On September 10, 2019, the Federal Trade Commission (FTC) sent warning letters to three companies that sold cannabidiol (CBD) products marketed with misleading claims that they could treat serious diseases. The FTC aims to “protect consumers from unfair and deceptive practices in the marketplace,” and accordingly has the responsibility of jointly overseeing marketing and advertising of products that fall under the U.S. Food & Drug Administration’s control.  (In 2019, the FDA issued four warning letters, and publicly disclosed the names of the companies in question. We previously discussed these letters in an earlier article.) According to its press release, the FTC warned three companies that it is illegal to market cures or preventative features of a product without supporting “competent and reliable scientific evidence.” The FTC has not publicly identified the recipients of the letters.
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Following last year’s passage of the 2018 Farm Bill, the National Credit Union Administration (NCUA) issued a regulatory update in August of 2019 to federally insured credit unions.  Citing growth in hemp-related commerce, the NCUA emphasized the need for credit unions to understand the gamut of regulation across jurisdictions in order to lend lawfully to hemp-related businesses.  Within its memorandum to members, the NCUA provided: 1) a summary of repercussions generated by the 2018 Farm Bill, 2) specific compliance program concerns with regard to the Bank Secrecy Act (BSA) and Anti-Money Laundering Act (AML), and 3) considerations under existing NCUA regulations for lending.


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CBD is “thriving” in the current regulatory environment, but is it doing so illegally?

As former U.S. Food and Drug Administration (FDA) Commissioner Scott Gottlieb opined last  week, “the CBD craze is getting out of hand. The FDA needs to act.”  Since the passage of the Farm Bill in December of 2018, there has been a marked uptick in interest in the cannabidiol (CBD) space from businesses and users alike.  Congress explicitly preserved the FDA’s authority to regulate CBD-containing products to ensure that they are safe and that their claims are valid.  Current federal law expressly allows for the distribution of hemp-derived CBD products that contain 0.3% tetrahydrocannabidiol (THC) or less to be sold, with certain caveats.  The FDA has provided clarity that hulled hemp seed, hemp protein powder, and hemp seed oil can be legally used in foods.  Other CBD products, however, are still subject to various state law regulations as well as the U.S. Food, Drug, and Cosmetic Act (FD&C Act), which requires FDA pre-market approval for drug products.  Currently, the FDA treats CBD products aimed at human or animal consumption as drugs and therefore they cannot be distributed without prior approval or a rulemaking exception (more on this below).  The following is a brief update on recent developments within the federal regulatory regime of CBD products. 
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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.
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