Tenth Amendment Blog

AUSTIN, Texas (June 4, 2019) – Late last month, the Texas House gave final approval to a bill that would legalize hemp-derived CBD in the state. Enactment of this bill would not only open up markets in Texas, but it is also a crucial step given the FDA’s continued regulation and prohibition of CBD.

A bipartisan coalition of 21 representatives and senators sponsored House Bill 1325 (HB1325). The legislation would create a licensing and regulatory program for hemp and hemp-derived products. The legislation includes provisions that authorize the manufacture and sale of hemp-derived cannabidiol and its inclusion in food products. Under the proposed law, food or beverages containing CBD would not be considered adulterated.

The Senate passed HB1325 by a 31-0 vote. The House gave final approval on May 22 by a 140-3 margin. The bill now goes to Gov. Greg Abbott’s desk for his consideration.

Under current law as interpreted by prosecutors and police, CBD is illegal in Texas. Although it is widely available throughout the state, only patients with intractable epilepsy who are prescribed medical marijuana under the state’s Compassionate Use Act can possess CBD. People purchasing or selling CBD oil for any other purpose are breaking state law, according to a DA interviewed by the Fort Worth Star-Telegram.

Enactment of HB1325 would ensure the state would not regulate CBD and CBD products. This is crucial because despite removing the plant from the list of controlled substances late last year, the federal government still bans the sale of CBD products under FDA rules.

2018 Farm Bill and CBD

With the passage of the farm bill, the federal government now treats industrial hemp as an agricultural commodity instead of a controlled substance. While the DEA will no longer have the authority to regulate hemp, the provisions of the farm bill have no bearing on FDA rules and regulations regarding CBD. In fact, a section in the farm bill makes this explicit.

Section 297D, paragraph (c)(1) “Regulations and Guidelines; Effect on Other Law” states “nothing in this subtitle shall affect or modify the Federal Food, Drug, and Cosmetic Act.”

Practically speaking, the passage of the farm bill does not mean CBD will now be federally-legal in all 50 states, as some hemp supporters claim. In fact, the FDA still maintains a strict prohibition on the sale of CBD in the U.S.

To date, the FDA has only approved one medication with cannabidiol as an active ingredient – Epidiolex for the treatment of seizures. But the FDA classifies CBD as “a drug for which substantial clinical investigations have been instituted.” Under federal law, that designation means the FDA maintains full control over the substance and it cannot be marketed as a “dietary supplement.” The agency maintains that the sale of CBD or any food products containing the substance is illegal.

To date, the agency hasn’t changed its position on CBD. In a recent congressional hearing, FDA Commissioner Scott Gottlieb said he understands that Congress wants a pathway to CBD availability, but said “it is not a straightforward issue” due to the fact that the agency has approved CBD for treatment of epilepsy and it is ““subject of substantial clinical investigation.” Both of these factors prohibit CBD from being sold as a “health supplement” and from being added to food.

Gottlieb said, “the law does allow us to go through a regulatory process and go through a notice and comment rule-making to establish a framework to allow it to be put into the food supply.” The FDA held a public meeting on CBD in May.

In effect, the agency can continue to enforce these same rules even with the passage of the 2018 farm bill. While farmers can now legally grow hemp for commercial purposes, including the production of fiber, biofuel, building products, paper, clothes and even food products that don’t contain CBD, the sale of cannabinol or food products containing CBD remain federally-illegal, as it has been all along, unless the FDA changes its policy or Congress passes legislation specifically legalizing CBD.

IN EFFECT

If HB1325 is enacted, Texas would not interfere with the sale of CBD products regardless of continued federal prohibition. And without state cooperation, the FDA would likely have trouble regulating it in the Lone Star State.

Despite past and ongoing federal prohibition, CBD is everywhere. A New York Times article asserted that “with CBD popping up in nearly everything — bath bombs, ice cream, dog treats — it is hard to overstate the speed at which CBD has moved from the Burning Man margins to the cultural center.”

This was happening when both the DEA and FDA prohibited CBD. It will undoubtedly continue as long as market demand remains and states don’t interfere. The FDA can’t effectively enforce prohibition without the assistance of state and local officials.

According to the FDA, the agency prioritizes enforcement based on a number of factors, including “agency resources and the threat to public health. FDA also may consult with its federal and state partners in making decisions about whether to initiate a federal enforcement action.”

Even with both the FDA and DEA theoretically enforcing federal laws and regulations banning CBD, state and local action have already nullified federal prohibition in practice and effect. There’s no reason to think that won’t continue as long as states maintain the same stance on CBD as they did under the 2014 farm bill. Simply put, the federal government lacks the personnel and resources to crack down on CBD – even if the FDA wants to.

WHAT’S NEXT

Gov. Abbott will have 20 days from the date HB1325 is sent to his office to sign or veto the bill. If the takes no action, it will become law without his signature.