On May 22, Central California District Court Judge Virginia A. Phillips granted CBD retailer CV Sciences, Inc.’s (CV Sciences) request to stay the case of Colette et al. v. CV Sciences Inc., Case No. 2:19-cv-10227 (C.D. Cal), until the U.S. Food and drug Administration (FDA) completes its rule making regarding the marketing and labeling of CBD ingestible products.  This marks the second time this year that a federal court has paused class action litigation over alleged mis-branding of products containing CBD.

The complaint alleges that certain of CV Sciences’ CBD products are illegal under the Federal Food, Drug, and Cosmetic Act because they are mislabeled as dietary supplements or contain the illegal dietary ingredient CBD.  Plaintiffs further claim that if they had known that CBD products are “not legally sold in the United States,” they would not have purchased them.

Judge Phillips stayed the case pursuant to the primary jurisdiction doctrine and adopted the analysis from a similar class action suit out of the Southern District of Florida, Snyder v. Green Roads of Fla. LLC, 2020 WL 42239 (S.D. Fla. Jan. 3, 2020).  As we have written about before, the Snyder court ruled that where a case implicates a federal agency’s expertise with a regulated product, and where federal guidance or rule making is forthcoming, courts can stay the case to take advantage of the agency’s expertise and promote uniformity among the courts.  Accordingly, because both FDA and the State of Florida were exercising regulatory authority over the labeling of CBD products, the Snyder court halted a putative class action while FDA completes its rule making.

In further support of the decision, Judge Phillips noted that the number of CBD class actions currently pending in the federal district courts (including at least four in the Central and Northern Districts of California alone) makes clear the danger of inconsistent adjudications.  She also distinguished the case from situations where it was unlikely that the relevant agency would be issuing guidance in the short term, finding that FDA has already conducted a public hearing, has instituted an agency task force on CBD regulation, and “is working feverishly” to issue rule making.

The court’s decision further solidifies the primary jurisdiction doctrine as a tool for cannabis companies to pause litigation pending federal rule making.  However, as we have cautioned before, this issue is far from settled, and cannabis companies facing mislabeling class actions should be fully prepared for the scenario that courts choose to proceed with litigation.

FDA and FTC Joint Warning Letters Target Amazon Affiliates Making False COVID-19 ClaimsFDA and FTC Joint Warning Letters Target Amazon Affiliates Making False COVID-19 ClaimsEarlier this week, federal regulators continued their efforts to combat the spread of products featuring allegedly false and misleading claims that products can diagnose, treat, cure, or prevent COVID-19.  In warning letters issued to CBD Gaze, Alternavita, Musthavemom.com, and Careful Cents LLC, the agencies identify the respective recipients as participants in the Amazon Affiliate program.  Amazon Affiliates are marketers who earn commissions by promoting products sold on Amazon.  The letters state that the products at issue, which include essential oils, grapefruit seed extracts, cod liver oil, and others, feature false treatment and prevention claims such as the following:

  • CBD Gaze:  “Find the best CBD Oil to help fight Coronavirus.”
  • Alternavita:  “4 Proven Ways To Protect Yourself Against Coronavirus,” you represent that “Everyone is concerned about Coronavirus and looking for ways to protect themselves,” and then state the following:

“Grapefruit Seed Extract If you want a little extra daily protection GSE is a safe antibiotic . . . [Amazon associate link].”

  • Musthavemom.com:  “NATURAL REMEDIES FOR CORONAVIRUS. . .There are plenty of things you can do to boost your immune system and fight off any virus including coronavirus. Here are a few!”  … “2. Vitamin D . . . This important vitamin plays a crucial role in immune health. Being deficient in Vitamin D can increase your risk of infection. I recommend this brand of Vitamin D [Amazon associates link] and starting at a minimum dose of 5,000 IU.” [from your website https://musthavemom.com/coronavirus-prevention-treatment-plan/]
  • Careful Cents LLC:  “How to Boost Your Immune System Naturally With Essential Oils to Fight Coronavirus” you state: “Can you use essential oils to boost your immune system and fight coronavirus? Yes! Essential oils are one of the best tools to strengthen your immune system naturally . . .”

The letters state that the products are unapproved new drugs and misbranded pursuant to the Food Drug and Cosmetic Act.  Causing the introduction or delivery for introduction of these products into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d).  The letters also state that “it is unlawful under the FTC Act, 15 U.S.C. 41 et seq., to advertise that a product can prevent, treat, or cure human disease unless you possess competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made.  For COVID-19, no such study is currently known to exist for the product identified above.  Thus, any coronavirus-related prevention or treatment claims regarding such product are not supported by competent and reliable scientific evidence.”

What’s the lesson?  The difference between these letters and the warning letters that FDA and the FTC issued earlier this year is that these are targeted not to the company making the product or even the retail platform on which they are sold.  They were sent to the middleman marketer, who likely does not produce or possess the product, but who is promoting and profiting from its sale.  This is consistent with the FTC’s letters to product influencers in other marketing contexts but is a departure from FDA’s typical enforcement approach.  Although we have seen FDA pursue retailers (particularly online ones), FDA has not made pursuit of marketing affiliates a priority.  Clearly, regulators want affiliate marketers (Amazon or otherwise) to understand that they are not immune from enforcement if they are making aggressive or unsubstantiated health claims.

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In the midst of continued enforcement regarding coronavirus marketing, FDA sent a warning letter to NeuroXPF concerning advertising for its CBD products alleging that they can boost immune systems to help consumers avoid contracting the virus. Citing the need to take “urgent measures to protect consumers” in the midst of the coronavirus outbreak, FDA advised NeuroXPF to remove claims indicating that the company’s products mitigate, prevent, treat, diagnose, or cure COVID-19.

NeuroXPF’s website included claims that consumers should “take CBD and take advantage of its potential to help prepare your body to fight a coronavirus infection.” According to the company, taking CBD “right now” “can help keep your immune system at the stop [sic] of its game.” NeuroXPF’s products had not, however, undergone the FDA’s new drug approval process.

Suggesting that NeuroXPF products can mitigate, prevent, treat, diagnose, or cure any disease, including coronavirus, without having undergone FDA new drug approval, makes the products unapproved drugs in violation of the FDCA, per the FDA.  NeuroXPF has 48 hours to email the agency detailing the steps the company has taken to correct any violations.

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As we’ve written about on our sister blog, Ad Law Access, federal and state regulators have been active in pursuing purveyors of scam products and price gougers.  For other helpful information during this pandemic, visit our COVID-19 Resource Center and our Advertising and Privacy Law Resource Center.

FDA CBD Status ReportEarlier this week, FDA sent its status report regarding a potential CBD enforcement discretion policy to Congress.  As we wrote here, FDA was required to issue the report per the Joint Explanatory Statement attached to the 2020 Ag Appropriations Bill.  Here is our analysis and report highlights:

  • Overall Status: The report is consistent with FDA’s public statements and enforcement regarding CBD. FDA acknowledges the vast proliferation of CBD but remains concerned about safety risks.  These risks include mislabeling, potential contamination with THC, pesticides, and heavy metals.  More data is needed.  There are no surprises relative to the agency’s legal positions.
  • Dietary Supplements: FDA is continuing to evaluate a potential dietary supplement pathway.  The agency has been actively working to identify and review safety data.  Concerns remain around continuous use, particularly in the absence of medical supervision.  To help address this, FDA is asking for safety data on individual products.  Given the proprietary nature of this data, the agency is working on a process to collect this information while still protecting trade secrets or confidential information.
  • Foods: FDA reiterates its position that it is not lawful to add CBD to human or animal food based on currently-available safety data.  In the November 2019 warning letters, the agency discussed its position that CBD is not generally recognized as safe for foods.  The agency encourages interested parties to submit relevant safety data.
  • Cosmetics: FDA is aware of limited safety data regarding CBD in topical form.  FDA is working to address data gaps by conducting its own research.  More on this below.
  • Drugs: The drug pathway to market is clear. FDA reiterates the existing approval processes.
  • Vape Products: FDA remains concerned about vaping and toxicity.  Also, vape products that meet the definition of tobacco product will be regulated as tobacco products.  CBD-containing products that are intended for use as a drug will be regulated as drugs.  More safety data is needed.

New Steps

FDA is taking the following steps to evaluate potential lawful pathways for CBD.

  • Safety Information Collection:  FDA is reopening the docket established as part of the May 2019 public meeting.  This will provide a means of allowing stakeholders to submit information.  The docket will remain open indefinitely.
  • Engagement With Government Partners:  FDA has had conversations with many federal, state, local, and international partners.  Interestingly, the listed international parties did not include the UK, which recently announced a 70 mg/day threshold for CBD in novel foods.
  • Full and Broad Spectrum:  FDA acknowledges that “full spectrum” and “broad spectrum” are undefined.  The agency is seeking information as to how these extracts are derived, their content, and how they compare to CBD isolate.
  • Research:  FDA is generating its own data.  This includes a rat study on the effects of CBD exposure during pregnancy.  The agency also initiated a research study in partnership with the University of Mississippi to evaluate CBD and THC levels in a sample of cosmetic products (about 100 products, including some positive controls), to assess sensitization of THC and CBD topically, and dermal penetration.
  • Product Sampling:  Congress directed FDA to perform a sampling study of the current CBD marketplace.  The study is intended to test the extent to which products are mislabeled or adulterated.  FDA is developing an action plan for sampling.

Stakeholders will appreciate hearing of the new steps but, overall, are likely to find the report frustrating.  It fulfills the agency’s reporting obligation but doesn’t provide the clarity for which Congress and industry have been clamoring.

Nevertheless, it is vital that interested parties continue to engage with FDA.  Even if Congress steps in and passes legislation that exempts CBD from the drug preclusion, FDA remains the primary regulator.  As a science-based public health agency, they will need to be convinced that CBD is safe in its various forms and dosages in order to provide the clarity that the market demands.

The push and pull on CBD regulation continues.

Earlier this week, Minnesota Representative Colin Peterson introduced a H.R. 5587, which would regulate CBD as a dietary supplement.  Specifically, the bill would amend the federal Food, Drug, and Cosmetic Act to add “other than hemp-derived cannabidiol” after the term “article” in Section 21 U.S.C. 321 (ff)(3)(B).  If passed, the statute would effectively read as follows:

“The term dietary supplement … does … not include an article, other than hemp-derived cannabidiol, that is approved as a new drug…..”

The bill proposes adding similar language to the definition of “Prohibited Act.”

In addition, the bill would require USDA to conduct a study on the market and regulatory barriers for producers operating under the domestic hemp production program.

What About the Agriculture Appropriations Bill? 

While there has been considerable pressure on FDA to clarify a non-drug pathway for CBD, H.R. 5587 appears to get ahead of FDA’s mandate per the 2020 Agriculture Appropriations bill, which was passed in December 2019.

The language in the Ag Appropriations Committee Report currently allocates $2 million to the FDA for “research, policy evaluation, market surveillance, and issuance of an enforcement discretion policy” with respect to hemp-derived CBD products. Specifically, the joint explanatory statement directs FDA to use data to develop and implement an enforcement discretion policy for products containing hemp-derived CBD.  The bill also requires FDA to report on its progress.  Key dates are as follows:

Action Item Due Date
FDA due to report to Congress on progress in crafting an enforcement discretion policy February 20, 2020
FDA report to Congress on sampling study of adulterated or misbranded nature of currently-marketed CBD products June 20, 2020

As we discussed here, FDA has taken the position that CBD is not generally recognized as safe and may introduce risks relating to liver toxicity, male reproductive health, and potential drug interactions.

Meanwhile, Back At The FDA…..

Earlier this week, FDA Principal Deputy Commissioner Amy Abernethy told Politico that FDA is grappling with data collection as it determines what to do about CBD and may consider generating its own data to fill existing gaps.

FDA officials testified this week at the House Energy and Commerce Committee in a hearing titled “Cannabis Policy In The New Decade.”  Stay tuned here for further developments.

In an important decision for cannabis companies facing class action litigation over the alleged misbranding of products containing CBD, a Southern District of Florida court recently held that because the FDA is exercising regulatory authority over the labeling of CBD products, litigation must be halted until the FDA completes its rulemaking. Thus, the court stayed the case of Snyder v. Green Roads of Florida, Case No. 0:19-cv-62342-UU (S.D. Fla.) pursuant to the primary jurisdiction doctrine.

Plaintiffs brought a class action complaint against Green Roads, a Deerfield Beach, Florida-based business, in September 2019, asserting that the CBD content listed on the product label and packaging of a 250 mg CBD Oil bottle did not match Green Roads’ laboratory certificates of analysis of the CBD content.  The plaintiffs claimed that they relied on Green Roads’ labels when purchasing the products and were overcharged because each product contained less CBD than indicated.

As we’ve chronicled here and here, in addition to Green Roads, approximately ten (10) other CBD companies were hit with similar deceptive labeling class action lawsuits in late 2019.  Thus, Judge Ursula Ungaro’s opinion, and her analysis of the primary jurisdiction doctrine as a means of staying litigation pending federal rulemaking, could prove instructive to other defendants.

In its motion to dismiss, Green Roads contended that district courts have inherent discretionary power to stay cases and the Snyder case represented a textbook example of an appropriate instance. Green Roads argued that the primary jurisdiction doctrine should apply where a case implicates a federal agency’s expertise with a regulated product, and that the doctrine enables a court to take advantage of an agency’s special expertise while promoting uniformity.  Here, because the State of Florida and the FDA are poised to act on CBD regulations, Green Roads asserted that the agency’s forthcoming guidance should be dispositive.

Although the court denied Green Roads’ motion to dismiss plaintiffs’ claims outright in its decision dated January 3, 2020, the case now will be paused pending federal rulemaking.  The court reasoned that any analysis of the facts associated with the case would “benefit greatly” from waiting until federal regulations of CBD products were enacted, noting that there is a need for “consistent guidance” relating to labeling standards for CBD products.

Moreover, the court found that federal level rulemaking efforts are active and ongoing – although the court recognized that “regulatory delays” could develop.  In sum, the court concluded that current FDA regulations are insufficient to clearly delineate whether CBD ingestibles are food supplements, nutrients or additives and what labeling standards are applicable to each classification.

“ . . . [T]he rulemaking processes at the federal level is active,” the judge said. “Given that this case is in the nature of public interest litigation, the delay occasioned by a stay under the current circumstances, would not prejudice plaintiffs to any significant degree.”

It remains to be seen whether other CBD-company defendants will seek to employ the primary jurisdiction doctrine in attempting to stay their federal cases, or whether courts in other jurisdictions will follow Judge Ungaro’s opinion.  Three federal cases alleging that various CBD companies overstated the quantity of the CBD in their products have been filed in the Southern District of Florida (in addition to the Green Roads case) and Judge Ungaro’s opinion would carry weight in those cases.  However, other similar class actions have been filed in Massachusetts, California federal courts, the Eastern District of New York and in California state courts.  Most likely, it is too early to predict how courts in those jurisdictions will rule on motions to dismiss – and whether the primary jurisdiction doctrine will be invoked – despite the promising ruling from Judge Ungaro’s court.

Last week, FDA Principal Deputy Commissioner and Acting Chief Information Officer Dr. Amy Abernethy released a series of tweets indicating that the agency is “expediting” its work towards addressing the confusion and uncertainty surrounding the regulation of hemp-derived CBD. Dr. Abernethy also stated that FDA plans to report on the agency’s progress around the end of summer or early fall.

As we have discussed before, FDA has been receiving pressure from Senator Ron Wyden (D-OR), among other members of Congress, to clarify a regulatory pathway for CBD.  Senator Wyden’s position focuses  on the economic opportunity associated with CBD, stating that “FDA’s indication that it may take three to five years to issue a final regulation authorizing the lawful use of hemp-derived CBD in foods and dietary supplements [is] fully unacceptable.”

Senate Majority Leader Mitch McConnell (R-KY) has also exerted pressure on FDA to move quickly. “Congress’s intent was clear with the passage of the Farm Bill that these products should be legal, and our farmers, producers and manufacturers need clarity as well as a workable pathway forward regarding the agency’s enforcement,” McConnell said in a statement.

On the House side, the House Appropriations Committee passed a measure that allocates $100,000 to FDA to evaluate and set a safe level for conventional foods and dietary supplements containing CBD.

And finally, today is the deadline to submit comments to FDA’s public docket on CBD.  With over 3800 comments received thus far and stakeholder pressure mounting, one thing appears certain:  FDA is facing a hot – and busy – rest of the summer.

On June 25, 2019, Senator Ron Wyden (D-OR) issued a letter urging Department of Health and Human Services (HHS) Secretary Alex Azar and Food and Drug Administration (FDA) Acting Commissioner Ned Sharpless to take action by addressing the confusion and uncertainty surrounding the regulation of hemp-derived CBD. Specifically, Senator Wyden requested that FDA issue guidance announcing a formal enforcement discretion policy by August 1, 2019 and, pending publication of a permanent final rule, issue an interim final rule that ensures a regulatory pathway for lawful use of CBD as a food additive and as a dietary ingredient in dietary supplements.

This is not the first time that Senator Wyden has urged FDA to move quickly on clarifying a non-drug pathway for CBD. Earlier this year, he co-authored a letter with fellow Democratic Oregon Senator Merkley that urged then-Commissioner Scott Gottlieb to “immediately begin updating regulations for hemp-derived CBD and other hemp-derived cannabinoids, and give U.S. producers more flexibility in the production, consumption, and sale of hemp products.”

Senator Wyden’s position focuses to a greater degree on the economic opportunity associated with CBD than the public health focus discussed in a recent House Appropriations Committee report.  The Committee, charged with review of funding for FDA, emphasized public health and commitment to science, as follows:

“The Committee recognizes the FDA is considering a public regulatory process to evaluate the appropriateness, and possible parameters, of a regulatory pathway that would permit CBD in certain foods and dietary supplements. The Committee expects the FDA to assert its commitment to identifying lawful federal regulatory pathways for CBD foods and dietary supplements if such pathways are consistent with protection of the public health. . . . The Committee also expects the FDA to preserve the integrity of its drug development and approval processes, which ensures that products marketed for drug uses have undergone a rigorous scientific validation process demonstrating quality, safety and efficacy.”

Although Senator Wyden stated that he “fully embrace[s] FDA’s commitment to the promotion and protection of public health and understand[s] that, with respect to hemp-derived CBD, the agency will be examining a number of health and safety considerations,” he made clear that “FDA’s indication that it may take three to five years to issue a final regulation authorizing the lawful use of hemp-derived CBD in foods and dietary supplements [is] fully unacceptable.”

Just a few days prior to publication of Sen. Wyden’s letter, FDA announced that it was extending the public comment period regarding CBD issues to July 16 and issued two new communications (here and here) reiterating the agency’s positions on CBD and highlighting areas of inquiry relative to a possible non-drug pathway.  These include the following:

  • How much CBD is safe to consume in a day? How does it vary depending on what form it’s taken?
  • Are there drug interactions that need to be monitored?
  • What are the impacts to special populations, like children, the elderly, and pregnant or lactating women?
  • What are the risks of long-term exposure?

In this same announcement, FDA emphasized that it is working in an “efficient and science-based” way and expressed a commitment to preserve incentives for drug-level research.

While FDA’s course of action regarding CBD is uncertain, it seems clear that many in Congress will maintain pressure on the agency to provide the certainty that industry seeks to support the burgeoning hemp industry.

Earlier this week, the House Appropriations Committee approved the fiscal year 2020 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies bill by a vote of 29 to 21. The committee report accompanying the bill included notable language on CBD.  Specifically, it expressed concern regarding potential safety issues such as drug interactions, somnolence, liver toxicity, the presence of THC or other compounds, and aggressive health benefit claims.  These were among the many issues discussed at FDA’s May 31 public meeting.

The report urges the agency to focus on public health and, should there be a non-drug pathway for CBD, to preserve the incentives to invest in drug-level research. It states in part:

The Committee recognizes the FDA is considering a public regulatory process to evaluate the appropriateness, and possible parameters, of a regulatory pathway that would permit CBD in certain foods and dietary supplements. The Committee expects the FDA to assert its commitment to identifying lawful federal regulatory pathways for CBD foods and dietary supplements if such pathways are consistent with protection of the public health. Such pathways may include necessary public health and safety parameters that will protect the public health, such as labeling requirements and limits on CBD or other cannabis-derived ingredients in products, based upon anticipated total exposure levels. The Committee also expects the FDA to preserve the integrity of its drug development and approval processes, which ensures that products marketed for drug uses have undergone a rigorous scientific validation process demonstrating quality, safety and efficacy. It is also imperative that any FDA regulation of foods and dietary supplements containing CBD or other cannabis-derived ingredients preserve incentives to invest in robust clinical study of cannabis, so its therapeutic value can be more fully understood.

This position from the House Appropriations Committee stands in contrast to other Congressional pressure on FDA regarding CBD. Specifically in a January 2019 letter, Sens. Wyden and Merkley, both Democrats from Oregon, urged then-Commissioner Scott Gottlieb to “immediately begin updating regulations for hemp-derived CBD and other hemp-derived cannabinoids, and give U.S. producers more flexibility in the production, consumption, and sale of hemp products.”  The letter demanded that FDA answer questions regarding whether food and dietary supplement pathways were available for hemp products, even though FDA had recently announced three GRAS affirmations on hemp ingredients and re-stated its public position regarding CBD.

What’s the takeaway? The House Appropriations Committee, charged with review of funding for FDA, wants public health and rigorous clinical evaluation to be the top priorities.  Meanwhile, as evidenced by Sens. Wyden and Merkley (among many others), consumers are clamoring for CBD and U.S. businesses are fearful of losing opportunity.  Given that FDA has acknowledged that the administrative notice and comment process may not be the most efficient way to address CBD pathways, we shall see whether the agency can strike a balance between the call for regulation that protects and informs consumers and the business community’s fear of missing out.

With CBD projected to be a $450 Million industry in the coming year, FDA hosted a packed house of industry stakeholders last week in a day-long public meeting that was the kickoff of a discussion to determine whether there is a pathway for CBD in ingestible products such as foods and dietary supplements.  See our summary of key themes here and check out this podcast episode to hear five key takeaways.