Resignation of FDA Commissioner Scott Gottlieb Triggers Uncertainty for the CBD Industry

On March 5, 2019, Scott Gottleib, the Commissioner of the Food and Drug Administrations (FDA) announced his resignation as of the end of March, 2019. This follows his recent statements as to the effect of the changes in law with respect to hemp under the 2018 Farm Bill (the “Farm Bill”). Under the Farm Bill, hemp, which is now defined as the plant Cannabis sativa L. and all derivatives of the hemp plant, with extremely low concentrations of THC (less than 0.3 percent on a dry weight basis) are no longer subject to the Controlled Substance Act (the “CSA”). In addition, it is now permissible to transport hemp across state lines. Although thought at first by many to allow the sale of cannabidiol (CBD) products across the United States, the Farm Bill preserved the authority of the FDA to regulate products containing CBD under the Food, Drug and Cosmetic Act (the “Act”).  On the same day that the Farm Bill was signed into law, Commissioner Gottleib reiterated that the Act allows the FDA to regulate all CBD products, whether or not the compound is derived from hemp, and that when these products are intended to be used for the diagnosis, cure, mitigation, treatment or prevention of disease, they are considered new drugs and it is a violation of law to market them as such if they have not gone through the FDA drug approval process. He also indicated that it remained unlawful under the Act to introduce into interstate commerce food or dietary supplements containing added THC or CBD.  Given that violations of the Act may result in monetary and criminal penalties, many entrepreneurs looking to enter the CBD market, along with those already in play, are grasping to understand the consequences of marketing and selling hemp derived CBD products nationwide.

Commissioner Gottleib did go on to acknowledge Congress’ clear interest in fostering the development of hemp products and to make CBD available outside of the pharmaceutical industry. Accordingly, he  announced plans to work on new rules to allow companies to produce consumable products containing CBD. The Commissioner stated that the FDA would kick off the rulemaking process in April by doing the following: (1) amassing a working group to examine the issues involved in regulating CBD and (2) holding a public meeting to investigate possible rulemaking that would allow CBD to be lawfully sold in food and supplements through a simpler review process than what comes along with being defined as a “drug” under the Act. The Commissioner also indicated that he was willing to work with Congress on a legislative solution if a rulemaking process was too burdensome for his agency.  The Commissioner’s statements signaled a clear commitment to address CBD regulation and institute a regulatory framework for the sale of hemp-derived CBD throughout the country.

With Commissioner Gottleib’s resignation, it remains to be seen whether his replacement will agree with his sentiment on creating new rules to establish a less burdensome regulatory pathway for CBD products, leaving a growing billion dollar industry with many questions.