Breakthrough: CBD is Almost Legal

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We have posted previously about the difficult circumstances facing consumer product manufacturers who want to follow the popular trend to include CBD in their products, ranging from food to cosmetics and beyond.  We are now pleased to report that some clarity had been added in the just-enacted 2018 U.S. Farm Bill, and the path to including CBD in consumer products is becoming much easier.

The big breakthrough in the 2018 Farm Bill is that it legalized hemp by changing troublesome language in the federal Controlled Substances Act (CSA) in two important ways. First, it removes hemp and any hemp derivate from the definition of “marihuana.” Hemp is defined as any part or derivative of the cannabis plant with 0.3% or less THC (dry weight). This change means that CBD derived from hemp will no longer be considered a controlled substance under the CSA. Second, the Farm Bill amends the definition of “Tetrahydrocannabinols” or THC to exclude the THC that is found in trace amounts in hemp.  This was important because THC is a psychoactive ingredient, and trace amounts that are too small to cause psychoactive effects might otherwise compel hemp and its products to be treated as controlled substances.

This change is exciting news for companies who are eager to follow the market trends of adding CBD to products.  Even though CBD remained technically illegal under federal law prior to the passage of the 2018 Farm Bill, sales of consumer products containing CBD already exceeded $350 million in 2017. That number is expected to jump significantly with the availability of legal CBD and the entry into the market of companies who were hesitant to incorporate CBD into their products because of the questionable legality.  Still, companies that are eager to incorporate CBD into their products should proceed with caution if they want to ensure that their products are legal under federal law.

While some might believe that all CBD is now legal, that is not correct.  Not all CBD will be legal, and manufacturers must take care to assure and document that the CBD they use comes from legal sources.   For one example, CBD derived from cannabis plants with more than 0.3% THC (dry weight) remains illegal under federal law.  CBD is only legal if it is: (1) derived from hemp, and (2) produced by a licensed grower in a manner consistent with the Farm Bill and associated federal and state regulations.

The Farm Bill invites states to submit a plan to the US Department of Agriculture that outlines how the state will monitor, license, and regulate the production of hemp. State departments of agriculture must consult with the state’s governor and chief law enforcement officer on the plan. If a state does not have a plan approved by the USDA, the USDA will have available a federal program for monitoring, licensing, and regulating hemp production. Hemp and its derivatives are only legal if grown under license pursuant to these state or federal programs.

It is clear that not all CBD has become legal overnight. The state and federal licensing and regulatory programs under which hemp can be legally grown will take months to establish.  Once such programs are established, businesses should engage in due diligence to ensure that the CBD they are purchasing is derived from hemp grown under license from state or federal programs, and they should maintain documents to be able to demonstrate the chain of production.

This welcome development is a major crack in the dam that prevented cannabis-derived products from entering consumer markets.  Watch for more soon, as other federal regulatory agencies such as the FDA consider controlled ways to permit CBD to be added to foods and pharmaceuticals.

CK&E attorneys will continue to monitor and stay up to date on the development of state and federal CBD ingredient and hemp cultivation programs, and are ready to help clients navigate complex and rapidly-changing federal and state regulatory schemes. If you have questions in this or other regulatory areas, contact CK&E at counsel@conklelaw.com or 310-998-9100.

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Sunscreen Ingredient Restrictions in Maui, Hawaii?

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Sunscreen manufacturers and distributors should take note:  Maui County in the state of Hawaii could become the first county in the United States to ban the sale and use of sunscreen products containing oxybenzone and octinoxate, two active ingredients approved by the U.S. Food and Drug Administration (FDA) for use in sunscreens.

In November, a Maui Hawaii County Council committee introduced and recommended for approval a bill for an ordinance that would prohibit the sale and use of sunscreen containing the ingredients oxybenzone and octinoxate. These ingredients are commonly used in commercial chemical sunscreens as protection against ultraviolet (UV) light radiation.  The county-level move came after Senate Bill 1150 – introduced in 2017 by Hawaii Senator Will Espero to ban the use and application of sunscreens containing oxybenzone throughout the state of Hawaii – stalled at the end of the legislative session.

The FDA currently approves of only 16 active ingredients for use in over-the-counter (OTC) sunscreens, generally recognizing them as safe and effective.  Among the ingredients are oxybenzone and octinoxate, which are commonly found in commercial sunscreen products, including from major sunscreen brands such as L’Oreal, Neutrogena and Supergoop.  The European Union already imposes strict limits on the use of oxybenzone in sunscreen products as well as warning requirements.

The Maui County proposal was prompted by environmental concerns and intended to promote the health and welfare of Maui’s coral reefs and marine life. The bill’s supporters claim that oxybenzone and octinoxate have a significant impact on the marine environment, noting that both ingredients have been detected in the ocean surrounding Maui at levels that well exceed the toxicity range for coral reefs.  Opponents of the ban, on the other hand, contend that the ingredients are safe for use, as they have been approved for use by the FDA.

The proposal to ban sunscreen products containing oxybenzone and oxtinoxate, other than prescription products, is now before the full Maui County Council. If approved, manufacturers, retailers and distributors of sunscreen products containing oxybenzone and oxtinoxate would have a year to ensure that their products no longer contain the banned ingredients. Businesses or persons found in violation of the law would be subject to civil penalties and administrative enforcement procedures. As of now, the bill does not contain a private right of action to allow consumers to bring actions for violations.  If passed, Maui’s outright ban could still face enforcement and legal challenges – including state preemption and federal Commerce Clause challenges.

While this is a unique development, local efforts to protect against health and environmental concerns are nothing new, but they do not always remain confined to their original purpose.  For example, California’s Safe Drinking Water and Toxic Enforcement Act of 1986, commonly known as Proposition 65, was originally passed to protect the state’s drinking water sources from being contaminated with chemicals known to cause cancer or reproductive harm.  However, Proposition 65 does not act to ban the use of any chemicals; instead, it imposes warning requirements prior to consumer exposure to certain chemicals known to the state to cause cancer or reproductive harm.  The 2012 listing of benzophenone to the state’s list of regulated chemicals has already caused many sunscreen manufacturers using octocrylene, another FDA-approved active ingredient that may contain small amounts of benzophenone, to reformulate or use a more purified form of the ingredient.

Conkle, Kremer & Engel has many years of experience representing clients in the beauty and skin care industry address challenging regulatory compliance issues.  CK&E attorneys help clients stay out of legal crosshairs by working with them to ensure their products continue to meet all legal requirements, and helping them plan for foreseeable changes in the law.

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