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Is CBD Legal?


Our first full episode is online, and it’s a goodie—at least we think so.

We interviewed Hoban Law’s managing attorney, Garrett Graff about the legal ambiguity surrounding hemp, importing CBD, and merchant processing. You can find our first episode on iTunes or wherever you get your podcasts.

Full Transcript:

Hannah: Hello and welcome. You are listening to Empires of Joy, a podcast about CBD. In this episode, I’ll be interviewing Hoban Law’s managing attorney Garrett Gaff. Hoban is one of the largest law firms in the U.S., specializing in cannabis and CBD law. They not only keep up to date with the ever changing legal landscape of the cannabis industry, they’re also an active representative for stakeholders in legislature. When we’re talking about CBD in this episode, we’re mostly talking about that which is derived from hemp. Before we begin, I want to provide a bit of a timeline for the legality of hemp. Hemp started to be grouped with marijuana in the 1930s and in 1970 it was classified as a schedule one substance by the DEA on par with heroin. It was legal to import certain parts of the hemp plant, the parts used for fiber primarily, but it was illegal to grow it in the US.

Hannah: In 2014 the government launched a pilot program that allowed certain universities, scientists and farmers to grow hemp and some states growing hemp was legalized, but on a federal level it was still, for the most part, prohibited. In December of 2018 the most recent farm bill was signed in. It was a hemp provision that legalized the growth of hemp in all 50 states. Even though growing hemp is legal, there is still ambiguity around cannabinoids such as CBD being used as food additives or supplements. The FDA held its first discussions regarding hemp regulation on May 30th shortly after this interview was recorded, Garret attended these discussions. So you’ve been a pretty active voice in in legislature and lobbying and things like that. Were you an active voice in the hemp provision of the farm bill and what did that look like?

GarrettYes. With respect to the farm bill, you know, there’s a number of stakeholders that have been at the table there. And so working through, uh, you know, our legislators here in Colorado and I know a number of other attorneys and other public engagement industry stakeholder groups have taken large steps to be involved with the making of the farm bill. And a lot of those were driven through you Mitch Mcconnell’s office, obviously. Uh, and so there’s a lot of input taken in, you know, I think, uh, congress and Senator Mcconnell himself and you know, other typical supporters, you know, Governor Polis, formerly representative in Congress here in Colorado, uh, as well as Blumenauer and others in Oregon. Uh, you know, they all came together to, to find some bipartisan policy as part of the farm bill. I think we all recognize that the Farm Bill was perhaps the easiest point of entry to insert some additional hemp language. I think, you know, you have an existing state regulatory systems like Colorado, Kentucky, and Oregon, you can pull from to create that framework. And so, you know, to some extent a, it was how can we do this in a good, uh, you know, build a big and solid foundation for hemp. Uh, but, but without reinventing the wheel as much as possible

Hannah: And you got to be in some of those meetings, you kind of, did you get to speak on behalf of stakeholders or was there a representative from Hoban that did that?

GarrettSo, you know, we worked with stakeholder groups, uh, and other industry stakeholder groups like HIA and Brown table, uh, you know, a number of others like that and so many cases, you know, there were folks in DC actually doing a lot of those meetings, but we would certainly speak with legislators, speak with stakeholder groups, provide some directive and some thoughts and suggestions on content, uh, where appropriate, where applicable. Uh, you know, as you would imagine, uh, it takes a lot to make legislation. We do a lot of work here legislatively in Colorado. Uh, I’ve spoken at the USDA listening session already this year as part of their implementation of the farm bill. I’ll be speaking again and again this Friday, uh, at the, uh, for the FDA’s listening session in stakeholder engagement session. Uh, so it’s a long process. It’s very complicated process. So some extent you get what you ask for in terms of, uh, you know, how involved you are or aren’t in, in that rule making, so

Hannah: Definitely. And where do you see the FDA’s implementation of the farm bill going in the next maybe six months to a year?

GarrettUh, I think it’s going to be a lot of status quo. I think a lot of people expect the FDA to act quickly and virtually no government agency, especially the FDA does not act quickly. The analogy I typically use is vape products. Baby products hit the market place, what, 20 years ago, give or take. Yeah. When do you think that they were first finally regulated by the FDA? I don’t know, Is that a couple of years ago? 2016. Yikes. So vapes. So what happened with vapes was that they hit the market similar to this, you know, the FDA recognize an issue of how are these regulated. There were proposed regulations issued within a couple of years and in those proposed regulations sat dormant for 10 plus years. Wow. Those people were following those proposed regulations of course, right? Yep. In anticipation of final ones, uh, but you know, with that in mind, final regulations that it took over 15 years to put that in place.

GarrettSo in terms of the next six to 12 months, uh, I’m not overly optimistic that we’re going to see definitive change at the FDA level. I think we will continue to see good and increasingly better rhetoric from the FDA. Yeah. We may get some glimpses as to what the FDA is looking to do, which is helpful. But in terms of actual definitive change final regulations, I’m not sure it’s going to happen quite that quickly, which may not in fact be a bad thing. Right. It gives the industry more time to, to flourish and continue to progress. Now, of course that comes with obstacles like payment processing and third parties that want to say, you know, for example, the TTB that wants to say, hey, we can’t approve malt beverage formulations because the FDA is still unclear. So there are still some obstacles there, but I’d rather have it that way, generally speaking, rather than have the FDA act too quickly. Yep. and too reactively, and then have to walk things back down the road.

Hannah: And what, what would that look like if they acted too quickly would that look like classifying CBD maybe as a drug?

GarrettWell that’s when we could be one issue. Right? That’s one of the, one of the topics of the forefront right now is you have epidiolex which is a, an approved prescription drug. Yup. It’s a formulation based upon CBD isolate. So one of the larger issues for consideration is where is the appropriate placement for CBD isolate and you know, perhaps to a slightly lesser extent other types of hemp drive extracts like full spectrum or broad spectrum, et cetera or other isolated cannabinoids that are under investigation but aren’t quite as advanced as CBD is. You know, how do you create the, what we’ve called swim lanes, you know, we’ve been referring to the, this idea of swim lanes for several years now and you know, using that analogy of swim lanes, you hit, there’s going to be a pharmaceutical one and we’re, you know, we’re implementing the supplement and food and cosmetic space, right?

GarrettThe over the counter one, but what is the dividing lines between the swim lanes? That’s the crucial piece. And that’s what we have to figure out right now. And so, I mean, there, there’s ideas that have been thrown around, you know, that you can use isolate up to x number of milligrams and a supplement. Uh, some of course would say, hey, farmers stay out, you know, all of these should be available supplements. You know, of course farmer’s interests are likely to be as restrictive on supplements and cosmetics and foods as possible. Yeah. So it’s trying to navigate all those competing interests to find a resolution, uh, that, you know, everyone can, uh, can deal with. You know, it may not be perfect or ideal. That’s, that’s government regulation. Right? And so it’s trying to figure out what the most sensible approach and pathway forward.

Hannah: Yeah, that makes sense. Um, I want to ask kind of a very simple question, but just because I feel like the answers that I’ve read and heard, um, are feel insufficient and that is, is CBD legal and please explain it to me like I had no, nothing at all. 

Garrettno, it’s a great question. It’s a loaded question. Ultimately what it is, uh, so the way I like to think about it is in two parts you have the, uh, is it a controlled substance? Meaning we’re talking about orange jumpsuits, DEA, criminal, uh, yes, it is legal and it is not a controlled substance. But then you have the second component, which is the regulatory component or the FDA component. Yeah, right. I can refer to these as DEA and FDA. On the FDA side, the industry argues that hemp derived, you know, hemp derivatives including hemp-derived cannabinoids even if in different potencies have been available commercially for some time. Yeah. The FDA has indicated that they’re not so convinced now that’s an issue that if either side felt so strongly, uh, about and wanted to go resolve this in the course, we could go litigate. As with most litigation, I think a number of folks understand that litigation is not clean.

GarrettIt’s not simple. Right? And so because of that, it may make more sense to seek constructive resolution, which is precisely what this Friday, uh, is a startup. Right. Uh, and so in terms of is CBD regulatory component, I would say the answer to that question is still unclear. Yeah. But, that – that component, we’re not talking about orange jumpsuits and DEA and whatnot. We’re talking about is this an appropriate and permissible ingredient that’s intended and safe for human and animal and other consumption. It’s the health department, so that’s why you’re seeing the flurry of activity at state and local levels across the country is more so a quarantining of products or taking products off of shelves, not arrests. Right. You know, so the, there, there’s a criminal DEA component and a civil and FDA component. Now, of course, that’s even further complicated at the state level because states are still trying to catch up.

Garrett: Yeah. You have several states like Colorado, Oregon, and Kentucky that led the way into the 2014 farm bill. So they already have established what I like to call robust and affirmative states, green states, if you will. Right. And so there’s probably, you know, 10 give or take maybe a few more now with a recent legislation passed in the past several weeks that are, that will be getting there soon. And that’s why you’re seeing retailers like Walgreens and CVS, target certain states upfront. Yeah. At the other end of the spectrum, you have states like South Dakota who just vetoed hemp legislation or Nebraska. All the Nebraska just last week passed some legislation, uh, and then a couple other states, Ohio, which is still trying to figure out what it’s going to do and Idaho. Those days are generally more adverse. They’re going to need to catch up. They have the largest learning curve left of all the states.

GarrettAnd then you have a bunch of states that are somewhere in the middle of the Yellowstone. Yeah, some of the grey areas. And some of those states have hemp laws, but they’re only related to cultivation or they’re limited. They’re waiting for DEA approval even though DEA doesn’t need to approve anything. Yeah. There’s a lot of absurdities there, uh, in those yellow states. And now with the greater direction and more robust direction from the 2018 farm bill. And not just direction but compulsion. Actually, this is one of the things I love about the 2018 farm bill. If states don’t act the USDA governs, so in South Dakota, their governor just vetoed a piece of legislation if they’re, if they don’t pass legislation in 2020, then guess what a South Dakota farmer can go straight to the USDA and bypass the South Dakota government altogether. And so I love that little compulsion provision and what that’s doing is it’s compelling state legislatures.

GarrettNow in 2019, although we’re starting to get to the end of most state legislative sessions, and then this will ramp up again and uh, early 2020, because we’ll have the benefit of the USDA regulation at the end of 2019. So we’re going to see all these states catching up and it’s going to come in a flurry and that’s probably going to come by mid next year, hopefully most in advance of the planting season. There may still be some that aren’t quite yet ready for planting next year and may end up looking at 2021 but that’s where a lot of the action is right now is FDA and USDA are moving slowly. Uh, states can move more quickly relatively speaking. And so hopefully we can convert a number of yellow and red states and the green states in the coming months and over the next six to 18 months.

Hannah: Yeah, for me though, like the lack of record regulation is a little bit frightening, especially when we think about how vapes took so long. Um, you have a lot of toxic ingredients that were being put into vape oils that people were consuming. And some consumers in the CBD world get a little bit nervous about the lack of regulation.

GarrettWell, I understand that. But I also think too, the, the, the premise of lack of regulation to some extent, there’s almost a, a monster of our own creation in the sense of is that actually a truth? Because you look at, for example, in Colorado, the, you know, the manufacturers of products and the processors and extractors of products in Colorado. Yeah. Obtain and receive the same registration that the manufacturers of Pepsi do. Oh Wow. So the same food standards, the same FDA regulations, the same GMPs that the manufacturers of Pepsi have to abide by. So to do hemp product manufacturers. So when people say hemp is unregulated, I, you know, without suggesting that it’s a, uh, an unknowing or, or uneducated approach, I think it’s again, born out of a misinformation or lack of information out there. I think they’re actually far more regulation than people give credit to.

GarrettNow there, are there uncertainties and ambiguities? Absolutely. And that’s what we’re trying to curate. And so the FDA is going to deal with, but I will tell you that most manufacturers, or at least most of the good actors are already adhering to existing mechanisms. Again, we don’t need to reinvent the wheel. Yeah. Quality control, product safety, these aren’t new concepts. We’ve been dealing with these concepts and products, you know, throughout the course of history. Yup. Right. So there are so many things that by extrapolation we can use from the manufacture of conventional foods and conventional supplements that don’t need to be changed. Testing protocols. There’s testing companies that have been been testing foods for decades that have all the equipment and all the knowhow and experience the test hemp, right? Contaminants, pesticides. Yeah. Guess what? There’s other agricultural commodities. There’s other foods being made out of agricultural commodities. Yeah. Think about corn in high fructose corn syrup. Yeah. So again, there – there are analogies. There are extrapolated application that can be used that many people are already using now in terms of delineating that, you know, putting pen to paper and committing that in every state’s laws and by the FDA, that’s what we’re in the midst of right now. Yeah. But you know, make no mistake about it. I think that there’s more regulation than people give credit to. Yeah. Um, or at least more regulatory standards being adhered to than people give credit to.

Hannah: Yeah. So, and, and a certain amount of self regulation, especially when it’s grown in the state of Colorado as if it’s imported from say, like China or some countries in Europe would, we might not see the same level of regulation in those products?

GarrettWell, again, it just depends. Right. And I think it’s more so the lack of transparency that may be what actually leads to this fear and this notion of lack of regulation. Yeah. But again, transparency yes, that could mean no regulation, or the lack of transparency could. But lack of transparency could also mean simply poor dissemination of information, right? Yep. So that, that those two don’t necessarily equate to one another. Lack of transparency equals lack of regulation. But your points are well taken that, you know, what are the standards in other countries? But furthermore, how are those products coming into the country? Right. Customs is still dealing with that. Right. And Yeah, and how you distinguish hemp from marijuana. So I would still suggest that the large majority of products available domestically right now are, uh, domestically grown and sourced just because there is that gatekeeper hurdle at the, at the customer level too.

Hannah: So it’s interesting how, I think when, when the farm bill passed, everyone just got really excited. They thought it was going to fix all the problems.

GarrettWell not just fix it but fix it overnight. Yeah. December 20th comes and everyone I think went to bed thinking we’re going to wake up tomorrow, the dawn of a new era, everything is going to be fixed. And yes, don’t get me wrong, it’s the dawn of a new era. Yeah. But it’s just taking a lot more time than I think some people hoped for and expected in terms of actually realizing, uh, the fruits of that era.

Hannah: Yeah. But that’s just the speed of governmental entities. It’s your tax dollars at work. Exactly. Um, so I’ve gotten to read some of the FDA letters that are being sent to CBD companies and you know, for a variety of, of different issues that they’re kind of confronting companies on. What, what would you say are some of the biggest mistakes, legal mistakes that CBD companies are making right now, especially when they’re just getting started?

GarrettThe golden rule is disease claims. This is not a hemp specific, uh, issue. This is a all products that are not approved drugs issue. So Ginkgo Biloba, calcium, vitamin C and hemp don’t make disease claims. If you are marketing yourself or you’re linking to Harvard studies or you’re including testimonials, any, any information that is presenting a narrative that your products treat pain, cancer, epilepsy, inflammation, the list goes on and on constitutes an impermissible disease claim. Yup. Basically the FDA concludes that to protect public safety, they do not trust companies with a profit motive to appropriately disseminate those sorts of information to consumers so those consumers can discern whether that product will actually treat the pain, cancer or epilepsy. Because guess what, just because I use the product and I experienced some relief for my inflammation doesn’t mean you would.Yup. And because there is no objective standard there and it has not been reviewed by the FDA, the FDA, doesnt trust that company to make that statement.

GarrettAnd so you can see that common thread throughout all of the letters that the FDA has issued in the statements by former Commissioner Gottlieb in the past few months they’ve said, hey, the FDA will continue to exercise discretion except with respect to those that are continuing to make disease claims. So we all know that we have this issue of is you know, is CBD or is hemp extract a permissible ingredient. Again, this FDA component we talked about a little while ago, step that issue to the side for now, that’s what we’re going to be talking about Friday and in the coming months. Yeah. That issue aside, how are these companies, these manufacturers, these distributors otherwise compliant with all the regulations? And so the FDA again is identified the disease claims as the biggest issue. Uh, now you know, are there labeling mechanism or labels and labeling inquiries that need to be engaged in?

GarrettSure. How are you appropriately labeling your product? As a supplement or a cosmetic maybe as a food, um, you know, how are you identifying your ingredients? Are you calling CBD hemp isolate or calling it hemp extract and obfuscating what it really is? Well, guess what? You have a duty and obligation to be truthful and not misleading consumers. Yep. So by calling CBD something that’s not CBD, is that problematic in and of itself? Are you complying with state regulations? Indiana’s Qr code that’s now being adopted by Utah and Texas and Florida that you know, requires you to, to make available via Qr code a batch data of certificates of analysis, you know. So there’s a number of things there that, that companies can do. But those are the primary ones that I see is that, you know, everyone’s so eager to sell and wants to see the dollar signs rolling in and um, you know, they, they cut corners in that respect.Yeah. I understand why. Right? You know, there’s a, most people are coming into this industry with a personal connection, a personal experience. Yeah. That’s totally fair. But we have to understand that we can’t have our cake and eat it too. We can’t expect the FDA to, you know, uh, stay hands off while we figure this out constructively. And also treat us differently and give a special treatment. Yeah, different from vitamin C and calcium and all these other products.

Hannah: We’re going to take a quick break from this interview for a segment with Max Polling, manager of bulk and custom sales at Joy Organics. This, is Max Facts.

Hannah: Hey Max, can police dogs smell CBD?

MaxCanines can absolutely smell CBD. However, when it comes to alert dogs or you know, marijuana alert CBD is not the exact element that they’re scenting on. Dogs can smell almost 10,000 times better than humans. And so if we talk about, you know, a beverage or something of that nature, they’re going to smell CO2, water, lime, all the other components that are in a sparkling beverage, for example. Whereas when they alert on marijuana, they are looking for a cannabis terpene profile range that’s rich in Beta-Caryophyllene. And so more refined CBD products that are lower in Beta-Caryophyllene may not carry the same scent aroma the dogs are trained on, however they can alert on any hemp based products as they’re a cannabis strain derived.

Hannah: And now back to Garrett.

Hannah: So when it comes to health claims, and I feel like we’ve tried to navigate this and we’ve definitely made mistakes along the way, but how do you get around that? Um, so how do you treat, how do you treat a product as a supplement? And then also is there a way to share testimonials without getting in trouble?

GarrettYes. I mean it’s a great question, right? But how do you get around it necessarily suggest that there’s something that you have to get around, right? Which is of course this golden rule. Yes. Um, so in terms of getting around it, you know, I would generally suggest there are certain limited, uh, statements allowed. So for example, structure function, claims, calcium builds strong bones, hemp supports endocannabinoid system. It’s not as sexy or as appealing as it treats pain, cancer or epilepsy. Yeah. Structure function claims are typically allowed for supplements. So that is something that likely will become available. As you know, the, as the definitiveness of FDA regulation becomes more clear but make no bones about it, it’s not going to rise to the level of pain or epilepsy. Now could you, you’ll also arguably create, um, uh, you know, a forum where you know, folks are providing both good and bad testimonials, arguably.

GarrettBut again, I think you run, you run the risk of having the FDA fine that you’re trying to tell a certain narrative and that’s certainly the case of you’re cherry picking testimonials right to, to have all of the good ones. So while I’m, I don’t want to dis – entirely discourage testimonials, the FDA has not drawn a bright line other than to say don’t do it. So to say, hey, here’s how to wade. You know, how, how, here’s a way to use testimonials in a limited fashion. Yeah. Unfortunately the FDA doesn’t really give you that a competence in terms of how you could appropriately do that. Ultimately, the FDA wants consumers to go out and research and find your clinical peer reviewed, establish data from independent sources. So, you know, that could be from a nonprofit organizations that are, you know, premise upon educational development, realm of caring is one that comes to mind.

GarrettAnd there’s others out there like that, right. That by creating, and this could be something that folks in the industry to come together to create, right. These educational organizations that are committed to help disseminate good information about FDA. Yeah. Now a product manufacturer cannot link to that company. No. Right? You can’t have that link on your website. But presumably if you create an educational organization the right way and it is entirely independent and providing objective good and bad information, right? No pros and cons. Uh, and if it’s marketed in the right way, it will gain traction within, you know, the, the industry. Cause uh, you know, there’s a number of consumers that are still wondering what, what do I use this for? They need that. But again, that information can’t and probably shouldn’t come from manufacturers. Yeah. Cause how do manufacturers objectively disseminate that? And at the reality, whether it be conscious or subconscious, it probably isn’t. You’re going to come out objectively. Yeah. And so the FDA is trying to trying to entirely separate those two things, education and sales. And so that’s where when you start talking about how do we get around that well, if the intent and premise behind FDA’s to bifurcate those two things. Yeah know, getting around becomes difficult. Yeah.

Hannah: I, I’ve noticed kind of some of the terminology is changing in the industry with some of the bigger companies. So instead of saying something like helps with insomnia, helps support a better night’s sleep, or instead of saying helps with anxiety, helps to kind of, uh, what was I manage everyday stress. So when, when looking at testimonials, could you use, can you use a type of testimonial that touched on maybe like postworkout… Muscle soreness, everyday stress, better night’s sleep. Can you, could you incorporate those testimonials or are those still dangerous?

GarrettWell, so again, words matter here, right? So it, it becomes, it can become very tricky in the sense that the distinctions you’re making, are structure function claims versus disease claims. Yeah. Right? So again, you know, the alternatives that you’re mentioning are arguably a little bit less sexy, right? Then yes. The other one. Yeah,

Hannah: because people are like googling, I need CBD for anxiety, not thinking I need CBD for everyday stress. Exactly. Yeah.

GarrettSo again, that it, so it’s a very fine line and again, the FDA doesn’t really give you definitive here’s a yes or no premarket review of any of these statements. So that really comes down to evaluating exactly what your words are and being very precise and succinct about what you’re saying for purposes of a structure function claim. So again, structure, function claims would typically be on the table for supplements. Okay. Right. Yep. Uh, there’s an argument that because you know, the, the status of, uh, hemp derived cannabinoids as an ingredients is still unclear. You know, are those still available or not? Again, the FDA has expressed optimism recently, uh, for treating hemp-derived cannabinoids appropriately as you know, food additives, dietary ingredients, et cetera. And they’ve not expressed, uh, you know, great concern with making a structure function claims. But as you start going down that spectrum, and again, it’s a very hard line to toe up to. If you cross over into disease claim realm, that’s now the highest regulatory priority of the FDA. Yep. Which is what triggers the warning letters that we’ve seen so many.

Hannah: okay. So one of the things I want to break down real quick just because I feel like I have definitely looked into difference between supplement in a drug, but maybe some of our listeners haven’t. Can you explain the difference between a supplement and a drug in the eyes of the FDA?

GarrettYeah, so actually let’s take a step even further back. The FDA regulates several different product types of foods have been conventional oral ingestible, so things that go in your mouth and our, you know, to, uh, to be adjusted through your throat. Uh, similarly, supplements were then added as a subcomponent of foods in the mid nineties. So foods and supplements are both oral ingestibles. Uh, foods are intended to provide nutrition, a neutral nutritional value. Supplements are intended to supplement the Diet. So that’s the two distinctions there, right. Topical products are treated cosmetics, so that would be the product type for balms and salves and things like that. Then you next jump into the OTC or prescription drugs realm. Drugs are specifically approved to treat certain conditions. So prescription drugs like epidiolex for example, has gone through six, seven, eight years, tens if not hundreds of millions of dollars, clinical trials upon clinical trials upon clinical trials to the FDA satisfaction to treat two specific indications, both of which are child onset epileptic conditions.

GarrettRight? So that’s the differences that a drug is approved, has been vetted for specific indications where supplements, it’s just a supplement to the diet. To add, you know, we know that vitamin C is generally good for your diet. So here’s a capsule of vitamin C to help make sure you hit your 100% daily value, right? That’s the difference. Whereas then it, you can get into very, uh, high dosage, uh, types of drugs that are intended to treat certain conditions where you know that you have a deficiency of something, whether that be, uh, you know, epidiolex and CBD or you need more, uh, uh, fish oil, you know, or something, you know, Omega threes or whatever you want to call, uh, the example. Uh, and then you have, of course, vapes and other sorts of kind of ancillary products on the sides. On the side, you also have OTC drugs, right?

GarrettSo prescription drugs are ones that you need a prescription for. They’re going to be more heavily regulated, but OTC drugs, Tylenol, Advil, sunscreen, that’s a drug, right? And so there’s certain ingredients that they’re still technically a drug, but the concern about safe use is reduced enough that they can be sold OTC, right? Without needing to be sold behind the counter. And so there’s what’s called OTC monographs. So menthol, liticain, a different camphor products like that, or ingredients like that, when included in a cosmetic or in some other product would render that a drug. So that’s where you see a pain cream. So now you’ve gone from a cosmetic, the intent of which is to beautify the skin, right? So you’re supposed to nourish and hydrate your skin. To now to Sunscreen, which is topically applied, but it’s intended to prevent sunburn. So the intent is different between all these different product types.

GarrettAnd so once you start including, uh, you know, OTC monographs, ingredients, you now have to abide by drug regulations, even if only OTC drug regulations. So those are the different product types. Again, they’re all governed by intent of use. Uh, and that’s what we have to try to fit hemp into. You know, I speak of OTC products. That’s been a, uh, you know, a recent, uh, exploration for a number of companies trying to, you know, put menthol in their product and then call it a pain cream, even though it has hemp or CBD in it. But the FDA has said they’re concerned about that because are you really being, you know, is it disingenuous to say it’s a menthol based pain cream, but then hemp or CBD plaster all over the label? So the FDA certainly called that into question. Now whether anything becomes of that in the near term or whether the FDA resolves that in the upcoming, you know, uh, rule making hearings, we’ll see. Um, but you know, there’s a lot of things there that we have to be cognizant of as hemp industry to make sure that we’re not actually encouraging special treatment of ourselves that will actually ultimately put more regulation on hemp than less. Okay.

Hannah: Yeah. I think it seems like the FDA, if you’re trying to be kind of tricky about it, or sneaky, it’s just not going to work out well.

GarrettWell, uh, at that, at that point you’re basically taking a gamble of, okay, the FDA has limited resources, so how likely are they to, to figure out what I’m doing. Which isn’t really necessarily the right question that you want to be asking yourself. Although I understand that some people feel more competent or, or more risk tolerant to, to go down that road.

Hannah: Are there any resources that you recommend to kind of business owners starting out? Obviously you guys are an incredible resource, but to kind of learn about the landscape, especially people with no background in the supplement industry or no background in basically anything nutritional. Um, what do, what do you rec – how do you recommend that they start to kind of teach themselves?

GarrettI mean – guidelines – you obviously they can, well, so first of all with respect to FDA area, is that the question about that? FDA?

Hannah: Yeah. Yeah, I would say, I would say mostly like FDA. FTC,

Garrettyeah. So the FDA and FTC, they have some reason on their websites. For example, the FDA has labeling guidelines for supplements and cosmetics and different product types, generally speaking. Yeah. So if you’re not familiar with that, you can certainly go familiarize yourself with that. As applied to hemp?. And how that is, you know, is or is not occurring. Certainly recommend getting involved with attorneys or other folks in the know in large part because this is so quickly changing. Yeah. So my answer today might be different next week after the FDA’s hearing. That’s not going to be encapsulated in articles or at least consistently across the board. That’s the problem I see in large part with a lot of the information available via Google right now is that, you know, we talked about states earlier, right? You know, red, green, and yellow states. Well, depending on who you talk to, 48 states are green, right?

GarrettAnd so you can, those numbers can vary vastly across the board. So it’s important to, you know, make sure that you’re speaking with them, working with someone that is knowledgeable and, you know, it was very much a very much has a pulse on what’s going on. Yeah. You know, across all the various states at the federal level, you know, with all the different agencies, uh, et cetera. Um, and unfortunately there’s just no good, easy way to disseminate that. You know, I have so many people come to me saying, Hey, what’s the list? I mean, that’s the million dollar question, right? But unfortunately the, you know, the, the evolution of that is so difficult to discern and disseminate ah, and even then, even if you disseminated, you’re still going to have so many states that are gray. That what’s the real answer? Right. You know, there’s no, yes and no list because there’s so many states that are in that middle area. So, unfortunately all of that comes with consulting with attorneys or other industry stakeholders that are, you know, well immersed in what’s going on.

Hannah: Yeah. So the best way, especially for business owners in those kind of gray states to protect themselves is you have to kind of have legal counsel, don’t yah.

GarrettYeah. And I mean, you can certainly, uh, uh, again reference FDA labeling guidelines, you know, wouldn’t, if clients come to me and say, Hey, uh, you know, we need to put some labels together, but they’ve never done that before. Yeah. I just don’t really point them in that direction first. Right. Yeah. Just because it’s an easy way for them to do a bit of their own homework and, and get immersed in that a little bit. But again, there’s nothing on paper in terms of here’s how hemp needs to be represented in all these various areas. And so a lot of that takes, you know, a good bit of handholding to help implement those best practices.

Hannah: Yeah. So I’m getting kind of ready to wrap up, but is there anything that, um, that we didn’t touch on that you would like to add?

GarrettNo, not right now necessarily. I mean, we’re in a very interesting and exciting time for hemp. Uh, you know, we’re now, what, six months, almost into five months into this new era with hemp. Uh, I know a lot of people are excited, a lot of people are anxious. I think the biggest, uh, you know, thing I can preach is patience, you know, we’re seeing a lot of states coming online with regulation, which is a great thing. I think we’ll see more, we’ll see. See USDA regulation coming online later this year, hopefully more guidance even if not, you know, affirmative definitive regulation from FDA in the coming months or year. Uh, so in terms of patience, that’s ultimately what what comes and right now, uh, we actually, uh, are part of a group that’s launched a hemp is legal campaign, um, with, you know, billboards and advertisements and Times Square, uh, helping to try to address the issues with Facebook and payment payment processors and others helping those third party ancillary companies, understanding that hemp is in fact lawful and to treat these businesses as, as conventional businesses. Those are frustrating pain points. And so I think a lot of people need to do their due diligence and if they’re not yet in the, in the industry, um, you know, doing their due diligence as to what our smart businesses, because there’s a lot of unicorns out there. Yeah. There’s a lot of distractions and things that you know, can certainly affect businesses know that are starting. And so hopefully people can build a strong foundation, use that, use this time wisely as we wait for all that greater guidance coming down the road.

Hannah: Yeah. We’re in a time that a lot of the little guys can kind of play without competition from some of the bigger companies. But a lot of these little smaller companies are kind of in this like get rich quick mentality. And I just wonder how many of those companies are going to be around five years from now.

GarrettAnd that’s the tough thing is, you know, I would certainly encourage as part of the due diligence, looking at other cannabinoids, looking at, uh, not even cannabinoid based products, but fiber based products. Certainly it’s not, again, not quite as sexy as CBD and how get rich quick, uh, you know, that mentality can be, but, uh, there’s longevity there, you know, that there are, you know, for example, BMW builds a lot of it’s indoor, uh, uh, interior car doors out of hemp material. Really? Wow. Yeah. And so there’s longevity there that we can create more biomass and create infrastructure and build a supply chain that even if it’s, you know, on a less sexy but high volume, a high demand sort of product there, uh, you know, scores of people can be involved in this agronomic revival. So, hmm.

GarrettLook at all the different options, hemp is more than CBD, so 

Hannah: Really? well, thank you so much. Awesome. Thank you. And that concludes our very first episode of Empires of Joy. Thank you so much for listening. And please subscribe to us on Itunes, Spotify, or wherever you get your podcasts. If you want to be a part of the conversation, you can follow us and ask us questions on Twitter, Facebook, or Instagram @empiresofjoy, and please make sure to share this episode with your friends if you enjoyed it. From the entire Joy team, Thank you so much.


For more information on compliance and legal issues in the CBD industry, we recommend speaking with Attorney Nick Oberheiden

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