10 Myths on CBD

As we enter 2020, cannabidiol (CBD)-infused products are understandably top of mind for many convenience retailers. Nielsen predicts CBD sales in mainstream channels reached as high as $80 million last year—and if legal cannabis sales grow to more than $40 billion by 2025 (as Nielsen anticipates), that would amount to more cannabis sales than beer (a $35 billion category in 2018).

The problem? In spite of the impressive sales predictions, cannabis products, including CBD, currently exist in a legal and logistical gray area. “The disconnect between what’s legally required and what’s being done could not be more stark,” said Scott Sinder, NACS general counsel and a partner at Steptoe & Johnson LLP.

To help clear things up, Sinder and other experts addressed 10 of the biggest misconceptions about the category.

MYTH: The Farm Bill Legalized CBD.

TRUTH: While many believe the Farm Bill of 2018 fully legalized CBD, it’s a little more complicated. The legislation indeed removed hemp (and CBD derived from hemp) from the Controlled Substances Act and defined legal hemp as containing less than 0.3% THC, but it maintained the U.S. Food and Drug Administration’s (FDA) authority to regulate hemp products, including CBD. And the FDA has been clear: It has not yet established a framework for CBD products to be approved. Meaning it remains illegal for retailers to sell products that (1) add CBD to food, (2) make statements regarding therapeutic or medical use or (3) are marketed as a dietary supplement.

“Any product that you ingest or any product that carries a health claim, either one of those is violating the FDA rules and theoretically, is illegal to sell,” said Sinder.

The agency is currently considering pathways that would allow for ingestible CBD products; however, there is no timetable for when—or even if—those regulations will come to fruition. Former FDA Commissioner Scott Gottlieb warned the process could take years.

In the meantime, the FDA has begun issuing warning letters to CBD manufacturers, instructing the companies to cease and desist distributing products in violation of federal law. At press time, the agency had only issued a handful of letters to manufacturers violating the health claim statute.

“It’s only the beginning,” Sinder said. “We’re in this unregulated land [and] you have products being sold that are technically illegal under federal law.”

MYTH: It is illegal for convenience retailers to sell any CBD product.

TRUTH: Not entirely accurate. Sinder said the FDA has purview over ingestible products and products making health claims, describing it as a Venn diagram: Ingestible products with health claims, ingestible products with no claims or topical products with health claims all violate current FDA rules.

But non-ingestible products for which no health claims are made? Those are safe and legal for any retailer to sell according to Sinder.

MYTH: Hemp products are subject to the same rules as CBD.

TRUTH: Depends on if the product contains CBD. Products like hemp seeds and hemp hearts do not contain CBD and have received the FDA’s generally recognized as safe (GRAS) approval.

It remains illegal for retailers to sell products that add CBD to food, make statements regarding therapeutic or medical use or are marketed as a dietary supplement.

GRAS approval “means there are no restrictions on use, except for health claims—those still have to be approved,” Sinder said, noting that hemp seeds are legally sold at major retailers like Whole Foods. “Hemp’s under FDA restrictions, it’s just that they’ve approved it.”

MYTH: The FDA is in charge of CBD enforcement.

TRUTH: Like many facts about CBD, it’s complicated. While the FDA does have authority to enforce its rules on CBD, it would be nearly impossible for the agency to do so by itself.

“The FDA has made statements that they could do nothing for six months but try to enforce the rules against CBD and [it would] barely make a dent,” Sinder said.

Instead, the agency has dedicated its resources toward developing CBD regulations and enforcing the most blatant violations of federal law. It also has made state and local governments aware of its stance on CBD. “I think that’s where there’s the most exposure for retailers [state and local],” said Sinder. “State and local officials have their own enforcement powers.”

MYTH: Only manufacturers are liable for CBD health claims.

TRUTH: On the question of who’s liable for health claims (or any violations of CBD regulations), manufacturers, distributors and retailers are all under FDA jurisdiction and could therefore be held responsible. Though to date, the FDA has only come down on manufacturers.

“In the near-term, I don’t expect any FDA enforcement against retailers,” Sinder said. “That could change tomorrow, but right now there’s no indication of any such activity. Now if a big retailer flaunts the rules, I could see the FDA doing something.”

MYTH: Marijuana is legal in my state, so CBD is too.

TRUTH: As with all cannabis regulations, there’s a patchwork of CBD regulations at the state and local level. Some states have laws on the books or an attorney general who has weighed in, others have done nothing about CBD. Sinder points out that interestingly, there have been attorneys general in recreational marijuana states (like California) who have asserted only marijuana, not CBD, is legal.

“It’s really a state-by-state issue,” he said. “You’re dealing with all these jurisdictions, kind of like alcohol. Then you have a separate overlay in municipalities. You have a lot of different regimes.”

Regardless of what—if any—state laws have been passed, Sinder said federal law is supreme, so most CBD products remain illegal.

Regardless of what—if any—state laws have been passed, federal law is supreme, so most CBD products remain illegal.

MYTH: CBD won’t cause a failed drug test.

TRUTH: Yet another thorny answer. Even though CBD lacks the intoxicating effects of THC/marijuana, full spectrum CBD products do contain low amounts of THC, explained David Dornak, partner at the employment law firm Fisher Phillips LLP. Because of this, it’s possible CBD use could lead to a failed drug test depending on the products being used, the frequency of use and the test itself.

“Employees could inadvertently violate a drug policy,” Dornak said.

MYTH: If recreational or medical marijuana is legal in my state, I can’t have a zero-tolerance policy.

TRUTH: Because marijuana is illegal under federal law, Dornak said most courts have upheld an employer’s right to screen for drug use prior to and during employment. Even in cases of medical marijuana, employers have won decisions in California, Colorado, Montana, New Mexico, Oregon and Washington. “Those cases determined that employers do not need to accommodate medical marijuana use,” said Dornak.

Technically there is no age restriction on CBD sales—but only because the FDA currently deems the majority of CBD products as illegal.

That said, more states are facing court cases or adding legislation that asserts employers cannot in fact discriminate against medical marijuana usage. Dornak encouraged retailers to stay informed on current state laws and pending cases when determining a drug policy.

MYTH: You have to be age 18 or 21 to buy CBD.

TRUTH: Technically there is no age restriction on CBD sales—but only because the FDA currently deems the majority of CBD products as illegal. “There are no standards on how you sell illegal products,” Sinder said, adding that while he’s not aware of any states setting age requirements on CBD, some may have or may do so in the future.

MYTH: CBD is not psychoactive.

TRUTH: For many, the appeal of CBD is that it offers many of the benefits of THC without the “high.” But according to Dr. Nick Jikomes, the principal research scientist for Leafly, CBD is technically speaking psychoactive. Unlike THC, however, it’s not an intoxicating substance. “It’s a common misconception,” he said.

Definitions are important here: Psychoactive means “a substance that affects the mind or behavior;” intoxicating means “to excite or stupefy, especially to the point where physical and mental control is markedly diminished.”

Jikomes likens CBD and THC to coffee and beer. “CBD is psychoactive but not intoxicating,” he said. “THC is psychoactive and intoxicating.”