Episode 96 – Everything Regulatory in Hemp and CBD



Joe: On this episode of the "CPG & CBD University Podcast," catching you up on all the latest regulatory news and headlines, and signals from the FDA in CBD regulations, the latest around the U.S., and more warnings, what it all means on this episode of the "CPG & CBD University Podcast," and it starts right now.

I'm Joe Agostinelli, host of the "CPG & CBD University Podcast." And if you are a returning listener, we welcome you back to our podcast. If you are a new listener, we are glad you found us on your podcast platform of choice. Don't forget to hit that subscribe button wherever you get your podcast and catch full video episodes on YouTube. And speaking on full video episodes, we're joined via Zoom on this episode by industry advocate and attorney, Rod Kight. He's back on our podcast with all the latest on the regulatory front and, Rod, at this rate, we may have to have you more often because there's a lot to catch up on.

Rod: Yeah. There's always a lot to catch up on, particularly on the regulatory front. So I'm happy to be here, Joe. Thanks for having me.

Joe: And on our last episode that we had you on, we talked exclusively about delta-8, all the ins and outs of delta-8, and some of the regulations and legalities we're seeing around delta-8. So let's start in that arena, the FDA and CDC recently issues warnings on delta-8 THC. Why was that?

Rod: Yeah. We don't know exactly why, we can infer a couple of things. First of all, we can infer that these agencies realize that delta-8 THC is the new hot thing in the hemp and cannabis industry. But a lot of healthcare professionals and a lot of the public may not be aware of delta-8 THC, at least not how it's distinguished from the other cannabinoids. Another thing we can infer is that there was possibly some coordination, and that's because the two notices that I'll go through in a second were two days apart. So the CDC issued a notice on September 14th and the FDA issued a notice on September 16th. So I'll quickly go through them because I think it's important to know where these agencies are coming from. So, on the 16th of September, the FDA issued a document called five things you should know about Delta-8 THC. It says first that delta-8 THC products have not been evaluated or approved by the FDA for their safe use and may be marketed in a way that endangers public health.

Secondly, the FDA says that it has received reports of adverse events related to products containing delta-8 THC, that actually plays right into what the CDC's paper about, which I'll discuss in a moment. Third, it says that delta-8 THC has psychoactive and intoxicating effects. Four, delta-8 THC products often involve the use of potentially harmful chemicals to create the concentrations of delta-8 THC that are claimed on the market. And five, delta-8 THC products should be kept out of reach of children and pets, almost circle back around and discuss my thoughts on these in a moment. But I wanna flip over to the CDC's paper published two days before the FDA's called increases in availability of cannabis products containing delta-8 THC and reported cases of adverse events.

This paper was primarily directed to public health departments, healthcare professionals, you know, first care responders, poison control centers, and, in general, of those types of health professionals that might be seeing people who come in and have calls, or whatnot who have ingested delta-8 THC and are reporting some sort of an adverse event. You know, and looking at these documents, first of all, I think it's important that these agencies stay on top of it because frankly, and, in particular, FDA, it has not stayed on top and has not led the charge in regulating hemp products and hemp cannabinoids the way it should. And that's something you and I have talked about a lot of times. But I think, again, the primary thrust is to educate the public and healthcare professionals. As always in a relatively new industry, there's bad actors. Those bad actors are, you know, there are products out there that do contain some residual solvents that are used to convert CBD to delta-8 as we've discussed in prior episodes. And so there may be some contaminants in those products.

Sometimes they're mislabeled and consumers may ingest one thinking that it's CBD, and it ends up being delta-8 THC. Delta-8 THC generally is well-tolerated by humans, there are some studies, but it does have that euphoric intoxicating effect, which can be very discombobulating if you're not expecting to have it. And, in fact, most of the CDC reports have to do with that. People who've ingested delta-8 THC and they didn't know it. And so they felt some paranoia and some concern or they ingested too much. That's just been an issue with intoxicating edibles from time immemorial.

And also, there are some definite concerns about children getting hold of these products. And so I think the thrust of it is to try to put this on the public awareness and mostly about the way these products are marketed, the way they're labeled, and the way that people should go about handling them and consuming them.

Joe: And we said these warnings came in September, back in June though, the Hemp Industries Association issued a statement of support for all parts of the hemp plant, which includes delta-8 THC. Correct?

Rod: That's exactly right. Yeah. I was privileged to co-write that with Attorney Philip Snow in my office for the HIA, which is the client and has been the legacy supporter of hemp in the United States. It's sued the DEA over encroaches into hemp by the DEA several times. In fact, it's embroiled in a lawsuit right now. But in that position statement, you know, we're having some conflicts among the cannabis industry and even within the hemp industry about the proper place for D-8, for delta-8 THC, and the Hemp Industries Associations wanna make clear that it actually supports all of the cannabinoids that the 2018 Farm Bill did legalize the entire hemp plant and all of the cannabinoids compounds, extracts, derivatives, isomers, and so on and so forth with no more than 0.3% delta-9 THC. So I think it's an important document. And again, I'm very happy to have been a part of that.

Joe: Now moving on from delta-8 to just CBD, recently, the acting FDA chief called CBD regulations a stalemate. Safe to say this is dragging into 2022?

Rod: It's dragging into 2022. I can't even imagine how it would be resolved this year. You know, we're in almost October now. So yeah, this is a stalemate. The FDA has not shown leadership on this issue. I testified before the FDA on CBD several years ago, and there was a lot of momentum and enthusiasm about the FDA getting in and establishing regulations for CBD and how these things are regulated and it just hasn't done so. And so what's happened as we've discussed in prior episodes, the states have taken the lead and filled that vacuum. And so we have a patchwork of regulations across the country with back to CBD products.

Joe: And speaking of that patchwork of regulations, a couple of weeks ago, about a month ago, probably now, so movement in California on a long-debated bill to open the state to CBD food and drinks.

Rod: Yeah. That's exact... AB-45. This was a very controversial and comprehensive bill, did a lot of good, did some bad as well. It was passed by the full California legislature. It's now on Gavin Newsom's desk. Gavin Newsom has a lot of problems right now that are unrelated to cannabis and hemp and everything else. It has not been signed as of the date that you and I are talking today, but it's likely to be signed. It does a lot of good in terms of California. California has taken the FDA stance that CBD may not be used as a dietary supplement or a food product and has actually been pretty aggressive in prohibiting those things. And so, you know, signing this bill will actually reverse that, it will be expressly lawful to market those products in California. So we're opening up in a big and official way, these products are certainly available there now. But, you know, the seventh-largest economy in the world to CBD products of all sorts that also provides labeling requirements and purity, all sorts of good things that we need for the industry.

On the downside, at least temporarily, it is prohibiting inhalable hemp products from hemp flower to vaped hemp and CBD products. And that's caused a lot of controversy. There's been some back and forth between the hemp industry and the marijuana industry over what amounts to a tough war. So we'll see how the bill plays out. I think there's a good chance that it will be signed probably pretty soon. But it also may be challenged and we may see some modifications of it in the years to come.

Joe: And something else that just crossed the wires not too long ago, that lack of federal regulation according to industry associations also weighing on companies in the space. And is this gonna become even more of survival of the fittest?

Rod: You know, survival of the fittest has been the name of the game in the hemp industry, for sure. So I think that's gonna continue. You know in, in one way, a lot of the multinational publicly traded companies have been kept out of the CBD and hemp space because of this patchwork of regulations because some of the regulations are gray. Some of the... Sorry.

Joe: We're good. The dog's joining in on the podcast. We're good, keep going.

Rod: Right. So I'll go back on that. So, sorry, someone's at the door. When you're working from your house, which is great, sometimes this happens. But yeah, so I think it's been survival of the fittest for hemp companies all along. And in a good way, a lot of the smaller companies, a lot of the privately held companies have been able to compete in a big way because the multinationals have been kept out of the space by virtue of the fact that there are competing regulations, there are conflicting regulations, there are gray areas, and it's just really difficult to navigate a big ship like a multinational that has to report to its public investors and owners and SEC and everyone else, whereas a smaller company is more nimble and typically can navigate that. I think we're just gonna continue to see that, although we are seeing the bigger companies start to get involved in the space. We are starting to see mergers and acquisitions of smaller company. So yeah, survival of the fittest is the name of the game right now, and I think it's gonna continue to be that way.

Joe: And closing out, the regulatory front for 2021, obviously, there's a lot of things going on in D.C. outside of the cannabis world. Do we expect anything in these last few months we should be keeping an eye on, or is it gonna be fairly quiet maybe till we get to the new year?

Rod: Yeah. You know, there's all kinds of concerns with budgets and debt ceilings and everything else right now. So I don't think we're gonna see anything happen in the 2021 on the hemp, cannabis, CBD, delta-8 front from Congress. Maybe 2022, certainly we need some movement from Congress in a lot of ways, but I think for the rest of 2021, we're probably, you know, not in store for anything major to happen.

Joe: Well, then next time we have you on, as hard as this is, leave to mention, we're gonna have to go through the 2022 predictions like we do it at the end of every year for the next year predictions with you. I can't believe we're at that episode already, but that's gonna be the next one.

Rod: Time flies when you're having fun, right?

Joe: Yep. Well, Rod, as always, thank you for taking the time to join us on the podcast. We always enjoy our discussions and catching everybody up on the latest regulatory news. And as I mentioned, I look forward to having you back as we look ahead to 2022 at the end of the year.

Rod: Yeah, absolutely. Always glad to be back and ask me to be on anytime, I'll be here. Thanks, Joe. Appreciate you.

Joe: Right. Perfect. Industry advocate and attorney, Rod Kight, my guest on this episode of the "CPG & CBD University Podcast." Stay on top of all the latest news by visiting his website, cannabusiness.law. That's cannabusiness.law, all the latest blogs, great information there to stay on top of the regulatory news in between his episode appearances. And hit that subscribe button wherever you get your podcast to subscribe to the "CPG & CBD University Podcast," and get notifications when new episodes are released. Don't forget full video episodes on the YouTube channel. That's the Global Widget YouTube channel and the YouTube channels of our brands. I'm Joe Agostinelli, host of the "CPG & CBD University Podcast," thanks for tuning in.

These statements have not been evaluated by the Food and Drug Administration. CBD products are not intended to treat, cure, or prevent any disease or condition. Always consult with your personal physician about CBD and using CBD products. CBD should never be used by anyone under the age of 18. This podcast is not intended to provide legal advice regarding the legal status of CBD and CBD products.