The other day as I walked on the Monroe Square, I passed three stores within a half block of each other selling CBD oil products. It seems like CBD oil is all the rage these days and there are many local farmers and small business people that are looking at it as a new opportunity to fulfill an apparent demand by consumers. What is CBD oil and what are some of the legal ramifications to this mysterious substance? This article will briefly address those questions.
CBD is the acronym for “Cannabidiol” which is derived from either marijuana plants or hemp plants. The 2014 Farm Bill permitted farmers to grow or cultivate industrial hemp if it was part of a state pilot program. The 2018 Farm Bill went a step further and removed hemp and hemp products from the auspices of the Controlled Substances Act. Industrial hemp is defined as the plant Cannabis sativa L. with a delta-9tetrahydrocannabinal (“THC”, the hallucinogenic drug in marijuana) concentration of not more than 0.3 percent on a dry weight basis.
In May of 2018, the federal Drug Enforcement Agency clarified that the mere presence of CBD is not dispositive as to whether a substance is within scope of the Controlled Substances Act (CSA). Rather, the dispositive question is whether the substance falls within the CSA definition of marijuana which requires the higher level of THC.
Wisconsin enacted the Wisconsin Industrial Hemp Pilot Program (WIHPP) in November 2017. Under the WIHPP, a licensed grower may grow and sell hemp and hemp derivatives. No license is required to sell CBD products, but the seller must be sure that the CBD products were made with hemp grown by a licensed grower. Products from a licensed grower should have a “Fit for Commerce Certificate” that verifies that the hemp passed the regulatory testing process and has a THC level of 0-.3% or less.
Individuals wanting to grow hemp need to apply for a Grower’s License and pay an application fee and an annual fee thereafter. Seeds should be certified as to the amount of THC the plant will produce. GPS coordinates of fields must be provided to law enforcement and the site should be secured. Hemp cannot be grown in your home. A research plan also must be submitted and record-keeping relating to the crop is not only required, but is critical. Planting reports need to be submitted to the Wisconsin Department of Agriculture and Consumer Protection. Failure to abide by the strict rules of the WDATCP can result in the complete destruction of the hemp crop.
While CBD oil may now be legally grown and sold, there are still other regulations which cast a shadow on the subject. Under the federal Food and Drug Administration’s regulations, a food item cannot be “adulterated” with certain substances – one of which is CBD. However, Wisconsin’s food safety statutes provide that a food item will not be considered “adulterated solely because it contains industrial hemp… or an industrial hemp product.” CBD products cannot be lawfully sold as dietary supplements unless they have been approved by the FDA, and under current FDA regulations, food and beverage products entering interstate commerce may not contain CBD. This conflict between the federal FDA and Wisconsin food safety statute has not been resolved, but impacts the sales of CBD products, including those sold online.
The Federal Trade Commission Act also makes it unlawful to advertise that a product can prevent, treat, or cure human disease unless there is competent and reliable scientific evidence. This includes, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made. The frequently advertised benefits of CBD oil are likely in violation of the FTC Act.
One might ask how the widespread retail distribution of CBD oil products can be occurring given the regulations of the FDA and FTC. It appears the FDA and FTC are turning a “blind eye” to the sale of CBD oil products, possibly in response to the ever increasing legalization of marijuana in many states across the country. Afterall, why should they be excited about CBD oil products which contain little or no THC, when in many states it is now legal (at the state level) to use products containing THC?
The growing and processing of hemp products in Wisconsin may either be a gold mine or a financial bust, and, the sale of CBD oil products is not without legal ramifications. Anyone considering growing or processing hemp; or selling CBD oil products should consult with a knowledgeable attorney first. As with any business, one should take a legal path that reduces risks and promotes success.
Robert S. Duxstad’s practice includes representation from criminal and traffic law, personal injury, civil litigation and OWI in Green and Lafayette Counties in Wisconsin. He can be reached by e-mail at duxstad@swwilaw.com.