In Dallas, a yoga studio offers CBD-infused kombucha.
In Philadelphia, a decorated chef serves an elegant CBD-infused four-course meal to a nattily dressed group of fifty.
In Kentucky, the Peaches & CBD Cream burger competes in Lexington Burger Week.
A vendor at an arts festival in Colorado offers CBD Hot Dogs from his hot dog cart.
In Minnesota, a brewer offers a pint of craft beer that contains 13mg of CBD.
Bartenders drip CBD tincture into drinks. Dogs maul CBD-infused specialty treats. And CBD-infused foods are popping up (and in some cases being shut down) all over the country.
Cannabidiol, also known as CBD, is a non-intoxicating compound found in cannabis and hemp, said to have certain medicinal qualities. And while it may make the consumer feel good, legal uncertainty surrounding its sale have been known to cause headaches in entrepreneurs and lawyers.
The 2018 Farm Bill changed federal law to permit the broad cultivation of hemp (defined in the legislation as a cannabis plant with not more than 0.3% THC), as well as the transfer of hemp-derived products across state lines for commercial purposes, without restriction on the sale, transport, or possession of hemp-derived products. The Farm Bill also established a shared state-federal regulatory scheme for licensing the cultivation of hemp. And while the Farm Bill removes hemp-derived products from Schedule 1 under the Controlled Substances Act of 1970, it does not explicitly legalize CBD generally under federal law – it only creates exceptions to Schedule 1 status when the CBD is produced specifically in conformity with the Farm Bill, and with other federal and state regulations.
Taken in concert with state cannabis decriminalization efforts, the result is that domestically-produced CBD is generally far more available and easier to obtain in most states. Nonetheless, uncertainty abounds with regard to the legal status of CBD at both the state and federal level, and restaurants that wish to serve CBD-infused foods must carefully navigate to avoid crossing legal lines. Compounding the federal is-it-or-isn’t-it question are state regulations that continue to evolve, with rules and regulations filling the void of uncertainty in some states.
Meanwhile, the FDA is considering whether to classify CBD as a pharmaceutical ingredient (which would place significant restrictions on – or even flat-out prohibit – its use in food products) or permit its use as a nutritional supplement. The Federal Food, Drug, and Cosmetic Act already prohibits adding even approved drugs to food in interstate commerce, and has issued a statement proclaiming: “We are aware that there may be some products on the market that add CBD to a food or label CBD as a dietary supplement. Under federal law, it is currently illegal to market CBD this way.” Still, the FDA has looked the other way and has declined to comment on which instances of sale might prompt legal action.
The FDA recently completed a public comment period, and has announced that it plans to report on its progress towards issuing rules and regulations by end of summer / early fall 2019. Any insights into its regulatory plans will have wide-ranging impacts on CBD availability and business planning.
But despite the legal uncertainty, CBD’s rise in popularity is undeniable, with approximately 65 million consumers having tried it, according to Consumer Reports, for purposes ranging from anxiety reduction, sleep improvement, and as an anti-inflammatory.
Twelve states (and a thirteenth likely on the way in California) currently have laws explicitly permitting hemp-derived ingredients to be added to food. However, some states and municipalities – most recently and notably New York City – prohibit the sale of CBD edibles at the retail level, requiring restaurant operators and food producers to cease sales of what had been a flourishing market.
In some states, restaurant operators are taking advantage of the legal void, operating on the presumption that it’s ok until someone says it’s not ok. And in most states, lawmakers aren’t doing very much to clear up the legal situation – at least not comprehensively. Instead, laws and regulations are popping up sporadically. In Massachusetts, they’ve banned the use of CBD in alcoholic beverages, but the restaurant space is still vaguely unregulated. In California, licensed “consumption cafes” offer CBD in meals, but bartenders are now prohibited under the state’s legalization laws from serving CBD-infused cocktails, which they previously offered. Since recreational legalization, Seattle has cracked down on previously-operating CBD food businesses, now requiring a license (of a type that has not yet been created).
Through all of the fog, one point remains abundantly clear: food industry professionals who wish to cash in on the CBD craze need to navigate carefully and work with expert counsel to learn the federal, state, and municipal regulatory framework that applies to them in order to assess the risk/reward analysis that factors into their business plans.