Since the legalization of marijuana in a growing number of states and of hemp-derived CBD at the federal level, lawmakers have been hard pressed to keep pace with the explosive growth of the industry. However, with a number of potential sources for regulatory developments in both industries on the horizon, 2021 could be the year for greater legalization and regulatory clarity for marketing these products.
In the CBD marketing industry, the one thing made crystal clear is the FDA and FTC’s stance on making unsupported health benefit claims about CBD-infused products (in sum: don’t make them). Otherwise, the overall state and federal framework of laws and regulations for CBD marketing leaves much to be desired in terms of clarity and consistency. Such regulatory uncertainty is arguably the chief deterrent to the growth of a CBD-infused product market whose significant, and ever-increasing, consumer demand, makes it is a veritable tinder-box for potential investors. And the enactment of groundbreaking CBD-related legislation in 2021 could be the match that the market is waiting for.
Enter H.R. 8179, the “Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2020.” Introduced on September 4, 2020, the legislation is still pending. But, if enacted, it would allow hemp-derivatives like CBD to be included in and regulated by the FDA as dietary supplements under the FD&C Act. This would require CBD sellers to comply with the arguably stringent marketing and labeling requirements imposed by the FD&C Act on all dietary supplements and would still not allow the inclusion of CBD in foods. That said, it would appear to be a step in the right direction for the CBD-industry and with a senate, house, and presidency all controlled by a single party, the path for those steps may be smoother in 2021.
In terms of marijuana marketing developments, 2021 will make California the testing ground for yet another alcohol-industry inspired regulatory regime. Included in Proposition 64 when it passed in 2016, the California Cannabis Appellations Program will prohibit marijuana sellers from including the names of certain regions in marketing unless the marijuana was actually grown there under certain conditions. Similar to programs in the wine industry, this may help local marijuana growers in California highlight their marijuana’s unique flavor, potency, and other qualities resulting from the unique soil and environment of their region.
The program is in its infancy, as the California Department of Feed and Agriculture who will enforce the program was only required to establish the application process by January 2021. But given the common use of regions in cannabis strain names (e.g., Maui Wowie), even ones particular to California (e.g., Acapulco Gold, Humboldt OG), it should be interesting to see how the program plays out in practice.