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Holy Hemp: New Jersey Court Partially Invalidates Hemp Law

On Oct. 10, 2024, a New Jersey Federal District Court made a big decision on hemp. The Court largely invalidated New Jersey’s recent attempt to tighten controls on “intoxicating hemp products” like Delta-8 and Delta-10, which were previously sold in gas stations, smoke shops, and convenience stores without much oversight. The state had put forward amendments aimed at restricting these products to those over 21 and regulating them like cannabis. New Jersey argued that it was time to clamp down on these sales, citing public health concerns and the rising number of minors getting their hands on these potent, unregulated products.

NJ Gov. Phil Murphy had signed off on these amendments despite admitting the law wasn’t perfect. For him, protecting minors was the priority. And today, the Court shared that sentiment—partially. It kept in place only the part that prevents the sale of these products to minors.

As for the rest of the amendment? The Court struck it down. The reason? It found that New Jersey’s approach violated federal law, essentially treating hemp products from out-of-state differently from those produced locally under the New Jersey Cannabis Regulatory Commission’s new process. This selective control crossed the line, according to the Dormant Commerce Clause of the Constitution and provisions in the Federal Farm Act, which stops states from blocking the transport of hemp products.

The Court’s decision made it clear that New Jersey does have the power to regulate these sales, but the amendments need legislative fine-tuning to meet federal standards. So, while New Jersey’s push to regulate intoxicating hemp is on pause, this is far from over.

Here’s where the decision makes things complicated for sellers: By Oct. 12, shops were supposed to pull these hemp products from the shelves, including Delta-8 drinks and THC-A gummies. That means, until New Jersey’s Cannabis Regulatory Commission issues new rules, those products are off-limits.

For anyone in the hemp or cannabis business in New Jersey, it’s a loud reminder—stay compliant, stay updated, and be ready to adapt quickly to changes.

by: Benjamin Sheppard of Norris McLaughlin P.A.
©2024 Norris McLaughlin P.A., All Rights Reserved

For more news on Hemp Legality, visit the NLR Biotech, Food, & Drug section.

Missouri Cannabis Regulators Show Me a Well-Considered Clarification of Earlier Rule Essentially Banning Hemp Products

I can only assume that being a cannabis regulator is a challenging and usually thankless job. The laws are relatively new and constantly evolving. Operators are always pushing the science faster than regulators can promulgate thoughtful new rules. And of course, there is no shortage of bad actors in the cannabis business.

That said, Budding Trends has been tough on cannabis regulators when it seemed warranted. And we’ve had no shortage of material.

We wanted to take this occasion to applaud the recent letter from the Missouri Department of Health & Senior Services announcing a substantial rollback of Gov. Mike Parson’s Executive Order that appeared to ban all “psychoactive cannabis products.”

The governor’s order would, by its terms, essentially destroy the state’s market for products containing hemp-derived THC. To be fair, the stated purpose of the order – to keep psychoactive cannabis products out of the hands of children – is a noble goal and one shared by any responsible operator in the hemp-derived THC business. Unfortunately, the plain language of the order goes much further and threatens to end the sale of most hemp products in Missouri.

In comes Missouri Department of Health & Senior Service Deputy Director and General Counsel Richard Moore to the rescue. In a recent letter, Moore “clarify[ied] any misunderstandings about the Department’s efforts to keep Missourians and their children safe from psychoactive cannabis products, sometimes called intoxicating cannabis products.” As part of this clarification, and in furtherance of the department’s commitment to “transparency in its enforcement efforts,” the department will limit its focus to (1) hemp-derived THC products targeting children and (2) “any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of [hemp-derived THC products].”

The department does not have any intention, however, of initiating enforcement actions against other hemp-derived THC products. Specifically, “[h]emp or cannabidiol (CBD) products which are collected by extraction and have not been changed into a new substance, such as hemp protein powders, hemp milk, hemp flower, hemp teas or other drinks, CBD gummies, CBD drink additives, or foods with CBD” are not the focus of the department’s enforcement efforts.

I believe this represents a fair compromise that accomplishes both the governor’s stated and worthwhile goals of eliminating deceptive hemp operators and those who would sell hemp-derived THC products to children, as well as keeping the hemp regime implemented by the Missouri Legislature in place.

More states would do well to consider this approach. For an example of the opposite approach, consider our recent post on Mississippi’s potential ban on hemp beverages. Consider, too, a much different approach taken by the solicitor general of South Carolina, which we will write about in the coming days.

And perhaps most importantly, consider whether Congress can fashion a similar compromise as it considers federal hemp policy in the next Farm Bill in the coming months.

A Study in THC-O: Unpacking the Recent Anderson Case

Recently, the United States Court of Appeals for the Fourth Circuit handed the Drug Enforcement Administration (“DEA”) a big loss when it comes to hemp. In Anderson v. Diamondback Investment Group, LLC, the court ruled that the DEA’s interpretation, which classified a host of hemp-derived products as illegal, was incorrect.

I’ve previously written about the impact of Loper Bright Enterprises v. Raimondo on cannabis and hemp in this blog, and Anderson is one of the first cases to show how courts will handle cannabis law post-Chevron. In Loper, the Supreme Court ended the long-standing doctrine of Chevron deference. That doctrine required federal courts to defer to an agency’s interpretation of an ambiguous statute, so long as it was “reasonable,” even if the court didn’t agree with it. Now, courts don’t have to give the DEA (or any agency) that kind of leeway. If the agency’s interpretation isn’t the best reading of the statute, it is merely persuasive material at best.

This reminds me of my days of clerking on the Court of Common Pleas. Oftentimes, lawyers would cite other non-binding Common Pleas decisions, and the judge would merely say he would consider them but did not view them as binding. It’s almost like déjà vu for me now with Loper, on a grander scale.

Since Loper was decided, everyone has had theories about how it could impact things like cannabis rescheduling or the legality of hemp-derived cannabinoids. In particular, the DEA has been flexing its muscles with opinion letters about what it considers to be legal or illegal cannabinoids. This is where Loper comes into play. In theory, the DEA can still issue its opinions, but the courts aren’t going to roll over and accept those interpretations without question anymore. That’s exactly what happened in Anderson.

Without getting into the weeds of the case too much, here’s the gist: an employee was fired after drug tests allegedly showed cannabis use. She sued her employer, claiming she was using legal hemp-derived products. The court said she didn’t provide enough evidence to prove those products contained less than 0.3% Delta-9 THC—the magic number that separates hemp from cannabis under federal law. So, in the district court’s view, she did not have a case.

But the important part for us is what the court said about the 2018 Farm Bill and the DEA’s interpretation of cannabinoids like THC-O. THC-O is a synthetic compound made from hemp derivatives, and there’s been a long debate about whether products like THC-O or Delta-8 THC fall under the “hemp” umbrella.

The DEA considers synthetic cannabinoid-controlled substances, and they’ve argued that products like THC-O are illegal. The Ninth Circuit took on this issue a few years ago in AK Futures LLC v. Boyd Street Distro, LLC, where they ruled that Delta-8 THC products derived from hemp with less than 0.3% Delta-9 THC were legal under the 2018 Farm Bill.

In Anderson, the Fourth Circuit agreed with the Ninth Circuit’s logic, holding that “we think the Ninth Circuit’s interpretation of the 2018 Farm Act is the better of the two.” The court went even further, rejecting the DEA’s argument outright, thanks to the post-Loper world we now live in, where the DEA’s interpretation no longer gets automatic deference.

Here’s the key takeaway: according to the Fourth Circuit, if a product is derived from hemp and doesn’t contain more than 0.3% Delta-9 THC, it’s legal—even if it’s been processed into something like Delta-8 THC. But if a cannabinoid is made entirely from synthetic materials, it’s not hemp, and it’s not protected by the 2018 Farm Bill.

Now, before anyone starts thinking this is an all-clear for hemp products, there’s still a lot to unpack. While Anderson pushes back against the DEA’s overreach, it doesn’t mean every hemp-derived product is automatically legal. The 0.3% Delta-9 THC threshold is still critical, and businesses need to make sure they’re playing by the rules. Plus, this ruling doesn’t mean states won’t have their own say about what’s legal within their borders.

To sum it all up, the Anderson decision is important because it reinforces that courts are not bound by the DEA’s interpretations, especially post-Loper. This decision helps the hemp-derived cannabinoid market. As always, businesses must stay compliant with both federal and state laws to avoid legal headaches.

For more news on Hemp Classification Litigation, visit the NLR Biotech, Food, and Drug section.

Supreme Court Decision Overturns Chevron: Impact on Cannabis Industry

Last month, the United States Supreme Court issued its decision and opinion in Loper Bright Enterprises v. Raimondo, significantly overruling the nearly 40-year-old precedent set by Chevron. The Chevron decision required federal courts to defer to a government agency’s interpretation of an ambiguous statute unless that interpretation was “arbitrary, capricious, or manifestly contrary” to the statute. This meant that if an agency such as the DEA published a bulletin or letter interpreting an ambiguous law, courts were generally bound to follow this interpretation due to the agency’s presumed expertise.

The Shift in Legal Interpretation

Loper Bright Enterprises has fundamentally changed this legal landscape. Now courts, rather than government agencies, are considered the best equipped to interpret ambiguous statutes. This shift means that a government agency’s interpretation of an ambiguous statute is now merely persuasive and not binding on the courts. This can be likened to a Pennsylvania court interpreting a Pennsylvania law and considering, but not being bound by, a Delaware state court’s interpretation of a similar corporate law. Just as Pennsylvania courts can choose to defer to, distinguish from, or disregard Delaware court decisions, federal courts now have the same discretion regarding agency interpretations of ambiguous statutes.

Impact on the Cannabis Industry

This change has significant implications for the cannabis industry. The Drug Enforcement Administration (DEA) enforces federal drug laws and has issued numerous letters and bulletins determining the legality of various cannabis substances. For example, the DEA issued opinions that seemingly argued that Delta-8 THC products and THCA products were not allowed under the 2018 Farm Bill. I have generally disagreed with these interpretations, believing that the DEA incorrectly cited statutes related to hemp at harvest rather than downstream products.

With Loper Bright Enterprises, these DEA letters will lose their authoritative value. Courts are no longer bound to follow DEA interpretations and can more readily consider arguments opposing the DEA’s stance. This development is critical for the cannabis industry, as it opens the door for courts to reinterpret federal drug laws and potentially challenge the DEA’s restrictive interpretations of the 2018 Farm Bill.

The Importance of This Shift

The overruling of Chevron by Loper Bright Enterprises marks a pivotal change in administrative law, particularly impacting the cannabis industry. This shift of interpretive authority from government agencies to the courts means there is now greater potential for legal challenges to restrictive interpretations of cannabis laws. This change enhances the ability of cannabis businesses and advocates to contest adverse decisions and interpretations by the DEA and other agencies, potentially leading to more favorable outcomes for the industry.

Navigating Hemp THC Beverages

Nonalcoholic beverages infused with delta-9 tetrahydrocannabinol (THC) derived from hemp (aka intoxicating hemp beverages) are becoming increasingly popular for consumers looking for an alternative to alcohol.

With major alcohol retailers like Total Wine entering the cannabis space, alcohol beverage producers may be looking for opportunities to leverage their existing experience in manufacturing, marketing and distributing alcohol beverages towards the emerging intoxicating hemp beverage market. While intoxicating hemp beverages are arguably legal pursuant to the Agriculture Improvement Act of 2018 (2018 Farm Bill), risks remain under federal and state food and drug laws. Accordingly, beverage producers looking to enter this emerging market should become familiar with the ambiguities involved.

Federal Treatment of Intoxicating Hemp Beverages

The 2018 Farm Bill removed hemp, defined as cannabis (Cannabis sativa L.) and derivatives of cannabis with extremely low concentrations of delta-9 THC (specifically, no more than 0.3 percent THC on a dry weight basis), from the definition of “marijuana” in the Controlled Substances Act. The federal government defines hemp as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Accordingly, products that meet the definition of “hemp” may be marketed and sold in the United States and are no longer classified under federal law as illegal drugs.

How Is Hemp Regulated?

Under the 2018 Farm Bill, the US Department of Agriculture (USDA) has been assigned to regulate hemp production.

However, any hemp-derived foods, including beverages, are subject to regulation by the US Food & Drug Administration (FDA) under the Food, Drug, and Cosmetics Act (FDCA). While the FDA has largely avoided enforcement actions against such products, focusing most of its efforts on products making unsubstantiated medical and therapeutic claims, it has clearly concluded that it is a prohibited act under federal law to introduce any food in the market to which THC or cannabidiol (CBD) has been added. Therefore, the risk of federal enforcement remains until the agency changes its stance towards THC as a beverage additive.

State Regulation

While the federal government has been inactive in this space, the legal status of intoxicating hemp beverage products varies significantly by state. On the one hand, several states, including Minnesota, have expressly legalized the inclusion of hemp-derived cannabinoids in beverage products, with clear regulations regarding testing, labeling, advertising and more. On the other hand, some states have legalized hemp beverage products but lack a robust regulatory framework – leading to a mostly unregulated, laissez-faire market.

Further, many states fall into a grey area when it comes to the legality of such products. Some of these states have legalized hemp along the lines of the 2018 Farm Bill but have not officially opined on whether it can be added to beverage products, while others do not mention hemp products at all. A subset of states has expressly legalized hemp in beverages, as long as it complies with federal guidance, which currently does not affirmatively allow hemp to be used as a beverage additive.

One of the most extreme measures taken by state officials to ban hemp from beverage products is currently underway in South Carolina. The state’s Department of Health and Environmental Control (DHEC) recently issued a letter to the hemp industry warning that certain hemp products are not approved to be added to beverage products, including delta-9 THC.

In its letter, the DHEC also ruled that labels and packaging may not contain references to “THC,” “CBD” or “delta-9” products, or isolates, as this implies the product is no longer a food item but is a drug and is unlawful.

This new guidance is far from outlawing cannabinoids in beverages, but it affects a growing industry that has already been promoting intoxicating hemp beverages in the state. Indeed, some beverage manufacturers in South Carolina have been forced to halt production, citing confusion over the new labeling and packaging requirements. This demonstrates how the legal landscape around intoxicating hemp beverages can change rapidly.

Finally, it is important to note that even states that expressly allow and regulate THC-infused beverage products fall into a grey area when we consider the current state of federal regulations. Until Congress acts or the FDA changes its stance towards THC as a beverage additive, we will continue seeing a patchwork of different approaches.

Marijuana in the Manufacturing Workplace

The requirement to maintain a safe workplace often clashes with state and local laws that protect the rights of individuals who use marijuana while off-duty, creating unique challenges for manufacturing employers.

Manufacturing employers still may prohibit the use of marijuana at work, as well as marijuana impairment at work. But marijuana drug testing is complicated and controversial because of the legal protections for off-duty marijuana use in some states and cities, the legal protections for medical marijuana users in many jurisdictions, and because there are no drug tests that can detect current marijuana impairment or very recent use of marijuana.

Federal Law

Manufacturers no longer should defend “zero tolerance” marijuana drug testing policies. Previously, employers could argue that marijuana still is illegal under federal law or that the employer is a federal contractor that must comply with the federal Drug-Free Workplace Act. The federal government has not enforced the law that makes marijuana illegal for some time, and it has permitted states to create and enforce their own laws with respect to medical and recreational marijuana.

Some courts have recognized that the federal government is allowing state governments to regulate marijuana and, therefore, courts are enforcing state marijuana laws despite marijuana’s illegal status at the federal level. Courts also have rejected arguments that federal contractors “must follow federal law” because the federal Drug-Free Workplace Act does not require drug testing and does not permit employers to regulate off-duty conduct.

State Laws

At present, 39 states and the District of Columbia have medical marijuana laws, while 22 states and the District of Columbia have recreational marijuana laws (Maryland’s law will take effect in July and others will be enacted in the coming months). Many of these laws provide employment protections to applicants and employees. The variations in the laws make it difficult for multi-state manufacturers to have consistent marijuana policies in all locations.

What It Means for Employers

Due to the recent trend in some states to protect off-duty use of marijuana, and even prohibiting pre-employment marijuana testing, many manufacturers are discontinuing pre-employment marijuana testing, especially in states where marijuana is legal. Applicants often are surprised to learn that a positive marijuana drug test will lead to withdrawal of the job offer. If the positive marijuana drug test result is due to medical use (and there are no general off-duty protections in the state), manufacturers must be familiar with the applicable law.

Some states prohibit discrimination against medical marijuana users, while other states may allow an employer to take an adverse employment action if the job is considered “safety-sensitive,” i.e., a job with dangerous duties, as defined by applicable state law.

In certain other states where discrimination is prohibited and the manufacturing employer has safety concerns, the employer should engage in the “individualized assessment” and “direct threat analysis” required under state laws that mirror the federal Americans With Disabilities Act. This process includes discussions with the applicant and the applicant’s physician to assess the safety risk.

Reasonable suspicion marijuana testing is permissible in most states because impairment at work never is permitted. In states where off-duty marijuana use is protected, manufacturers should rely on the impaired behaviors when taking disciplinary action, rather than rely solely on the positive marijuana drug test result (assuming that testing for marijuana is permitted). This is because marijuana stays in the human body for a long time, so the positive drug test result is not conclusive proof that the employee was impaired at work. Manufacturers also should make sure that supervisors and managers are trained to observe and document reasonable suspicion determinations properly, as these documented observations will be key evidence in a potential lawsuit.

To make matters even more complicated, CBD (cannabidiol), “low THC,” and hemp products are being marketed and sold everywhere since Congress legalized hemp (having no more than 0.3 percent THC, the psychoactive component of marijuana) in 2018. Separate from marijuana laws, the use of “low THC” or CBD products is allowed in a number of states, usually for medical purposes, which means that manufacturing employers should tread carefully when an applicant or employee claims to use CBD products for medical reasons. While many CBD and hemp products are marketed as having little or no THC, these statements may not be true, because the U.S. Food and Drug Administration does not yet regulate them. These products may cause positive drug test results for marijuana. There has been an increase in lawsuits where former employees claim that their positive marijuana drug test results allegedly were caused by CBD products.

While it appears that marijuana eventually will be legalized at the federal level, manufacturers must ensure they are complying with all applicable laws. Manufacturing employers should:

Review drug and alcohol policies for compliance with applicable drug testing and marijuana laws;
Remove marijuana from the drug testing panel in locations where testing for marijuana is prohibited and locations where off-duty use is protected and consider removing it in other locations where it may be an obstacle in the hiring process;
Train Human Resources employees and other managers to engage in the interactive process with employees who use medical marijuana (or medical CBD products); and
Train supervisors to make appropriate and timely “reasonable suspicion” determinations.

For more cannabis legal news, click here to visit the National Law Review.

Tenth Circuit Declares No Remedy for Hemp Farmer Whose Federally Legal Plants Were Seized

In January, the United States Court of Appeals for the Tenth Circuit issued a published opinion in Serna v. Denver Police Department, No. 21-1446 (10th Cir. Jan. 24, 2023), upholding the dismissal of a hemp farmer’s lawsuit against local government officials in Colorado who confiscated his plants.

The farmer – Francisco Serna – brought suit under the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”) which legalized hemp across the country and included limitations on states’ ability to prohibit the transportation of certain hemp plants and products across state lines. However, the three-judge panel concluded that no provision within the law allows for a private right of action by an individual to challenge instances of perceived unlawful governmental interference.

Serna grew hemp in Texas and intended to bring several plants home with him from Colorado. But when he attempted to get the plants – consisting of “plant clones or rooted clippings” – through Denver’s airport, a police officer confiscated them under a departmental policy to seize plants containing any discernible level of THC. Even though Serna had documentation showing that the plants’ THC level was beneath the limit authorized by the 2018 Farm Bill – and therefore compliant under federal law – the officer took the plants anyway.

Serna’s Legal Proceedings

Serna sued the Denver Police Department and the confiscating officer under Section 10114(b) of the 2018 Farm Bill, which prohibits states from interfering with interstate transport of hemp and products that comply with the law. Serna asserted that because his plants were complaint, the defendants violated the provision. However, a federal magistrate judge granted the defendants’ motion to dismiss, which the district court adopted.[1] Serna then appealed to the Tenth Circuit.

The Tenth Circuit also held that no private right of action existed for Serna to employ. The court’s conclusion rests on the determination that Congress did not intend that hemp farmers, like Serna, should constitute a protected class under the 2018 Farm Bill. Without that status, they cannot sue. The court focused on the plain language of Section 10114(b), reasoning that it “makes no mention of [a] purported class of licensed [hemp] farmers” and merely provides that “no state…shall prohibit the transportation or shipment of hemp” across its borders. Thus, the provision pertains only to “the person regulated rather than the individuals protected,” which is fatal to the private right of action inquiry. The court compared Section 10114(b) with other federal statutes that do create private rights of action, such as Title VI of the 1964 Civil Rights Act, which specifies that “[n]o person…shall…be subjected to discrimination.” 42 U.S.C. § 2000d.

Takeaways

The unfortunate result of this decision is that individuals who comply with the provisions of the 2018 Farm Bill during the course of their business operations cannot seek recourse from improper government meddling. As a result, the law is significantly less protective than anticipated. Rather than suing to protect their interests, entrepreneurs like Serna must instead depend upon other actors – perhaps state attorneys general – to pursue these types of cases. However, those non-stakeholders generally have less incentive to pursue lawsuits, particularly against peer law enforcement agencies, leaving hemp operators with no remedy to enforce their rights under the 2018 Farm Bill.

In a broader sense, the Serna case is a cautionary tale for those who expect federal descheduling of marijuana to resolve the regulatory complexities currently faced throughout the cannabis industry. If hemp operators working with products that are federally legal are unable to utilize the courts to challenge unlawful seizure of their products, then the effectiveness of federal legalization of cannabis may require an express private right of action.

Going forward, Serna has a limited period of time to request that the case be re-heard by the Tenth Circuit en banc (i.e., by the entire eleven-judge court) – otherwise, the three-judge panel’s opinion will remain the operative, binding outcome.

[1] The magistrate judge and the district judge differed on their bases for concluding that Serna could not sue under the 2018 Farm Bill. Specifically, the magistrate judge determined that Section 10114(b) neither created a private right of action nor a private remedy. The district judge, on the other hand, concluded that Congress did authorize a private right of action but no private remedy to enforce it was evident. This additional divergence is another example of how the 2018 Farm Bill is susceptible to conflicting interpretations, which will likely only increase going forward as other courts consider the issue.

Article By Emily M. Leongini, Shahiedah Shabazz, and Morgan R. Pankow of ArentFox Schiff LLP

For more cannabis legal news, click here to visit the National Law Review.

FDA Finalizes Cannabis Guidance Focusing on Clinical Research and Quality Considerations

On January 23, 2023, the U.S. Food and Drug Administration (FDA) issued its final guidance, “Cannabis and Cannabis-Derived Compounds: Quality Considerations for Clinical Research” (the Final Guidance). The agency outlines current recommendations for drug sponsors developing cannabis and cannabis-derived compounds for use in human drug clinical research. Cannabis and cannabis-derived compounds include botanical raw materials, extracts, and highly purified substances of botanical origin.^[i] FDA published the draft version of the guidance in July 2020 and received 60 public comments. Below, we outline key points from the Final Guidance.

Background

The Agriculture Improvement Act of 2018 (Public Law 115-334), known as the 2018 Farm Bill, removed “hemp” from the definition of “marihuana” under the Controlled Substances Act (CSA). Now, hemp is not considered a controlled substance. “Hemp” is defined in the 2018 Farm Bill as including cannabis and derivatives or extracts of cannabis with no more than 0.3% by dry weight of the compound delta-9 tetrahydrocannabinol (THC). The Drug Enforcement Administration (DEA) still regulates as Schedule I controlled substances those botanical raw materials, extracts, and derivatives that contain cannabis or cannabis-derived compounds with delta-9 THC content above 0.3% by dry weight.
Cannabis and cannabis-derived compounds – even those meeting the 2018 Farm Bill’s definition of “hemp” – are typically subject to the same FDA clinical research regulatory requirements and standards as human drug products containing other substances.

Cannabis Sources and Quality Considerations

Sponsors may use cannabis (including hemp) in human drug clinical research if FDA deems the cannabis to be of “adequate quality.” The agency will review quality issues in the context of an investigational new drug (IND) application.
Historically, the National Institute on Drug Abuse (NIDA) Drug Supply Program (DSP) was the only domestic, federally legal source of cannabis for clinical research. That is no longer the case. Human drug sponsors may now source cannabis regulated as a Schedule I controlled substance from other DEA-authorized growers.
Human drug sponsors should consider the recommendations in FDA’s final guidance, “Botanical Drug Development” (Dec. 2016). Importantly, the agency does not recommend relying on published literature as a substitute for data from a full toxicology program to support drug product development for phase 3 clinical research (and beyond). Dedicated toxicology studies are specifically recommended for 7-COOH-CBD, the major human metabolite of cannabidiol.

CSA Controlled Status

When a drug sponsor submits an IND to FDA as part of cannabis-related human drug clinical research, the sponsor should determine the potential controlled substance status of any botanical raw materials, drug substances, and drug products by taking into consideration the delta-9 THC content. The agency encourages sponsors to calculate the delta-9 THC content in the proposed investigational product early in the drug development process and to consult with the DEA.
Generally, the delta-9 THC percentage in botanical raw materials is calculated as the amount of delta-9 THC (and THCA) naturally present in a material sample relative to the sample’s dry weight prior to extraction or other manufacturing steps. For intermediates or finished products containing cannabis or a cannabis-derived compound, sponsors should calculate the total delta-9 THC percentage using the composition of the formulation with the amount of water removed (including water contained by excipients). These calculations should not be used for other purposes (e.g., Chemistry Manufacturing and Controls (CMC)).
FDA may have concerns with drug abuse liability. As part of the agency’s review of a new drug application (NDA), FDA may conduct an abuse potential assessment. Such an assessment could impact drug product labeling as well as DEA scheduling or rescheduling.

For more Cannabis Legal News, click here to visit the National Law Review.

FOOTNOTES

[i] Fully synthetic versions of substances occurring in cannabis (e.g., dronabinol) fall outside the Final Guidance’s scope.

DOT Proposes New Guidance For Medical Examiners To Address CBD Use By Commercial Motor Vehicle Drivers

The U.S. Department of Transportation, Federal Motor Carrier Safety Administration (FMCSA) published a proposed draft Medical Examiner’s Handbook (MEH), including updates to the Medical Advisory Criteria, in the Federal Register on August 16, 2022. The FMCSA’s regulations provide the basic driver physical qualification standards for commercial motor vehicle (CMV) drivers, in 49 CFR 391.41 through 391.49. DOT Medical Examiners currently make physical qualification determinations on a case-by-case basis and may consider guidance to assist with making those determinations.

FMCSA stated that the goal of the updated MEH and related Medical Advisory Criteria is to provide information about regulatory requirements and guidance for Medical Examiners to consider when making physical qualification determinations in conjunction with established best medical practices. The revised Medical Advisory Criteria, in addition to being included in the MEH, would also be published in Appendix A to 49 CFR part 391. The final version of the criteria would be identical in both publications. FMCSA is proposing to update both the MEH and Medical Advisory Criteria and seeks public comment on these documents until September 30, 2022. The draft MEH may be viewed here.

Use of CBD with 0.3% THC or Less Is Not Automatically Disqualifying

Under FMCSA regulation 49 CFR 391.41(b)(12)(i), CMV drivers are not permitted to be physically qualified when using Schedule I drugs under any circumstances. The federal Controlled Substances Act lists marijuana, including marijuana extracts containing greater than 0.3% delta-9-tetrahydrocannabinol (THC), as Schedule I drugs and substances. A driver who uses marijuana cannot be physically qualified even if marijuana is legal in the State where the driver resides for recreational or medical use.

However, under current federal law cannabidiol (CBD) products containing less than 0.3% THC are not considered Schedule I substances; therefore, their use by a CMV driver is not grounds to automatically preclude physical qualification of the driver under §391.41(b)(12)(i).

FMCSA emphasized that the U.S. Food and Drug Administration (FDA) does not currently determine or certify the levels of THC in products that contain CBD, so there is no federal oversight to ensure that the labels on CBD products that claim to contain less than 0.3% of THC are accurate. Therefore, drivers who use these products are doing so at their own risk.

FMCSA now proposes that each driver should be evaluated on a case-by-case basis and encourages Medical Examiners to take a comprehensive approach to medical certification and to consider any additional relevant health information or evaluations that may objectively support the medical certification decision. Medical Examiners may request that drivers obtain and provide the results of a non-DOT drug test during the medical certification process, if it is deemed to be helpful in determining whether a driver is using a prohibited substance, such as a CBD product that contains more than 0.3% THC.

This guidance does not impact FMCSA’s drug and alcohol testing regulations. Use of a CBD product does not excuse a positive marijuana drug test result.

Use of Suboxone and Similar Drugs Is Not Automatically Disqualifying

FMCSA received a large number of inquiries related to Suboxone (a Schedule III drug under federal law, meaning that it has a lower potential for abuse than Schedule I and II drugs). Treatment with Suboxone and other drugs that contain buprenorphine and naloxone, as well as methadone, are not identified in the FMCSA regulations as precluding medical certification for operating a CMV. FMCSA relies on the Medical Examiner to evaluate and determine whether a driver treated with Suboxone singularly or in combination with other medications should be issued a medical certificate. The Medical Examiner should obtain the opinion of the prescribing licensed medical practitioner who is familiar with the driver’s health history as to whether treatment with Suboxone will or will not adversely affect the driver’s ability to safely operate a CMV. The final medical certification determination, however, rests with the Medical Examiner who is familiar with the duties, responsibilities, and physical and mental demands of CMV driving and non-driving tasks.

Article By Kathryn J. Russo of Jackson Lewis P.C.

For more biotech, food, and drug legal news, click here to visit the National Law Review.

Minnesota Inadvertently Allows Unregulated Intoxicating Cannabis Edible Products

As of July 1, 2022, unregulated intoxicating THC products derived from hemp have been legalized in Minnesota, apparently as the result of confusion by state legislators about the new law’s actual effect. Although the express intent of the statute is to allow the sale of products that contain so-called “non-intoxicating cannabinoids” to consumers in Minnesota, the new law contains a massive loophole that effectively legalizes all forms of THC sold in edible products at levels that intoxicate with only a bare minimum of regulatory oversight.

This surely cannot have been the goal of many Minnesota legislators who voted for the bill. In fact, the Minneapolis Star Tribune has reported that at least one senator in the state’s Republican-controlled Senate confirmed that he did not realize that the new law would legalize edible products with all forms of THC.

The Loophole

The new law changes section 151.72 of the Minnesota Statutes by defining “non-intoxicating cannabinoid” as “substances extracted from certified hemp plants that do not produce intoxicating effects when consumed by any route of administration.” The bill then incongruously allows for cannabinoid edible products to be sold to consumers in the state so long as the product contains no more than 0.3 percent of any THC and no more than 5 mg of any THC in a single serving, or more than a total of 50 mg of any THC per package.

Most states are now being forced to grapple with how to respond effectively to the problem of unregulated intoxicating hemp cannabinoids being sold openly and online. Edible products with intoxicating levels of hemp-derived delta-8 THC, delta-9 THC, delta-10 THC and THC-O Acetate are sold widely as legal and less-expensive alternatives to regulated marijuana products. States have employed various strategies to, by varying degrees, limit, regulate or prohibit intoxicating hemp cannabinoids, and lawsuits on the subject have been initiated in several states.

No state has created a loophole quite like what exists in Minnesota’s new law. Although Minnesota seeks, at least nominally, to only allow the sale of products that contain “non-intoxicating cannabinoids,” food and beverages that contain less than 0.3 percent THC concentration may nevertheless be intoxicating due to the large amounts that may be consumed easily.

To illustrate the problem of hemp products that contain less than 0.3 percent delta-9 THC concentration but are nevertheless intoxicating, consider this:

A typical energy bar of 60 grams would be allowed to have up to 180 mg THC if limited to 0.3 percent THC concentration by weight.
Regulated cannabis edible products, by comparison, typically may be sold only in a serving size of no more than 10 mg, with a limit of up to 100 mg per package.
A four-gram hemp gummy product, however, could have 10 mg of THC and still fall below the allowable concentration threshold.
Minnesota’s new law allows up to 5 mg THC per serving and 50 mg THC per package.

The intoxicating potential here is evident. One need only consume two servings to ingest the same amount of THC allowed in a standard regulated marijuana product serving. Ingesting 50 mg of THC will heavily intoxicate all but the most jaded stoner. Nowhere in the new law, however, is there any requirement to warn that the cannabis edible product may cause intoxication when consumed as suggested.

The Goal Informs the Solution

States should focus on the goal of prohibiting or properly regulating intoxicating hemp products that are currently sold as an unregulated and less-expensive alternative to regulated cannabis. We have previously warned that any state that decides to allow hemp-derived THC in edible products must necessarily grapple with tricky questions over how to regulate maximum serving size, active cannabinoid concentration per serving size, the number of servings per container, consumer warnings and similar questions to mitigate the risk to public health and safety. Cannabis and hemp industry leaders have likewise warned against “percentage” thresholds of cannabinoids as an appropriate measure for foods and beverages for the reasons described above.

In comparison to Minnesota, other states are proceeding in a more cautious manner. California’s recent Assembly Bill 45, for example, draws attention to the above-mentioned issues but acknowledges that more study is needed by the California Department of Public Health (CDPH) before implementing regulations are issued. The bill provides that CDPH “may regulate and restrict the cap on extract and may cap the amount of total THC concentration at the product level based on the product form, volume, number of servings, ratio of cannabinoids to THC in the product, or other factors, as needed.”

Analysis

Exacerbating the problem is the fact that product contamination, label inaccuracies and outright fraud are pervasive within the hemp cannabinoid market. Products often are marketed with misleading or false claims, and many fail to incorporate any explicit warning of intoxicating effects. Because the Minnesota statute incorrectly assumes that consumers will not become intoxicated from compliant cannabis edible products, no such warnings are mandated. This is a mistake.

It appears that better education around hemp-derived edible products could have led to more thoughtful legislation in Minnesota. This example may nevertheless provide a learning opportunity for other states that are studying how to regulate intoxicating hemp products.

Article By Ian A. Stewart of Wilson Elser Moskowitz Edelman & Dicker LLP

For more biotech, food, and drug legal news, click here to visit the National Law Review.

Tag: thc

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