How to Sell Hemp Food Products Without Breaking the Law

By Charles S. Alovisetti, Partner

Sep 19, 2019

Hemp can be found in everything from hats to hot dogs these days. Despite news headlines saying that hemp is federally legal, many hemp-derived food products and supplements currently sold in the US are in violation of federal law. The Food and Drug Administration (FDA) has taken the clear stance that it is illegal, pursuant to the Federal Food Drugs & Cosmetics Act (FFDCA), to put into interstate commerce a food to which CBD has been added or to market CBD as a dietary supplement. According to the FDA, this is because CBD was the subject of substantial clinical investigations into potential medical uses before it was added to foods (including dietary supplements) and because CBD is the active ingredient in Epidiolex, an FDA-approved drug used to treat rare, severe forms of epilepsy.

The widespread sale of hemp-based foods and supplements, like that of cannabis products generally, is only partially a result of hemp legalization. It is also a result of federal policy and limited enforcement of certain sections of the FFDCA. However, despite restrictions on foods and supplements containing CBD, there are actually some hemp food products that can be produced and sold in complete compliance with US federal law. 

Food Ingredients Must Be Generally Recognized as Safe

As a background, with certain exceptions, all ingredients added to conventional foods must generally be authorized for their intended use by regulation, or otherwise be “generally recognized as safe” (GRAS) for their intended use prior to their inclusion in food products sold in interstate commerce. Companies can self-affirm an ingredient’s GRAS status for particular uses and either document that conclusion in their internal files or submit a notice of their conclusions to the FDA.

Pathways for Hemp Ingredients in Foods

In December 2018, the FDA issued a “no questions response” to a GRAS determination by Fresh Hemp Foods, Ltd for three different products intended for food uses: hulled hemp seed, hemp seed protein, and hemp seed oil. The FDA noted that it had no doubts about the GRAS status of the products, but  expressly stated that these “GRAS conclusions can apply to ingredients from other companies if they are manufactured in a way that is consistent with the notices and they meet the listed specifications.” One thing to note is that all three products from Fresh Hemp Foods were made from sterilized hemp seeds imported from Canada.

Hemp and hemp seed were removed from the Controlled Substance Act and placed within the regulatory authority of the United States Department of Agriculture (USDA) under the 2018 Farm Bill in December 2018. A few months later, the USDA issued a bulletin titled “Importation of Hemp Seeds” which stated that the “DEA no longer has authority to require hemp seed permits for import purposes,” and also made it clear that “hemp seeds can be imported into the United States from Canada if accompanied by either:

  1. a phytosanitary certification from Canada’s national plant protection organization to verify the origin of the seed and confirm that no plant pests are detected; or
  2. a Federal Seed Analysis Certificate (SAC, PPQ Form 925) for hemp seeds grown in Canada.”

The USDA Bulletin concluded that “hemp seed shipments may be inspected upon arrival at the first port of entry by Customs and Border Protection (CBP) to ensure USDA regulations are met, including certification and freedom from plant pests.” It is worth noting that even when compliant with the above requirements, there is still some risk of hemp materials being seized due to CBP confusion of products which test positive for trace amounts of cannabinoids. 

What does this mean for cannabis entrepreneurs or investors?

Simply put, if you want to start a company or make an investment in the cannabis space without violating any federal laws, make sure that all the products closely follow the manufacturing methods, specifications, and intended uses listed in the GRAS notices from Fresh Hemp Foods.

 

This article is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.