Secretary Perdue made the announcement in a YouTube video titled “USDA’s Hemp Policy.” Later in the week, an interim final rule formalizing the program will be published in the Federal Register, according to the USDA’s website. “The rule includes provisions for the U.S. Department of Agriculture (USDA) to approve hemp production plans developed by states and Indian tribes including: requirements for maintaining information on the land where hemp is produced; testing the levels of delta-9 tetrahydrocannabinol; disposing of plants not meeting necessary requirements; and licensing requirements,” reads the press release. “It also establishes a federal plan for hemp producers in states or territories of Indian tribes that do not have their own approved hemp production plan.” The interim final rule will go into effect as soon as it is published in the Federal Register, which should be by the end of this week.
You can watch the YouTube video and read the announcement he made below:
Hello everyone, as I travel across this great country of ours, I hear a lot about a strong interest in a new economic opportunity for America’s farmers: the production of hemp. Which is why today I am pleased to announce the USDA has published the rule establishing the US domestic hemp production program. We said we’d get it done in time for producers to make planning decisions for 2020 and we followed through. We have had teams operating with all hands-on-deck to develop a regulatory framework that meets Congressional intent while seeking to provide a fair, consistent and science-based process for states, tribes, and individual producers who want to participate in this program. As mandated by Congress, our program requires all hemp growers to be licensed and includes testing protocols to ensure that hemp grown under this program is hemp and nothing else. The USDA has also worked to provide licensed growers access to loans and risk management products available for other crops. As the interim final rule, the rule becomes effective immediately upon publication in the federal register. But we still want to hear from you. Help us make sure the regulations meet your needs. That’s why the publication of the interim final rule also includes a public comment period continuing a full and transparent rulemaking process that started with a hemp listening session all the way back in March 2019. At USDA, we are always excited when there are new economic opportunities for our farmers and we hope the ability to grow hemp will pave the way for new products and markets. And I encourage all producers to take the time to fully educate themselves on the processes, requirements and risk that come with any market or product before entering this new frontier. The Agricultural Marketing Service will be providing additional information, resources and educational opportunities on the new program. And I encourage you to visit the USDA hemp website for more information. As always, we thank you for your patience and input during this process.
Someone approached me the other day, wanting to know what was the real story about hemp and CBD.
He said he had “a guy” who gave him a CBD salve as part of a study, supposedly “the good stuff,” to help his knee. He couldn’t understand why he was the only one out of 20 people in the group that felt no relief. He happened to have this CBD salve with him, along with a second brand that he hadn’t yet tried. The “good stuff” had slick, colorful packaging, a beautiful logo and powerful marketing messages about the phytocannabinoids and essential oils in the jar. The other CBD product was in a dull grey tin, an ugly duckling, and not nearly so impressive on the outside- I’ll call it “Homer’s Brew.” My friend dismissed Homer’s Brew outright, as not even worth trying. I told him that not all CBD products are created equal, that you can’t always believe the claims on the package, including the cannabinoid potency displayed on the label.
I told him to search for the Certificate of Analysis (COA) for each of the two products, specifically, lab test results validating the CBD dosage per serving, and also the breakdown of pesticides, heavy metals and microbials. He had to do a little digging and emailing, as it wasn’t readily available for either company, but the next day, results were in. The “good stuff” with the slick packaging and bold claims had mere trace amounts of CBD, with some hemp and essential oils- no tests for pesticides or contaminants of any kind. Hmmm, no wonder he was disappointed. Homer’s Brew’s COA came in with flying colors – a reputable lab had confirmed safe levels of pesticides, pathogens and heavy metals, and the CBD level was substantial, with a detailed cannabinoid breakdown in the lab report.
In spite of the varying legality of hemp-derived CBD products from one state to the next, consumers are gobbling up costly CBD salves, tinctures and edibles in markets, gyms and online. Like moths to a flame, they are pulled in by the CBD name and lofty promises, not always understanding what they are getting for their money. They trust that these products are safe, licensed, inspected and regulated by some agency, otherwise, “they wouldn’t be on the shelves, would they?”
In spite of the 2018 Farm Bill, FDA still has not recognized the legality of products containing hemp-derived CBD, but some states have gone ahead and given them a green light anyway- check with your own jurisdiction to be sure. In the meantime, hemp-derived CBD products are slipping through the regulatory cracks, depending on the state. It is confusing, for sure, and buyer beware.
Separate yourself from the pack of snake-oil salesmen. Test your products for safety and accurate cannabinoid potency, and make a Certificate of Analysis readily available to your customers. Boldly portray your transparency and belief in the quality of your products through this COA.
Providing this information to consumers is the best path to success- safe, satisfied customers who will refer to their friends and family, and most likely come back for more of your “good stuff.”
The Agriculture Improvement Act of 2018 legalized the growth, sales and transportation of industrial hemp across state lines. Although it looks identical to other types of cannabis, this cannabis plant contains less than 0.3 percent THC, and can be used to make building insulation, beauty products, car dashboards and more. Most significantly for farmers, it can serve as an ideal rotational crop because of its ability to reduce soil toxicity.
Until this update to the Farm Bill, hemp was considered a controlled substance and few U.S. farmers were granted rights to plant and harvest it. Now, the agricultural commodity is expected to raise the crop’s already growing GDP to that of liquor and beer sales and some estimate it should reach $20 billion in as little as five years.
Agribusinessesand farmers alike will now be looking to secure processors and other commodity buyers ahead of planting industrial hemp and purchasing the necessary equipment for its harvest. Because hemp can be grown in any climate, it may be especially attractive to tobacco growers and dairy farmers who have been less profitable as of late.
Now that it’s been legalized, what’s the risk?
As more agribusinesses and farmers look to confirm viability of industrial hemp growth, potential liabilities will surface. The 2018 Farm Bill left many questions unanswered. Here are a just a few FAQs:
Question: Can I just add hemp to my crop rotation, or is additional insurance required?
Answer: The standard multi-peril crop insurance policy DOES NOT provide coverage for planting hemp, or endorsements for its storage and transportation- yet. Instead, industrial hemp must be insured on separate private policies for: harvest, extreme weather and crop storage and transportation. There’s a strong push to get industrial hemp into the federal crop insurance program as early as crop year 2020. As hemp planting, harvesting, storage and transportation become more understood and predictable, new policy options will likely become available. Inquire about new coverage options at your next annual renewal.
Q: How will the FDA regulate industrialized hemp?
A: The FDA will develop rules and regulations on industrial hemp throughout 2019, and will be ready for rollout during the 2020 crop year. Because it’s impossible to distinguish a cannabis plant with THC from an industrial hemp plant in the field, crop lifecycle testing and documentation will likely be required. The question remains if this testing and documentation will be incumbent on the farm/agribusiness, or FDA agents. Some states are further along in this process and have already hired testing and compliance officers.
Q: How can farmers ensure that the THC content of their plants does not exceed .3%?
A: Farmers must have a contingency plan for monitoring their hemp’s THC content which should include employing a seasoned agronomist who can institute controls, keep plants properly hydrated and create a plan to maintain optimal THC levels. In the heat of the summer, THC levels typically remain low, but rise with cold and rain. Should there be a local cold spell, high rainfall, or if the hemp plant was seeded late in the season and the harvest runs into the fall, THC levels could rise quickly. When this happens, farmers will have to chop down the plant to control the level and harvest the plant’s flower before its next THC test.As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown.
Q: Can I transport hemp across state lines to a processor in another state?
A: On paper, industrial hemp is legal across all 50 states, and therefore can be transported across state lines and sold as any other commodity. In reality, though, hemp is undistinguishable from cannabis to the naked eye, and therefore, shipping an entire biomass directly from the field across state lines has a good chance of being confiscated.
When hemp is confiscated on the side of the road – even if it is eventually returned – there could be significant lag in delivery, storage is uncertain and quality control can’t be maintained. Alternatively, farmers are now shipping their hemp in smaller, unmarked loads, which is forcing them to hold onto product for longer than usual.
As with any emerging market, there is still a lot of doubt surrounding the growth and sales of industrial hemp, as many risks are unknown. On the flip side, industrial hemp offers small farmers and agribusinesses alike an unprecedented opportunity to get in at the ground floor of a new crop. If you do, make sure to work with your insurance broker to secure proper coverage immediately.
With recent changes in federal and state law, and growing consumer awareness, the long-dormant hemp industry may finally be able to take heed of George Washington’s advice, “Make the most you can of [India Hemp] … The Hemp may be sown anywhere.”1
Hemp has a long and varied history in the United States. Throughout his lifetime, George Washington cultivated hemp at his Mount Vernon Estate, and, for a time, Washington even considered replacing tobacco with hemp as the Estate’s primary cash crop.2 Like Washington, Thomas Jefferson grew hemp at Monticello and his lesser-known Poplar Forest plantation.3 Both Founding Fathers primarily used the hemp cultivated on their property for making household items like clothing, rope, and fishing nets.
From the colonial era until 1970, hemp was routinely cultivated across the United States for industrial use. But, with the passage of the Controlled Substances Act (“CSA”) in 1970, U.S. hemp production ceased.4 The CSA banned cannabis of any kind, eliminating any distinction between hemp and other types of cannabis. As a result, hemp production became illegal in the United States.
More recently, the U.S. government finally began to ease restrictions on hemp cultivation and production. The 2014 Farm Bill introduced the USDA Hemp Production Program.5 Under the Program, universities and state departments of agriculture are allowed to cultivate hemp if:
The industrial hemp is grown or cultivated for purposes of research conducted under an agricultural pilot program or other agricultural or academic research; and
The growing or cultivating of industrial hemp is allowed under the laws of the state in which such institution of higher education or state department of agriculture is located and such research occurs.
The 2014 Farm Bill did not remove hemp from the auspices of the CSA, nor did it address the continuing application of federal drug control statutes to the growth, cultivation, manufacture, and distribution of hemp products.
The 2018 Farm Bill built upon the deregulation that began in 2014.6 Although both the 2014 and 2018 bills define hemp as the plant Cannabis sativa L. and any part of that plant that has a delta-9 THC concentration of 0.3% or less by dry weight,7 the 2018 Farm Bill took the additional step of removing hemp from the federal list of controlled substances and categorized it as an agricultural product. As a result, the production of hemp is now subject to USDA licensure and regulation. However, until the USDA completes its rulemaking process for implementing hemp regulation, hemp production remains illegal unless done in compliance with the terms of the earlier 2014 bill.8 For the time being, legal cultivation of hemp still must occur in a state that has authorized hemp research9 and the researcher must be either an institute of higher education or a state department of agriculture (or its designee).
With the increasingly favorable changes to federal and state law allowing for the expanded cultivation and production of hemp in the United States, the market is expected to grow significantly in the coming years. In 2014, the U.S. industrial hemp market was estimated at approximately $504 million.10 In only one year after the passage of the 2014 Farm Bill, the industrial hemp market was estimated to have increased by over $95 million to almost $600 million. By 2017, the worldwide market for industrial hemp was estimated to be $3.9 billion and growing at a compound annual growth rate (CAGR) of 14%.
In addition to favorable changes in U.S. law, the hemp market is benefiting from growing consumer awareness and demand for hemp-based food products.11 High in omega-3 and omega-6, amino acids and protein, hemp is growing in popularity as a cooking oil, dairy substitute, flour source and bakery ingredient. Among other things, hemp is considered by some to provide positive health effects for those seeking help with insulin balance, cardiac function, mood stability, and skin and joint health.
Although hemp cultivation is now allowed in the U.S.—at least for research purposes—and the market is forecasted to rise steadily under growing demand for hemp-based products, broad access to viable, legal seeds continues to present a challenge for researchers and commercial growers. In order to legally implement authorized cultivation programs and take economic advantage of a swiftly growing market, farmers must have access to seeds that can be guaranteed to consistently produce plants that fall under the legal definition of hemp. In an attempt to alleviate the problem, several states, including California, Indiana, Maine and Oregon, have implemented programs to license or certify compliant seed distributors and producers.
The importance of hemp seed availability and development has also been recognized on the federal level. On April 24, 2019, the USDA Agricultural Marketing Service published a Notice to Trade announcing that the USDA’s Plant Variety Protection Office (“PVPO”) is now accepting applications of seed-propagated hemp for protection under the Plant Variety Protection Act (“PVPA”). Among other things, the PVPA provides intellectual property protection to breeders who have developed new varieties of seed-propagated plants. Under the new guidance, breeders of new hemp varieties can now secure protection pursuant to the PVPA. Those holding a certificate of protection from the PVPO can exclude others from marketing or selling a registered hemp variety and manage how other breeders and growers use their protected variety.
The process for requesting protection under the PVPA is fairly straightforward. Breeders, or their attorneys, must complete all application forms, pay the required fees,12 submit a distinct plant variety name, and provide a deposit of at least 3,000 viable and untreated seeds of the variety (or 3,000 seeds of each parent variety for a hybrid). One required form for a completed PVPA application is the Objective Description of Variety form.13 This form provides a series of questions that identify the distinct aspects of the variety in question, including, among other things, plant and leaf characteristics, seed properties and anticipated uses. Upon receipt of the completed application and fees, the PVPO examines the application to determine whether the listed plant variety is new, distinct, uniform, and stable. If the PVPO determines that the requirements are satisfied, it will issue a certificate of protection granting the owner exclusive rights to the registered variety for a period of 20 years.Now is the time for farmers, researchers, and hobbyists alike to take advantage of the expanded opportunities available for protecting intellectual property for proprietary hemp varieties.
Although hemp has traditionally been used in the textile and fiber industries, the estimated 17.1% CAGR in the hemp seed segment is being driven by the increase in demand for hemp oil, seedcakes, and other food and nutraceutical products. These products are primarily derived from the hemp seed as opposed to its fibers. Presently, hemp seeds contain approximately 30-35% oil, of which approximately 80% is essential fatty acids, and 25% crude protein.14 Under the new PVPA guidelines, if a breeder is able to cultivate a sustainable plant that increases the plant’s production of the desirable compounds, he or she could achieve a significant position in the growing market.
The protection provided by the newly expanded PVPA builds upon other avenues of intellectual property protection now available to hemp breeders and growers. In addition to the PVPA, plants meeting certain criteria may also be protectable under a plant patent or a utility patent, both of which are administered by the U.S. Patent and Trademark office. Generally speaking, PVPA protection may be available for seeds and tubers, plant patent protection applies to asexually propagated plants, and utility patent protection may be available for genes, traits, methods, plant parts and varieties.15
With a market that is expected to grow substantially in the near future, and with the passing of increasingly friendly federal and state legislation, the hemp industry is on the cusp of significant expansion. Now is the time for farmers, researchers, and hobbyists alike to take advantage of the expanded opportunities available for protecting intellectual property for proprietary hemp varieties.
George Washington to William Pearce, 24 February 1794.
To date, at least 41 states have passed legislation authorizing hemp cultivation and production programs consistent with federal law. As of the date of this article, those states that have not enacted legislation allowing the cultivation of hemp for commercial, research, or pilot purposes include: Connecticut, Georgia, Idaho, Iowa, Louisiana, Mississippi, Ohio, South Dakota, Texas, and the District of Columbia.
Currently, the Food and Drug Administration prohibits hemp-based CBD in food and beverages. However, the FDA has set a public hearing to discussing the legalization of CBD in food and beverages for May 31, 2019.
The PVPA application fee is currently $4,382 with an additional fee of $768 due upon issuance of a certificate of registration.
Hemp Seed (Cannabis sativa L.) Proteins: Composition, Structure, Enzymatic Modification, and Functional or Bioactive Properties,Sustainable Protein Sources (Ch. 7), R.E. Aluko (2017).
Regulations are currently under consideration that could expand or otherwise modify the scope of protection available under each of the enumerated intellectual property protection schemes. Consult a licensed attorney for questions regarding the specific program that may apply to a particular set of circumstances.
Folks from around the country and the world tuned into the U.S. Food & Drug Administration (FDA) website as they held a public hearing on Friday, May 31. Manufacturers and suppliers asked the FDA to regulate CBD like food or dietary supplements, while the FDA seemed to want more evidence on the safety of CBD products before giving the greenlight.
Background On The Hearing
For the uninitiated, after President Trump signed the Farm Bill into law back in December 2018, Scott Gottlieb, now former director of the FDA, issued a statement the same day the Farm Bill passed, clarifying the FDA’s regulatory authority. In the statement, Gottlieb explained that Congress preserved the FDA’s authority to regulate products containing cannabis and its constituents under the Federal Food, Drug, and Cosmetic Act (FD&C Act).
In April 2019, around the same time he resigned from the FDA, Gottlieb issued another statement, acknowledging the quickly growing industry throughout the country and total lack of federal regulatory guidance. This time around, Gottlieb laid out a handful of steps that the FDA plans on taking to address regulations around hemp and cannabidiol (CBD). Those included scheduling the public hearing for May 31, where written and oral public comments were submitted by stakeholders, sharing “their experiences and challenges with these products [hemp and CBD products], including information and views related to product safety.”
That statement also announced the formation of an internal agency working group to “explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed; including a consideration of what statutory or regulatory changes might be needed and what the impact of such marketing would be on the public health.”
Fast-forward to May 31, the day of the public hearing, and all eyes in the industry focused on what all these stakeholders had to say to the FDA about CBD. The day started off with about two hours of oral comments, each speaker had roughly two minutes to deliver their thoughts.
Industry stakeholders representing cannabis businesses sang much of the same tune, clamoring for wise regulations on safety, testing, banking and interstate commerce, among other standards. NCIA Policy Director Andrew Kline’s comments included running through five major positions of the industry trade organization representing CBD companies. Those included recommending the FDA act quickly in setting up regulations, stressing the massive economic impact of the industry, saying that CBD products are generally safe, clamoring for voluntary, consensus-based standards and informing consumers of any potential risks. “The bottom line is this – an overwhelming preponderance of evidence indicates that cannabis and cannabis-derived compounds present minimal health and safety concerns,” Kline told the folks at the FDA. “Time is of the essence. Hemp-derived CBD products are in very high consumer demand and the industry is eagerly awaiting FDA’s regulatory framework for these products. We strongly recommend that FDA act quickly to clarify the regulatory environment because there is significant confusion in the market.”
Anna Williams, representing the American Association for Laboratory Accreditation (A2LA), stressed the importance of testing for contaminants and adulterants as well as advocating for national standards on lab testing, instead of the state-by-state network of different standards.
Patients & Public Safety
After industry stakeholders had their chance to speak, the FDA allowed a group of advocacy organizations representing patients time to speak. That included representatives for the Alzheimer’s Association and the American Epilepsy Society, both of which were hesitant to throw their full support behind CBD as medicine. Kevin Chapman with the American Epilepsy Society said he wants to see clear warning labels, testing standards, more clinical trials and more studies before the group is ready to form a position on using CBD as medicine. Keith Fargo with the Alzheimer’s Association supports clinical trials to study it more, but thinks CBD is risky for patients without serious evidence of efficacy. A representative from the Tuberous Sclerosis Alliance also echoed similar concerns. They want to see labeling of drug interactions on labels of CBD products.
After those comments, some organizations had the chance to speak followed by comments from retailers and distributors. Patrick Bird, owner of PMB BioTek Consulting, spoke on behalf of AOAC International, where he primarily discussed public safety. He said they want cannabis products to be regulated with food safety in mind, asking for FSMA to apply to hemp products. They want to adequately ensure product safety with things like mandating HACCP plans, recall readiness, saying hemp products should be treated just like food products.
Retailers & Distributors
Peter Matz, representing the Food Marketing Institute, the trade association for the supermarket industry, said that regulatory ambiguity is a serious issue that needs addressing. “There is mass confusion in the marketplace for the public, suppliers, retailers and state regulators,” says Matz. “Demand for CBD products in human and animal use is growing rapidly. ¼ of American have already tried it. We are fielding questions from companies seeking clarity regarding the current federal regulatory framework.” He added, what many others also mentioned, that the FDA needs to move swiftly to provide a pathway to regulation.
Next on the docket came presentations from state government entities, including state departments of agriculture, followed by healthcare professionals. The state regulators that spoke mentioned a lot about food safety, standards, testing regulations, GMPs and things like that to protect consumer safety. “Currently states are struggling with the lack of sound scientific research available in CBD and long-term health impacts,” said Pam Miles, representing the Virginia Department of Agriculture.
One interesting aspect on their talks however was telling the FDA just how large their markets have gotten already and how they need guidance on how to regulate markets in their own states. Joseph Reardon, with the North Carolina Department of Agriculture, said they already have about 600 farmers growing hemp and thousands of processors working with the product in their state. “We urge the FDA to resolve the statutory issues improperly establish a legal pathway for CBD products to enter the market place,” Reardon commented. He also asked that the FDA extend the written comment period from July to August. “We are simply looking for a regulatory framework on the extraction, production and reconstitution of CBD or cannabinoid related products.”
Healthcare & Research
Healthcare providers, and physician testimony also echoed a lot of the same concerns, including the lack of research done, concerns about effects on at-risk populations and concerns about use as ingredients in dietary supplements and food. Some of the presentations also highlighted the room for nefarious activity in an unregulated marketplace. Some went as far as to mention cases where they found CBD vape juices with DXM in it (the active ingredient in cough syrup), CBD products found to contain THC, as well as synthetic cannabinoids responsible for drug overdose deaths. Some advocates in the hemp and CBD community have equated these arguments similar to reefer madness.
The major takeaway from this hearing is that everyone wants to see more data. Researchers and healthcare providers want to study the efficacy of CBD used in medicine, regulators want public safety information, patient advocates want to see data about effects on at-risk populations, trade organizations want data to back up label claims and the FDA wants to see just how safe CBD really is.
Within two days of announcing the opening of license applications for growing hemp, the Illinois Department of Agriculture received roughly 350 applications. According to the Lincoln Courier, that number has since grown to 575 applications in the past couple weeks. The Illinois Department of Agriculture has already issued 341 licenses for growing and 79 for processing, as of last Friday.
According to Jeff Cox, Chief of the Bureau of Medicinal Plants at the Illinois Department of Agriculture, a lot of this excitement comes from farmers wanting to branch out from the state’s traditional crops, such as corn and soybeans. “Corn and soybean prices have not been the best over the past few years, and so I think they see this as an opportunity to have a different source of income on their farm,” Cox told the Lincoln Courier.
Morgan Booth, spokeswoman for the Illinois Department of Agriculture told the Chicago Tribune that they were expecting this kind of enthusiasm among farmers. “We knew there was a lot of interest in it,” says Booth. “We were very pleasantly surprised.”
Back in late December of 2018, after the Farm Bill was signed into law, the Illinois Department of Agriculture was quick to jump on the hemp train. They announced their intentions to submit plans for a program to the federal Department of Agriculture, opened a 90-day public comment period, and finalized the rules in April. The state’s regulators hoped to expedite the process and have farmers growing hemp by June 1, which appears to be successful. Dozens of hemp farmers throughout the state are anticipating their first crops will be in the soil by the end of the month.
Last week, the United States Patent and Trademark Office (USPTO) published an Examination Guide to provide further clarity for how they assess the legitimacy of trademarks for cannabis products. For the uninitiated, the 2018 Farm Bill, which President Trump signed into law on December 20, 2018, removed hemp-derived cannabidiol (CBD) from the Controlled Substances Act. In order to register a trademark in the United States, the mark must be used in a lawful setting, meaning that the USPTO does not register trademarks for products that violate federal law- even if it is legal under state law.
In their guidance document, the USPTO identifies the distinction between hemp and other cannabis varieties as the basis for either issuing or refusing a trademark registration. This means that in the trademark application, companies need to specify that the cannabis product is derived from hemp, or cannabis with less than 0.3% THC in dry weight.
The USPTO clarifies that applications for trademarks that involve CBD filed before December 20, 2018 will be refused, but if they amend the filing date to after that date, the registration will be examined. Below is a direct quote from their examination guide clarifying this:
For applications filed before December 20, 2018 that identify goods encompassing CBD or other cannabis products, registration will be refused due to the unlawful use or lack of bona fide intent to use in lawful commerce under the CSA. Such applications did not have a valid basis to support registration at the time of filing because the goods violated federal law. However, because of the enactment of the 2018 Farm Bill, the goods are now potentially lawful if they are derived from “hemp” (i.e., contain less than 0.3% THC). Therefore, the examining attorney will provide such applicants the option of amending the filing date and filing basis of the application to overcome the CSA as a ground of refusal.
Under the Federal Food Drug and Cosmetic Act (FDCA), using a drug in a food or dietary supplement that is currently undergoing clinical trials is illegal (as is the case here- see Epidiolex for an example of CBD being used as an active ingredient in an FDA-approved clinical trial). According to the USPTO, this means that “registration of marks for foods, beverages, dietary supplements, or pet treats containing CBD will still be refused as unlawful under the FDCA, even if derived from hemp, as such goods may not be introduced lawfully into interstate commerce.”
Regarding trademarks for services involving “cannabis and cannabis production,” the USPTO also issued guidance. This section of the Examination Guide pertains to companies applying for a trademark that fall in the category of ancillary services, such as growing supply companies, lighting, nutrients, pest control and packaging, among other service providers. Basically, this section boils down to the same distinction the Farm Bill made between hemp and other varieties of cannabis. An applicant for a trademark needs to make clear their identification of services offered as involving cannabis containing less than 0.3% THC.
President Trump signed the Agriculture Improvement Act of 2018 (the Farm Bill) into law late in December of 2018, which removed hemp-derived cannabidiol (CBD) from the Controlled Substances Act in states that choose to regulate it. Wyoming Governor Mark Gordon signing HB0171 means that the state intends to regulate the cultivation and sales of hemp-derived CBD.
Scott McDonald with the Wyoming Department of Agriculture told Wyoming Public Media that once the bill is signed, the state has 30 days to show their plans for regulation to the federal government. “We were kind of hoping to get something in place this spring for this growing season,” McDonald told Wyoming Public Media. “But we’re not sure that’s going to happen or not. There’s some uncertainty there, so it might be next year.”
McDonald also discussed the next steps that the WY Department of Agriculture needs to take to follow through on the bill’s promises, including figuring out a way to distribute licenses to hemp farmers, licensing laboratories to test hemp, insuring it has less than 0.3% THC and implementing a remediation plan for when crops test above that threshold.
According to Charlotte Peyton, a consultant with 30 years of experience in FDA regulations and experience working in the hemp industry, it is important to keep in mind that as soon as products containing hemp-derived CBD are sold across state lines, the FDA maintains regulatory authority. “If you manufacture and sell hemp products inside of a state with a state mandated hemp program, you are legal and protected under state laws, but the minute you sell across state lines, it becomes the jurisdiction of the federal government and, more specifically, the FDA,” says Peyton.
AOAC INTERNATIONAL is an independent, third party, not-for-profit association and voluntary consensus standards developing organization. Founded in 1884, AOAC INTERNATIONAL was originally coined the Association of Official Agricultural Chemists. Later on, they changed their name to the Association of Official Analytical Chemists. Now that their members include microbiologists, food scientists as well as chemists, the organization officially changed its name to just AOAC INTERNATIONAL.
Much of AOAC’s work surrounds promoting food safety, food security and public health. Their work generally encompasses setting scientific standards for testing methodology, evaluating and adopting test methods and evaluating laboratory proficiency of test methods. The organization provides a forum for scientists to develop microbiological and chemical standards.
In December of 2018, they appointed Dr. Palmer Orlandi as deputy executive director and chief science officer. Dr. Orlandi has an extensive background at the U.S. Food and Drug Administration (FDA), serving the regulatory agency for more than 20 years. Most recently, he was the CSO and research director in the Office of Food and Veterinary Medicine at the FDA. He earned the rank of Rear Admiral and Assistant Surgeon General in 2017.
Where It All Began With Cannabis
As recently as three years ago, AOAC began getting involved in the cannabis laboratory testing community, with a working group dedicated to developing standard method performance requirements for AOAC Official MethodsSM for cannabis testing. We sat down with Dr. Palmer Orlandi and a number of AOAC’s leaders to get an update on their progress working with cannabis testing as well as food security and food fraud.
According to Scott Coates, senior director of the AOAC Research Institute, they were approached three years ago to set up a working group for cannabis testing. “We created standards that we call the standard method performance requirements (SMPR®), which are detailed descriptions of what analytical methods should be able to do,” says Coates. “Using SMPRs, we issued a series of calls for methods and looked for methods that meet our standards. So far, we’ve completed four SMPRs- cannabinoids in plant material, cannabinoids in plant extracts, cannabinoids in chocolate (edibles), and one for pesticides in cannabis plant material.” AOAC doesn’t develop methods themselves, but they perform a comprehensive review of the methods and if they deem them acceptable, then the methods can be adopted and published in the AOAC compendium of methods, the Official Methods of Analysis of AOAC INTERNATIONAL.
Deborah McKenzie, senior director of Standards and Official MethodsSM at AOAC, says the initial working group set the stage for really sinking their teeth into cannabis testing. “It started with methods for testing cannabinoids in plant dried material and plant extract,” says McKenzie. “That’s where our previous work has started to mold into the current effort we are launching.” McKenzie says they are looking forward to getting more involved with methods regarding chemical contaminants in cannabis, cannabinoids in various foods and consumables, as well as microbial organisms in cannabis. “We are pretty focused on testing labs having reliable and validated analytical solutions as our broad goal right now.”
Moving Forward, Expanding Their Programs
Coates says the work they’ve done over the past few years was more of a singular project, developed strictly for creating standards and to review methods. Now they are currently developing their Cannabis Analytical Science Program (CASP), which is expected to be an ongoing program. “We are looking to fully support the cannabis analytical community as best we can, which will potentially include working on reference materials, proficiency testing, education, training and ISO 17025 accreditation, all particularly as it applies to lab testing in the cannabis industry,” says Coates. “So, this CASP work is a much bigger and broader effort to cover more and to provide more support for labs doing the analysis of cannabis and its constituents, as well as hemp.”
According to Dr. Orlandi, they want this program to have a broad reach in the cannabis testing community. “As Scott pointed out, it’s not just strictly developing standards and methods,” says Dr. Orlandi. “It is going to be as all-encompassing as possible and will lead to training programs, a proficiency testing program and other areas.” Arlene Fox, senior director of AOAC’s Laboratory Proficiency Testing Program, says they are actively engaging in proficiency testing. “We are in the process of evaluating what is out there, what is possible and what’s needed as far as expanding proficiency testing for cannabis labs,” says Fox.
Regulatory Challenges & Obstacles
The obvious roadblock to much of AOAC’s work is that cannabis is still considered a controlled substance. “That creates some challenges for the work that we do in certain areas,” says Dr. Orlandi. “That is why this isn’t just a one-year project. We will work with these challenges and our stakeholders to address them.” AOAC had to put some limits on participation- for example, they had to decide that they cannot look for contributions or collaborations with producers and distributors, so long as cannabis is still a Schedule I controlled substance in the US.
Muddying the waters even further, the recent signing of the Farm Bill puts a clear distinction between most types of cannabis and industrial hemp. David Schmidt, executive director of AOAC realizes they need to be realistic with their stakeholders and in the eye of federal law.
While scientifically speaking, it’s pretty much the same plant just with slightly different chemical constituents, AOAC INTERNATIONAL has to draw a line in the sand somewhere. “As Palmer suggests, because of the Farm Bill being implemented and hemp being defined now as a legal substance from a controlled substance standpoint, industrial hemp has been given this exclusion,” says Schmidt. “So, we are trying to be realistic now, working with our stakeholders that work with hemp, trying to understand the reality of the federal law. We want to make clear that we can meet stakeholder needs and we want to distinguish hemp from cannabis to remain confident in the legality of it.” Schmidt says this is one of a number of topics they plan on addressing in detail at their upcoming 9thannual 2019 Midyear Meeting, held March 11-14 in Gaithersburg, Maryland.
Uniformity in Methodology: The Future of Cannabis Testing
Dr. Orlandi says his experience at the FDA has prepared him well for the work being done at AOAC. “The role that I served at the FDA prior to joining my colleagues here at AOAC was very similar: And that is to bring together stakeholders to accomplish or to solve a common problem.” Some of their stakeholders in the CASP program include BC Testing, Inc., the Association of Food and Drug Officials (AFDO), Bia Diagnostics, Bio-Rad, Industrial Laboratories, Materia Medica Labs, PerkinElmer, R-Biopharm AG, Supra R & D, TEQ Analytical Laboratories, Titan Analytical and Trilogy Analytical, among others.
“The underlying reason behind this effort is to create some level of harmonization for standards and methods,” says Dr. Orlandi. “They can be used in the near future to stay ahead of the curve for when regulatory agencies become involved. The idea is that these standards for analytical methods will already be established and as uniform as possible.”
When comparing cannabis to other industries in the US, Scott Coates mentions that most standards are signed off by the federal government. “When we started looking at pesticides in cannabis, it became really clear that we have a number of states doing things differently with different limits of quantification,” says Coates. “Each state, generally speaking, is setting their own standards. As Palmer was saying, one thing we are trying to do with this CASP program eventually will be to have some harmonization, instead of 30 different states having 30 different standards and methods.” So, on a much broader level, their goal for the CASP program is to develop a common set of standard methods, including hemp testing and even the Canadian market. “Hopefully this will be an international collaboration for standards for the methodology,” says Coates. They want to create a common set of standards, setting limits of quantification that will be accepted internationally, that will be accurate and repeatable and for the entire cannabis industry, not just state by state.
Food Authenticity & Fraud
One of the other activities that AOAC just launched recently is the food authenticity and fraud program. As the name implies, the goal is to start developing standards and methods and materials to look at economically adulterated foods, says Dr. Orlandi. That includes non-targeted analyses looking at matrices of food products that may be adulterated with an unknown target, as well as targeted analytes, identifying common adulterants in a variety of food products. “One example in the food industry is fraudulent olive oil,” says Dr. Orlandi. “Honey is another commodity that has experienced adulteration.” He says that in most cases these are economically motivated instances of fraud.
The hemp industry is the marijuana industry’s half-sister. Both are variations of the plant Cannabis sativa and both were made illegal in 1937 with the passing of The Marijuana Tax Act. Despite this federal status, in recent years 33 individual states have legalized some type of medicinal marijuana use and 11 states now allow legal recreational marijuana within their borders. This prompted congress to modify the legality of hemp which was addressed in The Agricultural Act of 2014, but it only allowed hemp to be used for research purposes. The Agriculture Improvement Act of 2018 (known as the 2018 Farm Bill) that was signed into law on December 20, 2018 was a huge step forward for public access to hemp and hemp products. The 2018 Farm Bill legalized the growing of hemp in states with a state-mandated hemp program and removed hemp and its derivatives from Drug Enforcement Administration (DEA) Schedule I status. Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are heroin, lysergic acid diethylamide (LSD), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote. Consumers and the cannabis industry alike were very excited about this legalization of hemp…. but that was when the confusion began.
FDA & Hemp
Within two hours of the 2018 Farm Bill being signed, the Commissioner of the FDA, Dr. Scott Gottlieb, issued a statement reiterating the FDA stance on cannabis products and cannabidiol (CBD) in products for human and animal consumption: “Congress explicitly preserved the agency’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act.” Currently the FDA only permits CBD products submitted as an Investigational New Drug (IND) Application as a pharmaceutical. There is only one such accepted CBD product, Epidiolex, manufactured by G.W. Pharma. All other CBD products are illegal for interstate shipment.
Every product for sale in the US which is either ingested or applied to a human or animal body has a regulatory category in the FDA. Hemp-derived CBD products will have to fit into one of those categories or it will not be legal. Many hemp manufacturing companies will argue with the illegality of CBD products, but it will get them nowhere. If you manufacture and sell hemp products inside of a state with a state mandated hemp program, you are legal and protected under state laws, but the minute you sell across state lines, it becomes the jurisdiction of the federal government and, more specifically, the FDA. Section 10113 of the 2018 Farm Bill states that (c) Nothing in this subtitle shall affect or modify:
(1) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.);
(2) section 351 of the Public Health Service Act (42 U.S.C. 262); or
(3) the authority of the Commissioner of Food and Drugs and the Secretary of Health and Human Services- ‘‘(A) under- ‘‘(i) the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); or ‘‘(ii) section 351 of the Public Health Service Act (42 U.S.C. 262); or ‘‘(B) to promulgate Federal regulations and guidelines that relate to the production of hemp under the Act described in subparagraph (A)(i) or the section described in subparagraph (A)(ii).”
There is nothing unclear about this issue. The same 2018 Farm Bill that hemp manufacturing companies use to justify the legality of hemp and CBD products is the same bill that spells out the authority of the FDA in this matter.
The mission of the FDA is “to ensure the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices.” The agency also is responsible for “the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.” Health or medical claims not supported by clinical proof will not be tolerated. An unsafe, unclean or untested product will also not be tolerated in the marketplace.
CBD Oil vs. Isolate
Then there is the matter of CBD as either a full spectrum oil vs. an isolate…Unlike marijuana flower which is a very popular product, hemp flower is very rarely sold at the retail level. Full spectrum oil is extracted from the plant, and depending on the solvent used, produces an oil with the same, or close to the same, naturally occurring chemicals from the plant. The oil therefore, includes all the cannabinoids present along with any terpenes, lipids or other compounds present in the plant. Full spectrum oil is a botanical extract and is a dark thick oil. Isolate is produced by separating the constituents of the full spectrum oil by molecular weights or boiling points to have very pure chemicals in the 95%+ purity range. CBD isolate is a white crystalline substance and bears the greatest resemblance to a synthetic raw material and at its purest form cannot be distinguished as coming from a plant in the dirt or a synthesized chemical. Epidiolex is produced from hemp isolate and was approved by the FDA as a pharmaceutical. Full spectrum hemp oil is a botanical extract, often as an ethanol extraction. Full spectrum oil bears the greatest resemblance to a botanical dietary supplement. It remains to be seen what the FDA will allow in the future.
The FDA has made it abundantly clear in numerous warning letters issued to the cannabis industry that drug claims (articles intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease) regarding CBD, oil or isolate, cannot be made without pharmaceutical approval of the Drug Facts (Epidiolex) lest there be enforcement consequence.
The labeling of other types of products are less clear. Dietary supplements are a category of foods with the FDA and as such both the labeling of dietary supplements and foods are dictated in 21 CFR 111, Food Labeling. Botanical dietary supplements frequently call out a chemical constituent within a particular botanical material or extract on the Supplement Facts Panel: Milk thistle seed extract containing standardized and labeled silymarin is such an example. Is this strategy acceptable for CBD with the FDA? What about “naturally occurring” CBD? Food claims are indicated in the Nutrition Facts, what can these be for CBD? Cosmetic product claims can only address articles intended to be applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance without affecting the body’s structure or functions. What is the purpose of CBD in a cosmetic?
FDA guidance would be very beneficial in all of these labeling areas, and there is hope. The FDA is promising public hearings this spring to discuss a path forward for having hemp food and dietary supplements. The FDA will ask for public comment and hopefully, there will be a lot of public comments provided to them. The public’s huge demand for CBD products will bear pressure on the FDA to at least listen and consider.
cGMPsRegulatory compliance will be difficult, and it will be expensive.
Those currently in the hemp manufacturing industry should pay attention and take the FDA seriously. If the FDA allows hemp products with CBD to be sold in the future, it will be the FDA who makes those regulations and those products will have to fit into an already existing FDA category: human food, animal food, dietary supplement, pharmaceutical or cosmetic. If you are a hemp product manufacturer, you must learn the applicable requirements for Current Good Manufacturing Practices (cGMPs) by hiring experienced FDA compliance personnel, and/or seeking out FDA regulatory consultants, to develop and implement a quality system accordingly:
21 CFR 117, Current Good Manufacturing Practice, Hazard Analysis, and Rick-Based Preventative Controls for Human Food
21 CFR 507, Current Good Manufacturing Practice, Hazard Analysis, and Rick-Based Preventative Controls for Food for Animals
21 CFR 111, Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements
21 CFR 210, Current Good Manufacturing Practice in Manufacturing, Processing, Packing, or Holding of Drugs; General
21 CFR 211, Current Good Manufacturing Practice for Finished Pharmaceuticals
FDA Draft Guidance for Industry, Cosmetic Good Manufacturing Practice, June 2013
I believe in this industry and I am rooting for the pioneers who have taken all the risk thus far, but the level of denial of the FDA’s authority that I am hearing in the hemp industry community is disturbing to me because those companies will not manage the transition to a regulated future. Most don’t understand it and they don’t think it applies to them or their products. Regulatory compliance will be difficult, and it will be expensive. The hemp pioneers deserve to benefit from their labor and the risk they have taken. For those hemp product companies that do not think compliance is worth the effort or cost, there are many FDA-compliant human food, animal food, dietary supplement, pharmaceutical, or cosmetic companies that are waiting to take your business…
Editor’s Note: While Cannabis Industry Journal typically does not use the term ‘marijuana,’ the author here is speaking from a regulatory point of view and creates an important distinction. Peyton chose the word “marijuana” instead of “cannabis” because the FDA has chosen “cannabis” to refer to both marijuana and hemp.
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