Anyone even vaguely familiar with cannabis law knows it’s fraught with complications and contradictions. Now, in light of recent developments, the legal status of cannabidiol, commonly known as CBD, the non-psychoactive medicinal compound derived from cannabis, has never been hazier.
The upcoming federal farm bill being considered by Congress (both a Senate and House version of the bill currently exist) may legalize hemp but, when combined with the U.S. Food and Drug Administration’s approval of the first-ever pharmaceutical drug containing CBD, it may actually pave the way for Big Pharma to take over the CBD market — and the rest of the medical marijuana market — nationwide.
On June 25, the FDA approved London-based GW Pharma’s Epidiolex, a drug containing CBD as its active ingredient, to treat two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients 2 years old and older (CannaNews, May 23). On the surface, that may seem like a victory for medical marijuana (MMJ) advocacy but, in reality, it only further muddies the legal status of CBD. In accordance with the Federal Food, Drug and Cosmetic Act, the FDA considers any product for human consumption containing the active ingredient (e.g., CBD) of an FDA-approved pharmaceutical drug (e.g., Epidiolex) “adulterated and misbranded,” according to a Q&A posted on the FDA website.
“This is just one more way that our products are illegal at the federal level,” says hemp farmer and activist Veronica Carpio.
“There is an exception,” the FDA Q&A states, “if the substance was ‘marketed as’ a dietary supplement or as a conventional food before the drug was approved… However, based on available evidence, FDA has concluded that this is not the case for THC or CBD… Interested parties may present the agency with any evidence that they think has bearing on this issue.”
Jonathan Miller, lead counsel for the U.S. Hemp Roundtable, a coalition of dozens of hemp companies and one of many hemp industry lobbying groups, says he’s been gathering such evidence and hopes to change the agency’s mind.
But for the time being, the FDA’s press release announcing the approval of Epidiolex made it clear they aren’t backing down from that position. “[W]e are prepared to take action when we see the illegal marketing of CBD-containing products with serious, unproven medical claims,” it reads in part. “Marketing unapproved products, with uncertain dosages and formulations can keep patients from accessing appropriate, recognized therapies to treat serious and even fatal diseases.”
In fact, Stanley Brothers, the Colorado cannabis company best known for their high-CBD cannabis strain, Charlotte’s Web, credited with helping children control seizures when conventional pharmaceuticals failed, received a warning letter from the FDA last year regarding the medical claims made about their CBD products. Stanley Brothers is one of the member companies represented by the Roundtable.
Now that Epidiolex has been approved, the FDA will prepare a “medical and scientific analysis” of the new drug for the U.S. Drug Enforcement Agency, which may then choose to move CBD from Schedule I in the Controlled Substances List to Schedule II-V, meaning only pharmaceutical companies, doctors and pharmacists will be allowed to legally produce, prescribe and distribute CBD, respectively, in compliance with federal law. Every step of the process would have to comply with FDA standards, and everyone in the supply chain (growers, extractors, retailers, etc.) would have to be registered with the DEA.
The DEA could also choose to create a new drug code exclusively for Epidiolex under Schedule II-V, DEA spokesperson Barbara Carreno explains, leaving all other forms of CBD just as federally illegal as they are now. That’s how the DEA chose to deal with Marinol, an FDA-approved drug containing synthetic THC, the main psychoactive compound in cannabis, and it could do the same with any other cannabis-based drugs the FDA approves in the future.
Carreno says “there is precedent for regulating various compounds derived from the same plant differently,” noting the various opioids derived from poppies range from heroin in Schedule I to oxycodone and morphine in Schedule II to codeine cough syrups in Schedule V. The only thing that’s certain is that Epidiolex will not go in Schedule I because the FDA has confirmed that it has medical uses. Controlled substances in Schedule II through V are classified according to their risk of abuse and overdose, with Schedule II having the highest risk and V having the least.
Carpio, the hemp farmer and activist, believes the FDA approval of Epidiolex could give the federal government the strongest legal grounds yet to justify a crackdown on CBD (and cannabis in general) while simultaneously laying the groundwork for Big Pharma to take over the MMJ industry nationwide. Several other local hemp farmers share Carpio’s concerns.
“The pharmaceutical companies would have history on their side to say [CBD] is a product only they should be able to work with and produce and manufacture,” Luke Johnson, founder and CEO of Cloud CO Farms in Alamosa, says. “And the FDA could slap all these huge rules and regulations that have to be met to be approved to work with it.”
According to Justia.com, which makes legal records available to the public, GW also holds roughly 100 patents related to the medical efficacy of cannabis, covering cannabinoid extraction processes, cannabinoid placebos, dispensing mechanisms for cannabinoid drugs, and a range of cannabinoid-based drug formulas used to treat almost everything under the sun, including schizophrenia, mood disorders, epilepsy, Alzheimer’s disease, psychosis, bone disorders, inflammatory bowel diseases (e.g., Crohn’s disease), tumors, bulimia, obesity and several types of cancer. Each patent potentially provides another legal avenue for GW to shut down its competitors already operating under state hemp and MMJ programs like Colorado’s.
“I think the whole way GW set this thing up is to have a monopoly,” says Dani Billings, owner of LoCo Farms in Longmont and co-founder of the Colorado Hemp Project. “They want everybody underneath their hand.”
GW also championed a bill last legislative session that allows doctors in Colorado to prescribe medications derived from cannabis if they are FDA-approved (e.g., Epidiolex). That bill passed the Colorado Legislature with 94 votes (out of 100 votes total in the House and Senate) in favor and was signed into law by Gov. John Hickenlooper on June 4, opening a loophole for GW around another Colorado law that prevents doctors from prescribing “marijuana” to patients.
The Cannabist reports, “forecasts have put Epidiolex’s peak annual sales between $1 billion and $3 billion.” Epidiolex is expected to cost between $2,500 and $5,000 per month according to analysts consulted by The New York Times, yet local medicinal hemp farmer Jan VanDenBerg says her products could deliver the same dosage of CBD for roughly a tenth of those prices. Unlike other CBD and MMJ products, however, Epidiolex may be covered by private health insurance, but the ever-rising costs of insurance may only create another barrier to access.
Fortunately for those in the local CBD business, the Colorado Hemp Foods Bill was signed into law earlier this year, and it takes the exact opposite position of the FDA, asserting explicitly that CBD is a dietary ingredient and products containing it should be regulated as food products. Carpio, who helped draft and advocate for the bill, says it could be a turn-key solution for all the other states to copy to protect their CBD markets from the feds.
Defense attorney and first chair of the Colorado Bar Association’s Cannabis Law Committee Lenny Frieling says the law may protect Colorado from an FDA or DEA crackdown on CBD on the basis of states’ rights, but it could take a lawsuit, or several, to finally sort it out.
The difference between regulating CBD as a drug or a food is a massive one for farmers like Johnson and his family, who own and operate Cloud CO Farms.
Cloud CO grows and extracts CBD from medicinal hemp and has been working on plans to begin producing and retailing their own CBD products as well. But if CBD becomes regulated as a drug, those plans will go out the window. Unable to bear the costs of bringing their CBD extraction facilities up to FDA standards, Johnson says Cloud CO would likely have to stick to growing hemp only and contract out their CBD extraction and the production of their products to an FDA-compliant facility.
Other companies, however, have been preparing for that eventuality. Stratos, a cannabis company based in Pueblo West, already produces THC- and CBD-infused products using pharmaceutical-style, FDA-approved methods at their manufacturing facility. And Folium BioSciences, headquartered in Colorado Springs, is currently going through the certification process to become approved to produce pharmaceutical-grade phytocannabinoid products with the Colorado Department of Public Health and Environment, which has standards that mirror the FDA’s.
“Whatever the delivery system is, we’ll be prepared to meet those demands,” says Folium spokesperson Juanita Ramos. Ramos helped advocate for the Hemp Foods Bill and agrees with Johnson and Carpio that CBD should be regulated as a food product, but Folium’s leadership wants to be prepared for any eventuality.
“All we can do is keep our heads down and keep doing what we do,” she says. “We’re concentrating on those kids and people who need [CBD].”
Johnson says regulating CBD as a pharmaceutical substance would be a betrayal of “the small business owners and farmers who have already put in millions and millions of dollars and sacrificed a lot of time and effort to get the industry to the point where it is today.”
“They would get crushed by something like that, so it would be pretty hypocritical to see something like that happen, but that wouldn’t come as a surprise at the same time,” Johnson says. “The hypocrisy is kind of peaking right now.”
All the Colorado hemp farmers the Indy spoke with agree that, rather than being put in a new drug schedule, CBD should be removed from the list of Controlled Substances entirely because it carries little to no risk of abuse or overdose.
“Descheduling will really open it up to anyone who wants to participate, and they wouldn’t have burdensome requirements that they have to follow because it will be treated as a regular agricultural crop,” Johnson says. “That would finally allow farmers and producers to operate in a more fair and competitive landscape to all the international people that we compete with currently.”
Johnson hopes the upcoming farm bill will accomplish just that. The Senate version of the bill contains an amendment to federally legalize hemp proposed by Senate Majority Leader Mitch McConnell, R-Kentucky. The bill passed the Senate in an 86-11 vote with both Colorado senators, Democrat Michael Bennet and Republican Cory Gardner, voting in favor of the bill.
Next, the Senate will have to reconcile their version of the farm bill with the version that passed the House of Representatives on June 21, which doesn’t mention hemp at all, before the bill can go to the Oval Office for President Donald Trump’s signature. Colorado Congressman (and Democratic gubernatorial candidate) Jared Polis previously supported standalone legislation mirroring McConnell’s hemp amendment that failed to pass the House.
Technically, McConnell’s amendment removes “hemp” from the definition of “marihuana” in the Controlled Substances Act, and 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.”
Miller and Colleen Lanier, a spokesperson for the Hemp Industries Association, an industry trade group, believe that language should be sufficient to protect all hemp-derived CBD products from federal interference.
Carpio disagrees, however, pointing out a paragraph of the amendment added in committee:
“(b) EFFECT ON OTHER LAW.- Nothing in this subtitle shall affect or modify-
“(1) the Federal Food Drug and
Cosmetic Act (21 U.S.C. 301 et seq.); or
“(2) the authority of the Commissioner of Food and Drugs and the Secretary of Health and Human Services under that Act.”
Combined with the approval of Epidiolex, Carpio says that paragraph turns the bill from a victory gift for the CBD industry into a Trojan Horse. Frieling agrees with Carpio’s interpretation of that paragraph, but says it’s impossible to know exactly how the FDA will go about enforcing the FD&C Act in regard to CBD.
Billings says she will not support the bill if that paragraph “has anything to do with taking CBD away.”
Miller, an attorney, believes the FDA’s enforcement efforts regarding CBD will only be focused on companies making unproven medical claims about their products, which he fully supports, rather than a full-blown crackdown.
“I just don’t see the FDA getting into that battleground,” Miller says. He believes there should be two paths available for consumers to access CBD — as a pharmaceutical drug or as an over-the-counter food product or supplement — and if the FDA tries to block the latter path, he and the Roundtable will be prepared to sue. “We haven’t made our case yet because we don’t need to,” Miller says. “But if we have to, we will.”
But Carpio is highly skeptical of both the Hemp Industries Association and the U.S. Hemp Roundtable’s sincerity, pointing out the former opposed the Colorado Hemp Foods Bill and the latter represents several large companies, some of them foreign, that already have the facilities and resources to produce CBD products in compliance with FDA pharmaceutical standards.
“They claim to represent the small farmers, but they don’t,” says Carpio, also noting that it costs $25,000 a year to get on the Roundtable’s board of directors and $10,000 for voting rights in the organization. “They’re a pay-to-play group trying to control the message, and it’s a deceptive message.”
Miller says all the companies represented by the Roundtable either have headquarters or subsidiaries in the U.S. and “have a significant stake” in the American hemp market.
But Carpio says the FDA wouldn’t have to crack down on, nor would GW have to sue, every company making CBD products — going after a few big companies, like Stanley Brothers, could be enough to scare off smaller ones that can’t afford to get tied up in litigation.
McConnell’s amendment also contains a provision barring drug felons from participating in the hemp industry — a move Carpio called outrageous and discriminatory, pointing out that people of color are disproportionately convicted of drug crimes in the U.S. Carpio herself was convicted of a felony for possessing marijuana in 2015.
“That’s double jeopardy — I already got punished. I’m going to challenge that. Somehow, I’m going to find a way to fight it,” Carpio says. Adding sarcastically, “I’d like to see a jury convict me for growing hemp. I’d like to see a jury convict me for growing something completely harmless.”
Billings and Ramos said they would support barring people from the hemp industry convicted of serious drug crimes involving more dangerous substances, but not for marijuana-related offenses.
“They’re lumping everyone into one group, as if, if you smoke weed, you might as well be doing heroin,” says Ramos. “They’re talking about people like Veronica [Carpio]… They want to cut her out of the industry? After everything she’s done to move the industry forward? No, I don’t agree with that.”
“Everyone makes mistakes in life, and everyone deserves a second chance,” Billings says. “A lot of those [felonies] are silly marijuana charges, and that shouldn’t keep anyone from working with hemp. It isn’t even a drug, anyway. It doesn’t get you high.”
Before she learned about the language reinforcing the FD&C Act and barring drug felons from the industry, Billings spoke very optimistically about the new farm bill.
“This is going to change people’s lives for the better everywhere,” Billings said.
Billings believes, if federally legalized, hemp could be the crop that brings success and stability back to family farms across the country, especially because of its versatility. Hemp can be used to produce everything from biodegradable plastics and building materials to textiles and rope to food, medicine and biofuels.
“This plant is here to do good — to be a positive conscious force,” Billings says. “Everybody has health issues. Everybody needs houses. Everybody needs clothes, and everybody needs food. And this plant can take care of all of that. Once this plant has an opportunity to touch people’s lives, Lord does it make a change.”
Billings was one of the first Colorado farmers to begin growing hemp after the 2014 farm bill authorized states to create industrial hemp programs for research. Today, over 40 states have passed legislation creating such programs and 19 are now actually producing hemp, according to Lanier at the Hemp Industries Association.
In the years since the last farm bill passed, Colorado’s hemp industry has expanded significantly, producing more hemp than any other state. According to Duane Sinning, Industrial Hemp Program Manager at the Colorado Department of Agriculture, close to 12,000 acres of hemp were planted in 2017 in Colorado, compared to states turning out the next-largest hemp harvests (like Kentucky and North Dakota) that planted around 3,000 acres. This year, Sinning says Colorado has planted over 28,000 acres of hemp so far, compared with 16,000 acres of hemp in Kentucky, the second-largest crop in the country.
Despite hemp’s relative success in Colorado, because of its Schedule I status, those in the industry still face unique challenges and restrictions. Billings and Johnson say they have been denied banking services and credit card processing, had multiple bank accounts shut down on them, and they pay extra for the accounts they do have because they are considered high-risk. Plus, nothing they grow, produce or sell can cross state lines or they risk having it seized by the DEA. All this for a plant that doesn’t get you high.
Perhaps the most important benefit hemp farmers will receive if the Senate’s farm bill becomes law is access to federal crop insurance. Billings said hail storms have already destroyed one of her family’s greenhouses and several acres of their hemp crops this year, and without crop insurance all of that is simply time wasted and money lost. That heightened economic risk alone deters farmers from growing hemp and inhibits the industry’s growth substantially. “We’re on Mother Nature’s turf, and she’s the ultimate decision-maker,” says Billings.
Thus far, the majority of Colorado’s hemp is grown for CBD because of a lack of firms capable of processing hemp into industrial products, Johnson and Billings say, although the industrial sector has been growing. Billings says roughly half of the 7 million pounds of hemp she expects to produce this year on the 4,000-plus acres owned by her family and the farmers they partner with will go to CBD extraction and the other half to industrial production, whereas the majority of the 1 million pounds they grew last year went to CBD extraction. Miller, the Hemp Industries Association’s Lanier and all the farmers the Indy spoke with agreed that the industrial hemp sector will expand dramatically if McConnell’s amendment becomes law, which could be a massive boon for Colorado’s economy.
Many Colorado hemp farmers (like Folium and Cloud CO) grow uniquely bred strains of high-CBD, THC-free cannabis used only for medicinal, not industrial, purposes. Their plants are short and bushy with thin stalks and thick buds; they resemble high-THC plants, and farmers use the same methods to grow them.
Industrial hemp, on the other hand, is tall and skinny with thick stalks, resembling something more like bamboo; it is never allowed to fully mature and flower, and contains much lower CBD content (usually 3 to 4 percent) than Folium or Cloud CO’s medicinal plants. That CBD can still be extracted and used for medicinal products, but it isn’t nearly as cost-effective to do so.
As the House and Senate hash out the final version of the farm bill and the DEA awaits the FDA’s report, the entire cannabis industry, from farmers and retailers to patients and consumers, braces for impact, hopeful the politicians and bureaucrats will act in their favor.
“My prayer is that our leaders will understand that not only is this good for the economy and job creation,” says Ramos, “It’s also good for humanity.”