Hello and welcome back to Hemp Legally Speaking Frost Brown Todd's podcast on all of the hemp laws and regulations that are affecting the industry and that impact farmers, businesses and consumers when it comes to hemp and products like CBD.

I'm Jonathan Miller. I'm your host. I am also the general counsel for the U.S. Hemp Roundtable. The industry's a national advocacy organization. And I am in the fun position of helping interpret laws that I helped advocate for as a lobbyist for the hemp industry and continue to do so now, which is a subject of our conversation today.

One of our big challenges right now is as an industry, particularly when it comes to CBD, is that we have both some regulatory uncertainty as well as a lot of inconsistency.

The regulatory uncertainty is at the federal level, where the FDA has refused to refuse to recognize CBD as a legal, ingestible product. And the inconsistency is at the state level, where states have filled this vacuum by passing a lot of laws or promulgating a lot of regulations which impact various aspects of commerce and that are different from each other.

So to help us sort through this is really our firm's expert when it comes to the FDA, when it comes to the FTC, the Food and Drug Administration, the Federal Trade Commission and its treatment of hemp products. And we're going to talk specifically today about labeling.

And if you are a hemp product manufacturer, CBD manufacturer out there, we're going to talk about what you need to be concerned about when it comes to labels on your products. And more pragmatically, what kinds of issues come up when and when we're when we're looking at the FDA and the FTC and how they address the industry.

And our expert is Kimera Hall. Kimara is a member of the firm in our Dallas office and a expert when it comes to not only just hemp and CBD, but also other food and beverages and labeling in this area. Kimera, welcome to the podcast.

Thanks, Jonathan. Happy to be here.

So I do want to kind of take a step back before we dive into hemp and CBD and just talk a little bit about both the FDA and the FTC and what their role is when it comes to regulating dietary supplements and food products like CBD.

Sure. So generally, the FDA is the primary regulator of both food products, which would include beverages as well, and dietary supplements. So the FDA has primary jurisdiction over what I'm going to call ingestible products.

They regulate everything from the manufacturer, you know, ingredient components, safety labeling, as you mentioned, and also the marketing of those products. And so, you know, it's important to note that with respect to kind of the focus on labeling here, the FDA has jurisdiction over both product labels and what the FDA calls product labeling.

And generally labeling is anything that is any written materials or or otherwise that accompany a product. And so the FDA has interpreted that to mean it's a product with a website or a company website.

So the general rule is if your product label that actually appears on the product contains your URL for your company or product website, then your entire website is labeling according to the FDA.

And therefore, FDA would have jurisdiction over that as well. And that's an important point for manufacturers to keep in mind as they're trying to navigate the regulatory landscape for CBD products. And just remembering that your website is very likely subject to FDA jurisdiction as well.

Great. So we have a lot of instead of four letter words, we've got a lot of three letter words. So let's talk about the FTC. The FTC also has jurisdiction here. And how does that and does that square with what the FDA does?

Sure. So the FTC, the Federal Trade Commission, has its general jurisdiction over advertising and marketing. So obviously food and dietary supplement products are also are advertised and marketed. The FTC would have jurisdiction where the FDA might not. So some examples to think about would be a TV commercial, perhaps, or a radio spot where the FDA may not

have jurisdiction because it's not considered label or labeling. The FTC would then have jurisdiction over that. The you know, it's important to note that the when looking at food and beverage products, the FTC generally falls back on what the FDA regulations and stance is.

So general rule, if you couldn't do it on your label or labeling, you probably shouldn't be doing it on something that's under the FTC jurisdiction either because they will use those same guidelines. And of course, the FTC general standard for advertisements that everything needs to be truthful and not misleading applies as well.

Yeah. And, you know, we've seen over the last several years when it comes to hemp and CBD products in particular, that these two agencies have worked well together. And the FTC usually is comes out right after the FDA does or sometimes at the same time. So they are part of the same group that's regulating these products.

So the FDA, I think probably most of our listeners know, has claimed that it is illegal to sell ingestible CBD products. Can you briefly share why, how they come to that conclusion?

Sure. To the to the consternation of the entire industry. So there are two regulations in the federal food, drug and cosmetic at one of the regulations relates to food and the other two supplements, but they're both very similar. And generally, what those regulations state is that if a substance, either one is an active ingredient in a drug.

Or two has been authorized for investigation as a new drug and substantial clinical investigations have been started. And those investigations have been publicized, then that ingredient cannot be marketed in foods or supplements.

And so, of course, you know, we have one drug that's been approved, Apper Dialects is approved for, I believe, two specific types of epilepsy.

But the push to get CBD legalized from an FDA perspective, you know, had started prior to the approval of that drug. However, the FDA stated that, you know, they don't have enough evidence to determine that the that CBD was used in either foods or supplements prior to the published that publication of the clinical trials for that drug.

There is also on the food side, a exception that says if a food was if a ingredient was marketed prior to a certain date, which I believe is 1984 for foods, that, you know, it's kind of grandfathered in. And so industry's perspective is, yes, CBD has been in been in these types of products for years and years and predates that date in the statute.

The FDA has come back and said, you know, we just don't have enough evidence. And we determined that it was not. And therefore, CBD is not a approved ingredient in either of these types of products.

So we've heard what the FDA says. What have they actually done in terms of enforcement actions when it comes to these companies?

So while these products are technically not legal, the FDA does recognize that there are a number of them on the market. They're very popular. You know, consumers want them and they for the most part, to date, they haven't they don't present a risk to consumers.

So what they've said is we we stand firm on our stance. These are not legal products. However, we are going to exercise enforcement discretion, meaning we won't take enforcement action on these products, on these CBD ingestible products.

So long as, you know, certain types of claims aren't made. There isn't a safety concern with this particular product. What we've seen from the FDA so far are warning letters to a number of CBD companies with respect to their products.

But if you look at the warning letters that have been issued, a lot of them are making impermissible claims about their product.

And that's the number one reason we've seen warning letters in with an FDA warning letter generally that the tone of that letter is here are the problems.

Let us know what you're going to do to fix them so the companies have an opportunity to fix them. So it's not a you have to take your products off the market right away.

However, obviously, companies do want to avoid receiving a letter. And also, just to note, these are public letters. So there is a goodwill hit association to receiving one of these letters as well.

Yeah. And this enforcement discretion really is an informal policy. We've been trying as an industry to get them to agree to a formal enforcement discretion policy. They haven't yet, although they certainly haven't gone after any companies that don't make these kinds of claims.

So what kinds of we're talking about claims? What are the prohibited health claims? What can you not say?

Right.

So the prohibited types of claims are what are called health or disease claims. So any claim that describes the relationship between a food or food component or a dietary supplement or supplement component and the reduced risk of a disease or health related condition.

So to put in more common terms, you know, if if there are any claims on the product or associated with the product, that the product will treat, mitigate, cure, a disease or health related condition or the effects of a disease or health related condition, then we're talking about an impermissible claim, which would then take the product over from the food or supplement category into the drug category.

And so it would be an impermissible and unapproved drug which companies would want to avoid at all costs. Some examples of claims that are not permitted would be helps manage the effects of Parkinson's disease or arthritis relief.

Obviously, the mention of a specific disease or condition is going to make something and impermissible claim. And so if a product does that, your you know, there's a greater risk that your product will be flagged by the FDA.

Yeah. And it's even prohibited to say pain relief. I mean, this is something a lot of our our clients don't know. They know not to say that's going to cure cancer or Covid. But see, a lot of folks saying pain relief. And that is also a. health claim.

But there are what are called structure and function claims that you're allowed to make. So can you describe those and what you need to do to be able to make them?

Sure. So a structure function claim is permitted in a structure function claim is a claim that describes the role of a nutrient or dietary ingredient that is intended to affect the normal structure or function of the human body.

So one that we're probably all familiar with, which would be an example of a structure function claim, is calcium build strong bones. So it's telling you the role of calcium in affecting the structure, the normal structure of a human's bones.

Right. So while these claims are permitted with respect to both foods and dietary supplements, there is a little bit of a difference with dietary supplements. You can make a structure function claim based on the supplemental effect of of any of the ingredients. With a food product, a conventional food product.

The focus of the structure function claim has to be on the benefit has to be derived from the nutritive value of whatever ingredient is the claim it's based on. and so it's a little harder to make structure function claims for conventional foods, because there has to be some other purpose for the ingredient in the product other than the benefit that that we're claiming.

So when we're talking about when we're talking about this this labeling, I know we're talking about what appears on on the label, the product itself. You mentioned the website as well. What about on that Website linking to blogs or having testimonials that fit into this?

That's a great question. So on your website, which will be deemed relabeling by the FDA, any and everything on that website will be deemed as the words of the company. So if you are including a hyperlink to a, you know, a scientific study or another website that makes claims about CBD generally not not your product in particular,

The FDA is still going to take what's on that third party site as the words of your your company and marketing your product. And so companies do need to be really careful about what they link to.

Another watch out that I always like to tell clients is testimonials.

Are likely to get you into trouble, so we'll have some clients that will be really clean with their website, but then they have a testimonial section where someone has put up that, you know, I started taking this product two weeks ago and, you know, my back my chronic back pain has been been restored.

You know, I have no more back pain. And so that's going to be a claim of the company that the FDA could latch on to. Same with blogs, blog articles.

Yeah, and a rule of thumb I've been always advised is that whether it's on the label or on your website or part of a testimonial, if it's a healthy person saying that this is going to make them feel even better, then that's probably permissible.

If it's a sick person saying that this is has made them heal, too, and that is likely impermissible. So that that's kind of a nice way to think through these sorts of issues, right?

That's right. And, you know, a good example to give of what you're talking about, Jonathan, is, you know, you can't say your product cures insomnia,

But one might be able to say, I take this product and you know, it it it contributes to my normal, healthy sleep cycles or, you know, it just it helps calm me down before I go to sleep so that I can get a good night's sleep. So you can't say insomnia, but you can you can talk about how it helps your sleep. You just have to be careful how you do that. Right.

So we've been going through what's happening on the federal level. There's also states out there and at least a couple dozen have started with some regulations. What what what are what are we seeing in terms of labeling regulations from the states?

So, yes, because of the lack of federal movement, the states have kind of taken things into their own hands and promulgated their own regulations.

The problem with this is that now we have several states with their own regulations and they're not uniform.

And so there are differing regulations which can make compliance really difficult for companies that are selling products in multiple states. And particularly, you know, in this industry, we have a lot of online retailers that are selling nationwide. And so it in a lot of cases, it's impossible to comply with each state's regulations.

And so, you know, until there is that overarching regulatory framework, we've got kind of a patchwork which puts manufacturers and marketers in a real bind.

Yeah, I know some companies that sell across state lines sell in all 50 states or are majority of them are just banging their heads against the wall when it comes to this kind of stuff. You have a requirement in so many states that you label this as a dietary supplement?

In Louisiana, you're not allowed to use the word dietary on the label. Some states tell you you've got to list THC content. Other states say you can't list THC contents So it really becomes a real crisis when when because there's the lack of this.

But maybe the bigger picture is what the FDA says these products are legal. Why should I, as a manufacturer, care about any of these other labeling requirements if already the FDA says these things are illegal?

Sure. So, yeah, I would almost

say the fact that the FDA says they are illegal is even more of a reason to pay attention to these other requirements.

You know, I've always been of the mindset that if we know we are out of compliance in one area and we have the comfort level, I guess, of enforcement discretion with respect to these products,

it only makes sense to make sure that you're complying with all of the other labeling regulations to the letter, because once the FDA sees a noncompliance in another area, you know, they just put your product under the microscope.

It's now been red flagged and the FDA is going to look at everything. So I think it's really important that this all labeling regulations, not just the one specific to, you know, that might be more specific to CBD products, should be complied with.

So that when it when and if the the FDA does question your product, you are at least able to say we are in compliance with all labeling rules, with the exception of the fact that the CBD product and we're not making any impermissible claims.

You know, so I guess my final question is, is the biggest one of all CBD manufacturer out there or have another hemp extract product? And I want to make sure that I'm I'm not going to be in any trouble.

What do I do my my first? If someone comes to me and asked me what they do, I I introduce them to you and say, you need to you need to work with Kimera or, you know, there are also some other great FDA lawyers across the country.

But I'm pretty partial to Kimera to do a review of your website, of your labeling, and to make sure it's kosher and not going to attract FDA scrutiny. Do you have any general tips that, you know, immediately you give to clients when it comes to this process?

Yeah, one is, you know, upfront, I like to talk with them about risk mitigation. Right. You know, in the field that I practice in, there is always the tug of war between regulatory and marketing.

You have a product, you need to sell it. You need to be able to you need the consumers to know what you why they need to buy your product.

And so, as Jonathan said, you know, the best thing to do is to to have, you know, go through with a regulatory person, an attorney, have your website reviewed and your labeling, make sure it's compliant in all other ways.

And when we're talking about claims, that's where that risk mitigate, that risk analysis comes in on. You know, clearly can't say this. Here's the safest. You know, what type of risk is the company willing to take on that on that medium?

And then from a state perspective, which is obviously different from the federal perspective,

Being aware, one, that there is a patchwork of regulations across the states where you're selling and which ones which regulate what those regulations are. And then, you know, in some cases, it ends up being, you know, focus on on, you know, which states have the most restrictive labeling or maybe it's kind of finding the common denominators.

And then once you've run out of common denominators between the state regulations, focusing on the most restrictive states and really understanding what the risks re there in each jurisdiction.

Yeah, that's some great advice. And I also, you know, want to emphasize this point about risk. Risk abd your tolerance to it. If you are completely risk averse, I tell people to not get into the hemp or CBD space.

We still have when we have regulatory uncertainty, there is risk here, but it's managing that risk and balancing it against your marketing philosophy. That is going to be something that a good lawyer like Kimera can help you through.

if you're also interested in getting rid of this risk. Help the U.S. Hemp Roundtable pass legislation that will provide for federal regulation of CBD as adjustable products.

That's H.R. 841 in the House and S 1698 in the Senate, which would provide for legal pathways for the sale of CBD as a dietary supplement and food additive.

And to help us there, go to hempsupporter.com and it makes it easy for you to send emails to your members of Congress. But while you're trying to navigate this crazy process of labeling, please feel free to contact Kimera

Her email is kjhall@fbtlaw.com. That's kjhall@ F as in Frost, B as in Brown, T is in Todd .com.

And I'm, it's always, jmiller@fbtlaw.com.

But Kimera, thanks for for your elucidating ideas and thoughts. And thanks to all our listeners for joining us for this episode of Hemp Legally Speaking, where we address all the big challenges in the legal and regulatory framework of Hemp and CBD.

Thanks for joining us.

If you have questions or ideas for Hemp related topics, email us at hemplegallyspeaking@fbtlaw.com.

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