At Food Methods, we frequently receive requests to advise clients on the regulatory compliance aspects of food products containing CBD. Food Methods' knowledge of regulatory compliance matters for food businesses is generally focused on Oregon and federal regulations. However, because Oregon food products are frequently sold in other states, we try to keep abreast of all relevant regulations. We'll update this article as new information becomes available.
Hemp-derived cannabidiol, known as CBD, is one of the chemical compounds contained in hemp and is non-psychoactive.
There is a lot of interest, in Oregon, nation-wide, and globally, in CBD-containing products. There is also a lot of confusion about how it's regulated and what's legal and what is not.
Part of the confusion arose when, in 2018, the U.S. Farm Bill removed hemp (with a THC concentration of 0.3 percent or less) from the federal Controlled Substances Act. The Farm Bill also preserved the FDA's authority to regulate ingredients in food - this includes hemp extracts like CBD.
There is a lot of confusion about how CBD-containing food products are regulated and what's legal and what is not. Oregon allows the use of CBD as an ingredient in food products while the FDA prohibits it.
Food Methods uses the phrase "regulatory ambiguity" to describe the situation we are currently in with respect to using CBD as an ingredient in food products, particularly in Oregon. The reason for the ambiguity is because the Oregon Department of Agriculture (ODA) will issue a food processing license for manufactures that use CBD in their food products yet the FDA has not approved CBD as an ingredient in food. In addition, the FDA prohibits CBD products from being sold as dietary supplements.
Currently ODA advises people to contact their local ODA Food Safety Inspector if they are considering applying for a food safety license to manufacture products that contain CBD.
One area of the regulatory landscape that is not ambiguous pertains to claims made by companies about their CBD products. Both ODA and FDA make it illegal for companies to sell products that claim to prevent, diagnose, treat, or cure serious diseases. The FDA has been known to send warning letters to companies illegally selling CBD products that make such claims. In addition, some of these companies were in further violation because they were marketed as dietary supplements or because they involved the addition of CBD to food.
Even with the apparent legality in Oregon of food products containing CBD, neighboring states such as Washington and California have explicitly stated that such food products may not be legally sold there. The Washington State Department of Agriculture has stated that if the FDA approves food ingredient uses for hemp extracts like CBD, those uses would be allowed under state law.
Food Methods advises its clients to evaluate the costs of developing new CBD products given that they cannot be sold legally across state lines.
For these reasons, one may notice that the makers of some Oregon-made CBD food and beverage products say their products are "Available in Oregon Only".
The term “USDA Organic” is used to identify products produced by a process that has been certified by the US Department of Agriculture. In order for hemp and CBD to qualify for the USDA Organic certification, they must meet certain standards for growing, processing, packaging, storage, and shipping.
Food Methods advises its clients to be particularly careful about using CBD in products they intend to label as Organic. It's relatively common to find CBD products that claim to be made from hemp grown using "organic practices" and even CBD made from certified organic hemp. However, it's fairly challenging to find organic CBD products that bear the official USDA seal.
Food businesses should be diligent and verify any claims regarding organic certification of the actual products they intend to use as ingredients. Occasionally a CBD supplier will have an Organic certification for its crops and assume that the certification also applies to its CBD products and use the "USDA Organic" seal on the label (albeit inappropriately).
Food Methods advises its clients to carefully evaluate the costs of developing , launching, and promoting CBD food products given that they cannot be sold legally across state lines.
On multiple occasions, Food Methods has encountered reluctance on the part of investors to provide financing to businesses involved in any kind of cannabis operation. Their reasons range from ignorance of the differences between psychoactive and non-psychoactive cannabis components to the regulatory ambiguity surrounding CBD and the current interstate commerce limitations. One potential investor agreed to make an investment only if the business divested itself of the CBD line or spun it off to a separate company that would not benefit from the investment.
Foods containing CBD are currently receiving a lot of attention. Many food businesses are actively exploring how they might add such products to their line. Food Methods encourages its clients to explore all of the implications of offering CBD products beyond the immediate market opportunities. Business owners should decide if the costs of developing, launching, and promoting CBD food products are worth it given that they are limited by Oregon-only availability and how much interest potential investors will have in funding operations with CBD products in their lineup.
Last Updated: 08/27/2020