Amid sustained legislative pressure for regulatory guidance and the FDA’s recent submission of draft enforcement guidance regarding cannabidiol (CBD) to the White House, signs from the FDA indicate increased momentum towards a federal pathway for the CBD market. This momentum from the FDA is affected by the approach to CBD taken by the U.S. Drug Enforcement Administration (DEA). While the industry awaits the FDA’s forthcoming guidance policy on CBD enforcement, the FDA’s approach articulated in two recent guidance documents contains important signals.

FDA’s Draft Guidance Documents on CBD in Drug Development

On July 21, 2020, the FDA’s Center for Drug Evaluation and Research released draft guidance regarding clinical research on cannabis and cannabis-derived compounds (available here). Just this week the FDA further refined this draft guidance regarding generic drugs containing CBD as an active ingredient (available here).

Both guidance documents pertain to drug products not any other FDA-regulated product category (such as food); they offer three potential lessons for suppliers of CBD products in other categories. Importantly, these documents are also intertwined with actions taken by the DEA, which has indicated that CBD cannot exceed 0.3% THC at any point in the manufacturing process or else risk enforcement as a “controlled substance.”

Implications

First, the FDA’s guidance documents recognize that the manufacturing process for CBD and other hemp-derived products can generate materials, whether intermediaries or in-process compounds, that exceed the 0.3% THC threshold and may prompt attention from the DEA. For example, the July guidance noted that “[s]ome manufacturing processes may generate materials, such as intermediates or accumulated by-products, that exceed the 0.3 percent [THC] by dry weight threshold even if the source material or finished product does not exceed the threshold.” The agency went on to recommend that manufacturers “who anticipate generating such intermediates or by-products that may be shipped between manufacturing sites should contact DEA for recommendations.”

Subsequent to the FDA’s July draft guidance, the DEA issued its interim final rule concerning that agency’s interpretation of the 2018 Farm Bill. In its August 2020 interim rule, the DEA appears to have determined that a product—at any point in the manufacturing process, even before final sale—that exceeds 0.3% THC could nonetheless be a “controlled substance” and subject to DEA enforcement action. Put differently, the DEA’s interim final rule appears to mean that THC levels can never exceed 0.3% at any point during the product’s manufacturing process, even if the final product offered for sale had THC at appropriate levels.

Second, the guidance documents signal that the agency approves of clinical research involving cannabis products containing 0.3% or less THC. Namely, researchers can use hemp and hemp-derived compounds without going through the federal Drug Supply Program (DSP). For many years, the DSP provided the only domestic federally-legal source of cannabis for clinical research. Cannabis for the DSP is grown under contract by the University of Mississippi at the National Center for Natural Products Research. This may indicate a general loosening of the sources of hemp and hemp-derived CBD for new product formulations from the federal perspective, provided that the product maintains a concentration at or below 0.3% THC.

Third, in the draft guidance, the agency discussed how to calculate CBD content in solutions, extracts, and for finished products. The 2018 Farm Bill keyed the calculation of THC to a weight basis, but the FDA noted that a “dry weight calculation has limited utility for intermediates such as solutions, extracts in solution (whether aqueous or non-aqueous), and for finished products.” Therefore, the agency recommended that product formulators base THC on the composition of the formulation with the amount of water removed. The July guidance describes five steps to calculate the water-adjusted THC concentration of a solution-based material, and the steps are reproduced below.

Calculations for water-adjusted THC level of a solution-based material (intermediate, in-process material, or final drug product):

1. Determine the density of the liquid formulation and convert 1 mL of the formulation to mass units (mg).
2. Calculate water content (in mg) of each active and excipient component present in 1 mL of the formulation.
3. Sum the water content (in mg) for all components present in 1 mL of the liquid formulation and subtract this amount from the total mass of 1 mL (from step 1). This is the water-adjusted total mass of 1 mL of the formulation.
4. Calculate the mass, or mg amount, of delta-9 THC present in 1 mL of the liquid formulation.
5. Calculate the percentage delta-9 THC by dividing the mass of delta-9 THC from step 4 by the total water-adjusted mass in step 3 and multiplying by 100.

While the guidance provides recommendations for drug products only at this point, they potentially signal how the FDA might encourage manufacturers to calculate THC levels in intermediates and consumer products in the future.

Conclusion

As the CBD industry continues to wait for the FDA to issue its long-awaited CBD enforcement policy, the draft guidance the FDA has issued regarding drug products provides clues as to how it might bring order to the fragmented world of CBD regulations.

All of the guidance documents—both from the FDA and DEA—discussed in this piece are subject to change, as the agencies involved incorporate comments received from the public. Both FDA guidance documents are in draft form. The comment period for the July guidance ended on September 21, 2020, with the agency receiving 56 comments (comments are available here), and the draft guidance issued in September has a comment period that is ongoing (the docket is available online here).

As for the DEA’s interim final rule, it became effective as of August 21, 2020. But the public may provide comments to the agency here until October 20, 2020. As of September 24, 2020, the DEA has already received over 2,400 comments. An administrative challenge to the DEA interim rule was also recently filed in the United States Court of Appeals for the District of Columbia Circuit.