stated that the federal government would not enforce marijuana prohibition in states that have legalized marijuana. This does not necessarily mean that there is a strong appetite for marijuana/hemp enforcement; however, it does indicate that the threat is more viable than before. It is important to note that the 2018 Farm Bill does not legalize state-approved cannabis laws. State-legalized marijuana and non-Farm Bill conformed hemp is still illegal under federal law.

What About Hemp Oil?

Hemp oil is another cannabis sativa extract. As with CBD, it does not contain the psychoactive properties of THC. However, unlike CBD — which is extracted from the buds, flowers, leaves and stalks of cannabis sativa plants — hemp oil is only extracted from the seeds of the hemp plant, which is excluded from the marijuana definition under the CSA.

The CSA definition does specify which parts of the cannabis plant are regulated by the rule and which are not. For example, the definition of marijuana excludes “oil or cake made from the seed of such plant.” The DEA reiterates this position in its Clarification of the New Drug Code (7350) for Marijuana Extract, stating, “Thus, based on the scientific literature, it is not practical to produce extracts that contain more than trace amounts of cannabinoids using only the parts of the cannabis plant that are excluded from the CSA definition of marijuana, such as oil from the seeds.”

Therefore, oil from cannabis sativa seeds, which includes hemp, would not fall under the definition of marijuana in the CSA. The DEA has also stated that even oil from cannabis seeds that “contain trace amounts of cannabinoids” would not fall under either the drug code for marijuana or for marijuana extract.

Present Picture

Regardless of the enforcement status of cannabis, the FDA has issued warning letters to companies selling CBD products that are making claims regarding the healing properties of CBD (e.g., claiming that it has anti-cancer properties). Therefore, companies need to avoid any unsupported medical claims, such as stating that a facial cream that contains CBD treats or cures eczema. 

When considering marketing and/or selling a product containing CBD, certain verifications should be made with the product manufacturer:

  1. Confirm the product’s ingredients: Because the ingredient terminology is inconsistently used between manufacturers, confirm what is contained in the product. Understanding whether the product contains any CBD, or merely contains hemp seed oil, will assist in risk assessments.

  2. Confirm the origin of the CBD: Once you have determined whether the product contains CBD, query the source, i.e., whether it was derived from hemp grown in accordance with state-legal hemp cultivation and/or the 2018 Farm Bill. If the CBD is sourced from a plant that was grown appropriately, the risk of the product being tainted is reduced. Remember, not all CBD is legal under the new Farm Bill.

  3. Confirm that no inappropriate claims are made: As discussed above, the FDA has taken an interest in companies that are selling products containing CBD that make unsupported claims of medical benefits.

The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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