Late last week, a bi-partisan pair of federal lawmakers introduced a new bill to expand cannabis companies’ access to financial resources and opportunities. Introduced by Reps. Troy Carter (D-La.) and Guy Reschenthaler (R-Pa.), the Capital Lending and Investment for Marijuana Businesses (“CLIMB”) Act, H.R. 8200, aims to permit cannabis businesses to engage with community development, small business, minority development, and other public or private financial capital sources for investment and financing. Further, the bill aims to create a safe harbor for security exchanges to list securities for legitimate cannabis businesses.
State AGs Call for Congressional Action on Copycat THC Edibles
More than 20 state attorneys general (AGs) authored an open letter to congressional leaders calling for legislation that would regulate tetrahydrocannabinol (THC) edibles that mimic the packaging and names of popular product. In their June 22 letter, the state AGs voiced their concern, particularly for children, writing that “copycat THC edibles pose a grave risk to the health, safety, and welfare of our children.” Specifically, the state AGs asked Congress to “immediately enact legislation authorizing trademark holders of well-known and trusted consumer packaged goods to hold accountable those malicious actors who are using those marks to market illicit copycat THC edibles to children.”
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Where Is the SAFE Banking Act?
As Congress continues to debate the SAFE Banking Act, cannabis business and financial institutions should pay close attention to the bill’s potential to transform the accessibility of banking and payment processing solutions within the cannabis industry. In May, a national group of state banking regulators issued open letters to Congress urging passage of the bill. This action by state banking regulators builds upon prior support from groups like the American Bankers Association as well as dozens of state governors and attorneys general. Here, we check in on the status of the SAFE Banking Act and look ahead for its implications if passed.
FDA Issues New CBD Warning Letters for Animal Products
On May 26, the FDA issued warning letters to four companies alleging that the companies sold unapproved animal drugs containing cannabidiol (CBD). Specifically, these products were intended for use in food-producing animals. In announcing the warning letters, the agency stated it was “taking steps regarding these unapproved and potentially unsafe products now to help protect animals and the safety of the food supply.”
The FDA’s latest set of warning letters builds upon the letters the agency has issued in recent years that highlight that CBD products are not approved for the diagnosis, cure, mitigation, treatment, or prevention of any disease. Just this year, the agency issued at least 14 such letters targeting consumer products. These warning letters are unique as they target companies selling products targeted for food-producing animals, rather than those focused on human consumption.
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Ninth Circuit Rules on Legality of Delta-8 THC Products
On May 19, 2022, the U.S. Circuit Court of Appeals for the Ninth Circuit issued an opinion holding that Delta-8 THC products are legal at the federal level and eligible for intellectual property protection. The Ninth Circuit held that the “2018 Farm Bill was silent with regard to Delta-8 THC,” writing that “regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress.” According to the Court, if the bill “inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.”
The case involved two companies selling products both labeled under “Cake” branding. Manufacturer AK Futures argued that a competitor was selling counterfeit “Cake” Delta-8 THC products. The competitor did not contest that it was selling counterfeit “Cake” products, but instead it argued that AK Futures could not hold a valid trademark because Delta-8 THC was illegal under federal law.
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California Proposes New CBD Regulations & Registration Requirements
California enacted statute AB 45 in October 2021, authorizing the use of hemp and hemp-derived cannabidiol (CBD) in food, beverages, dietary supplements, and cosmetics at the state level. Now, state regulators have proposed new regulations to govern the state’s hemp-derived CBD market. Comments on the proposed regulations are due by May 31, 2022.
California’s proposed regulations primarily address new registration requirements for in-state industrial hemp manufacturers and out-of-state industrial hemp extract manufacturers. In-state manufacturers of extract, human foods (including beverages and dietary supplements), cosmetics and processed pet food products containing industrial hemp will need the appropriate registration for their respective products. Manufactures may be required to hold multiple registrations for each type of product manufactured if the proposed rule is adopted.
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FDA Issues New Warning Letters For Delta-8 and CBD Products
Earlier today, May 4, 2022, the FDA issued warning letters to five companies selling products that contain delta-8 tetrahydrocannabinol (Delta-8 THC). Several of the companies also manufactured products containing hemp-derived cannabidiol (CBD). Significantly, today’s actions represent the first time the FDA has issued warning letters for products containing Delta-8 THC. According to the agency, “Delta-8 THC has psychoactive and intoxicating effects and may be dangerous to consumers,” and the FDA has received reports of adverse events after individuals consumed products containing Delta-8 THC.
Delta-8 THC is one of many cannabinoids produced in the cannabis plant, and it can have psychoactive and intoxicating effects. Products containing Delta-8 are available in numerous forms, such as edibles, extracts, and tinctures. Today’s five warning letters allege the companies violated federal law in the marketing of unapproved Delta-8 THC products as treatments for various medical conditions or for therapeutic use. The letters further claimed violations regarding drug misbranding and the addition of Delta-8 THC in food, such as gummies, chocolate, caramels, and chewing gum.
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Dr. Robert Califf Confirmed to Head FDA
By a 50-46 vote, the Senate today confirmed Dr. Robert Califf as commissioner of the Food and Drug Administration (FDA). The narrow decision reflected opposition to the nomination by several Democratic senators, notably Joe Manchin, D-W.Va., who co-wrote a recent op-ed against Califf’s nomination. Six Republicans, including Susan Collins, R-Me., and Richard Burr, R-N.C., voted
Introduction of Senate Cannabis Descheduling Bill Anticipated in April 2022
In July 2021, three Democratic senators—Cory Booker, Ron Wyden, and Majority Leader Chuck Schumer—distributed a discussion draft of the Cannabis Administration and Opportunity Act, a major bill promising sweeping reforms of cannabis regulation at the federal level, notably descheduling the substance under the Controlled Substances Act. The senators’ offices invited public comment from stakeholders. On
FDA Releases Plan to Obtain Data Regarding Cannabis-Derived Product Usage & Safety
Earlier this month, the FDA released a seven-page plan to accelerate its research into the safety of cannabis-derived products. The plan follows two reports to Congress last year (which the Perkins Coie Cannabis Industry Group has previously written about here and here) on the safety and labeling of products containing cannabidiol (CBD) and a public statement from outgoing FDA leadership in early 2021 seeking better data for a better understanding of CBD safety. For those in the industry hoping that this latest FDA announcement is the agency’s long-awaited CBD enforcement guidance, the wait continues. Instead, the FDA recognizes that “the growth of the [cannabis-derived product] market continues to outpace the growth in the science and our understanding of the public health implications of these products.”
Before issuing new rulemaking and guidance, the FDA’s new data acceleration plan notes that the agency “needs a better understanding of the quality and safety systems that are currently in place across the overall supply chain from origin, manufacturing, and distribution to consumer usage” with regard to products derived from cannabis. According to the agency, the market for these products is “fragmented and dynamic” “with hundreds of small manufacturers selling products online,” and is “rife with potential quality and safety concerns.”
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