Editor’s note: This article is the first in a series of “ATW legal takeaways” columns by attorneys with Amin Talati Wasserman LLP.

After years of keeping the industry in suspense, on Jan. 26, FDA announced its conclusion that CBD can’t be regulated under existing frameworks for dietary supplements and foods. FDA intends to work with Congress on a cross-agency regulatory strategy for these products—one that balances consumer access with the need to manage the risks associated with CBD products.

As part of this announcement, FDA also denied citizen petitions filed by the Consumer Healthcare Products Association (CHPA), the Council for Responsible Nutrition (CRN) and the Natural Products Association (NPA), requesting the agency conduct rulemaking to allow the marketing of CBD products as dietary supplements.

How CBD got here

In December 2018, immediately after the 2018 Farm Bill was signed into law, FDA confirmed its position that CBD (and THC) cannot be sold as a dietary supplement or food because substantial clinical investigations on CBD were authorized prior to its marketing as a supplement or food. At the same time, FDA also stated it was committed to pursuing a framework for the lawful marketing of CBD products.

Numerous warning letters and similar public statements were issued in the years that followed, with FDA also opening a docket to collect data on the safety of CBD and engaging in its own review of the literature and studies on CBD.

Fast forward to January 2023 and FDA’s determination that based on its review, “it is not apparent how CBD products could meet safety standards for dietary supplements or food additives.” Specifically, the agency raised concerns about long-term use of CBD, interactions with certain medications, possible harm to the male reproductive system and CBD exposure in vulnerable populations like children and the elderly.

According to FDA, its existing authorities provide “limited tools” for managing these risks—even though dietary supplements in particular are subject to a wide range of mandates focused on safety throughout the supply chain. As for enforcement, FDA stated it will continue to monitor the marketplace and take action when appropriate, which seems to signal a major shift in strategy may not happen.

The agency’s announcement follows several years of statements on CBD, and although disappointing, it came as no surprise to those of us following this issue closely.

So why did FDA take this position, what happens next and when will it happen? Currently, there are more questions than answers, but FDA’s statements—both current and past—give some indication as to what was behind this latest announcement and what might be in store in the coming months.

Why we got here with CBD

First, what is clear is this latest announcement isn’t just about CBD, but about FDA’s frustrations with the 2018 Farm Bill. Although the Farm Bill removed hemp from the Controlled Substances Act (CSA), it did not provide a regulatory framework under which FDA can regulate hemp products.

In other words, Congress preserved the agency’s authority to regulate such products but did not mandate FDA develop regulations under any of the existing frameworks that apply to foods, dietary supplements, cosmetics or drugs. What followed was a market flooded with hemp products, with a regulator that was not prepared to handle this influx of goods.

Second, as the Reagan-Udall Foundation report highlighted, FDA—especially CFSAN (Center for Food Safety and Applied Nutrition), which is responsible for regulating foods, supplements and cosmetics—has a “culture of indecisiveness and inaction and created disincentives for collaboration.”

For CBD, it seems FDA did not see any upside in taking a decisive action, either through enforcement or by allowing its use in dietary supplements or food. Even regular congressional nudges or threats did not result in any action, except the often-repeated line about the lack of safety data, followed by public statements stating the same.

Third, FDA had on its side the drug exclusion argument, which the industry could not challenge in court. FDA has issued many warning letters, but those are not considered final agency actions, which are required before a court would have the authority to review an FDA decision.

It is important to note that, even if FDA’s position with respect to the drug exclusion is correct (we disagree with FDA on this point), Congress provided FDA the discretion to issue regulations to allow the excluded ingredient to be used in a dietary supplement. Unfortunately, FDA is not willing to use that discretion, since according to the agency’s latest statement, “it is not apparent how CBD products could meet safety standards for dietary supplements or food additives.”

In our opinion, FDA is not willing to use its existing authority because it believes doing so will create a precedent that will hinder its ability to regulate the dietary supplement industry. For example, FDA has consistently pointed to its “limited tools” with respect to this category (also called out in the latest announcement), and in the response to the citizen petitions.

We’ll continue to see a push for more funding for FDA, as well as expanded authority through mandatory product listing (MPL) and the creation of a new “prohibited act” for products that don’t meet the definition of “dietary supplement” in the law. However, it seems FDA will still maintain its resources would be overwhelmed if CBD is allowed in dietary supplements.

In the petitions, FDA even outlines in detail why the new dietary ingredient notification (NDIN) process isn’t sufficient to protect the public from potentially unsafe supplements, and how CBD would strain its resources to the detriment of public health. This begs the question: Is this latest decision on CBD a negotiating tactic by FDA for increased authority, perhaps beyond MPL?

Industry next steps

The central theme in FDA’s decision is safety. However, industry has in its possession a vast amount of safety data that FDA has not reviewed. It will be prudent for the companies and individuals in possession of this data to combine their efforts.

We also recommend the industry retain toxicologists and other food safety experts to carefully comb through all the safety data and create an industry white paper that can be shared with all the stakeholders.

In its response to CRN’s citizen petition, FDA argued there are safety studies that should have been taken into consideration, as those studies could paint a different picture of CBD. For example, FDA proclaimed, “Indeed, there is ample evidence that CBD has been shown to have more sensitive deleterious effects … as well as in multiple organ systems, including the liver.”

However, those studies used 1,400 milligram (mg) or 1,500 mg dosages of CBD, significantly higher doses than what is typically being marketed in dietary supplements.

Now that FDA has essentially punted to Congress, it will be interesting to see whether federal legislation that maintains the current dietary supplements framework will advance, similar to H.R. 841, the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021.

It’s also possible Congress answers FDA’s call to create a new category with the risk management tools suggested by FDA in its announcement, “clear labels, prevention of contaminants, CBD content limits and minimum purchase age for CBD products.” Staying abreast of these developments and ensuring industry’s voice is heard will be crucial over the next several months.

FDA’s announcement is also likely to impact other hemp-derived cannabinoids, some of which may have a less robust safety profile compared to CBD. In fact, what we may see is a move by FDA to create a new regulatory category of “cannabis products” that includes CBD.

This new regulatory classification may include a “dietary supplement plus” category, most likely requiring preapproval in addition to the previously mentioned risk management tools. Of course, this may actually be the silver lining in FDA’s announcement—namely that there is a pathway forward for CBD and possibly other cannabinoids.

On the topic of other cannabinoids, FDA actions on delta-8 THC are also telling. When FDA first announced the issuance of warning letters to companies marketing delta-8 THC products, the headline called out CBD, and several of the letters cited CBD products in addition to delta-8 THC products.

The intertwining of CBD and delta-8 THC was also noticeable in a recent interview with Norman Birenbaum, FDA’s senior public health advisor on cannabis issues. In response to a question about what prompted FDA’s recent CBD announcement, the conversation pivoted to hemp-derived intoxicants and synthetics, and what is the “proper regulatory structure for CBD and hemp-derived products in general.” That was followed by a reference to “a whole host of adverse events” associated with intoxicating products, including infants consuming delta-8 THC gummies.

It’s highly questionable whether it’s fair to lump CBD in with intoxicating products like delta-8 THC, but it seems FDA is already doing this.

Last but certainly not least, how the states will react to FDA’s announcement is another important area to watch, especially given the existing challenges of keeping up with the always-changing patchwork of state requirements for hemp and CBD products.

Following passage of the 2018 Farm Bill, almost half of the states now have adopted a regulatory framework that allows the sale of dietary supplements and food containing CBD or other cannabinoids. These frameworks are subject to certain requirements, usually focused on testing, labeling and registration.

It’s unclear whether states will adjust their approach in response to FDA’s decision on CBD. Nonetheless, this is an area to watch closely moving forward because state-based legislative and regulatory changes can occur quickly, sometimes with little notice or “grace period” for implementation.

ATW takeaways

Although FDA’s announcement is significant, a major shift in enforcement doesn’t seem likely. Now is the time to carefully review the safety of hemp-derived products, not just CBD, ensure labeling is appropriate and products are being manufactured in accordance with cGMPs (current good manufacturing practices).

Also keep an eye on Congress’s next move, watch for legislation that impacts dietary supplements as an entire category—not only CBD—and be prepared to work with U.S. lawmakers. Finally, watch for changes at the state level, which are often swift and impactful.

Rend Al-Mondhiry is a partner with Amin Talati Wasserman LLP. She advises the dietary supplement, food, cosmetic and over-the-counter medicine industries on a broad range of regulatory and compliance matters, with a focus on helping companies navigate the rapidly evolving regulatory landscape for hemp and CBD products at both the federal and state level.

Ashish Talati is a partner with Amin Talati Wasserman LLP. He primarily counsels clients on matters of regulatory compliance, helping them anticipate and address regulatory issues in their day-to-day business operations and strategic planning. He is considered a leading authority in the areas of generally recognized as safe (GRAS) requirements and new dietary ingredients.