The District Court for the Western District of New York denied a motion on January 6, 2023, to dismiss claims alleging that a publicly traded company misled investors regarding an investigation by the U.S. Securities and Exchange Commission (SEC). The company, 22nd Century, engineers cannabis plants to regulate their levels of cannabinoids. The court’s denial of the motion to dismiss is an important reminder to companies, especially those in the cannabis space, about the importance of compliance and disclosure.Continue Reading New York Cannabis Co. Investor Suit Survives Motion To Dismiss
Will The New Year Finally Bring FDA Guidance on CBD?
As 2022 drew to a close, the Wall Street Journal reported that the FDA is finally considering releasing potential guidance regarding cannabidiol (“CBD”) in the coming year. While the exact timeline and scope of the FDA’s potential action is unclear, the Journal asserts that the agency will decide “within months” regarding the appropriate regulation of CBD and whether that regulation would require Congressional action or new agency rulemaking. Concurrently, the FDA continues to explore potential CBD safety risks.
The agency has generally pursued limited enforcement activity to-date regarding CBD, with a focus on products in foods and beverages that make unsubstantiated health claims, such as claims that CBD could treat or prevent cancer or Covid-19. Stopping short of taking aggressive action, the FDA has only issued warning letters on CBD, despite the widespread availability of largely-unregulated food and beverage products containing the hemp-derived cannabinoid.Continue Reading Will The New Year Finally Bring FDA Guidance on CBD?
FDA Issues New Warning Letters to Companies Making CBD and Delta-8 THC Edibles
On November 16, 2022, the Food and Drug Administration (FDA) issued five new warning letters to various companies making edible products containing cannabidiol (CBD) and/or Delta-8-tetrahydrocannabinol (THC). The companies were directed by the FDA to respond within 15 days to defend how their products do not violate the Food, Drug, and Cosmetic Act (FDCA) and how they plan to bring their products into compliance with the FDCA. Failure to address the issue to the agency’s satisfaction could plausibly result in enforcement actions, including seizure and/or an injunction.
The FDA’s most recent set of warning letters builds upon warning letters sent earlier this year targeting CBD and Delta-8 THC products. Previously, FDA has largely focused on CBD products that made health claims. These new warning letters are not, however, limited to those prior concerns. The FDA now appears to be particularly concerned about CBD and Delta-8 THC products that appeal to children.Continue Reading FDA Issues New Warning Letters to Companies Making CBD and Delta-8 THC Edibles
CLIMB Act Introduced in Congress
Late last week, a bi-partisan pair of federal lawmakers introduced a new bill to expand cannabis companies’ access to financial resources and opportunities. Introduced by Reps. Troy Carter (D-La.) and Guy Reschenthaler (R-Pa.), the Capital Lending and Investment for Marijuana Businesses (“CLIMB”) Act, H.R. 8200, aims to permit cannabis businesses to engage with community development, small business, minority development, and other public or private financial capital sources for investment and financing. Further, the bill aims to create a safe harbor for security exchanges to list securities for legitimate cannabis businesses.Continue Reading CLIMB Act Introduced in Congress
State AGs Call for Congressional Action on Copycat THC Edibles
More than 20 state attorneys general (AGs) authored an open letter to congressional leaders calling for legislation that would regulate tetrahydrocannabinol (THC) edibles that mimic the packaging and names of popular product. In their June 22 letter, the state AGs voiced their concern, particularly for children, writing that “copycat THC edibles pose a grave risk to the health, safety, and welfare of our children.” Specifically, the state AGs asked Congress to “immediately enact legislation authorizing trademark holders of well-known and trusted consumer packaged goods to hold accountable those malicious actors who are using those marks to market illicit copycat THC edibles to children.”Continue Reading State AGs Call for Congressional Action on Copycat THC Edibles
Where Is the SAFE Banking Act?
As Congress continues to debate the SAFE Banking Act, cannabis business and financial institutions should pay close attention to the bill’s potential to transform the accessibility of banking and payment processing solutions within the cannabis industry. In May, a national group of state banking regulators issued open letters to Congress urging passage of the bill. This action by state banking regulators builds upon prior support from groups like the American Bankers Association as well as dozens of state governors and attorneys general. Here, we check in on the status of the SAFE Banking Act and look ahead for its implications if passed.Continue Reading Where Is the SAFE Banking Act?
FDA Issues New CBD Warning Letters for Animal Products
On May 26, the FDA issued warning letters to four companies alleging that the companies sold unapproved animal drugs containing cannabidiol (CBD). Specifically, these products were intended for use in food-producing animals. In announcing the warning letters, the agency stated it was “taking steps regarding these unapproved and potentially unsafe products now to help protect animals and the safety of the food supply.”
The FDA’s latest set of warning letters builds upon the letters the agency has issued in recent years that highlight that CBD products are not approved for the diagnosis, cure, mitigation, treatment, or prevention of any disease. Just this year, the agency issued at least 14 such letters targeting consumer products. These warning letters are unique as they target companies selling products targeted for food-producing animals, rather than those focused on human consumption. Continue Reading FDA Issues New CBD Warning Letters for Animal Products
Ninth Circuit Rules on Legality of Delta-8 THC Products
On May 19, 2022, the U.S. Circuit Court of Appeals for the Ninth Circuit issued an opinion holding that Delta-8 THC products are legal at the federal level and eligible for intellectual property protection. The Ninth Circuit held that the “2018 Farm Bill was silent with regard to Delta-8 THC,” writing that “regardless of the wisdom of legalizing delta-8 THC products, this Court will not substitute its own policy judgment for that of Congress.” According to the Court, if the bill “inadvertently created a loophole legalizing vaping products containing delta-8 THC, then it is for Congress to fix its mistake.”
The case involved two companies selling products both labeled under “Cake” branding. Manufacturer AK Futures argued that a competitor was selling counterfeit “Cake” Delta-8 THC products. The competitor did not contest that it was selling counterfeit “Cake” products, but instead it argued that AK Futures could not hold a valid trademark because Delta-8 THC was illegal under federal law.Continue Reading Ninth Circuit Rules on Legality of Delta-8 THC Products
FDA Issues Public Warning Regarding Accidental Ingestion of THC Food Products
On May 13, the FDA issued a public warning regarding reports of accidental ingestion of food products containing tetrahydrocannabinol (THC) by children. The FDA warned that edible products containing THC “can be easily mistaken for commonly consumed foods such as breakfast cereal, candy, and cookies, and accidentally ingested.” The agency was particularly concerned as some
California Proposes New CBD Regulations & Registration Requirements
California enacted statute AB 45 in October 2021, authorizing the use of hemp and hemp-derived cannabidiol (CBD) in food, beverages, dietary supplements, and cosmetics at the state level. Now, state regulators have proposed new regulations to govern the state’s hemp-derived CBD market. Comments on the proposed regulations are due by May 31, 2022.
California’s proposed regulations primarily address new registration requirements for in-state industrial hemp manufacturers and out-of-state industrial hemp extract manufacturers. In-state manufacturers of extract, human foods (including beverages and dietary supplements), cosmetics and processed pet food products containing industrial hemp will need the appropriate registration for their respective products. Manufactures may be required to hold multiple registrations for each type of product manufactured if the proposed rule is adopted.Continue Reading California Proposes New CBD Regulations & Registration Requirements