2019: CBD Explodes in Popularity But Hits Regulatory Wall

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Following the passage of the 2018 Farm Bill, which legalized the cultivation of hemp, cannabidiol (CBD) became the star ingredient of 2019, suspended by itself in oil or featured in supplements, beverages and food. The U.S. Food and Drug Administration (FDA) struggled to keep up with the hype; while CBD stayed in legal limbo, U.S. lawmakers and other public officials urged the agency to take action and create a legal framework for a burgeoning industry capitalizing on the popularity of CBD and its purported calming and healing effects. Several companies went too far in their marketing claims, however, according to the U.S. Food and Drug Administration’s and Federal Trade Commission’s warning letters focused on the claimed benefits of the product. One letter noted that the company sold CBD oil as a dietary supplement; “however, it cannot be a dietary supplement because it does not meet the definition of a dietary supplement,” the letter advised. “FDA has concluded based on available evidence that CBD products are excluded from the dietary supplement definition.” In November, FDA issued a consumer update clarifying that the agency “is concerned that people may mistakenly believe that trying CBD ‘can’t hurt'” while studies have identified possible effects on the liver, male reproductive health and drug interactions.

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Shook’s Cannabis Law practice, led by Partners Katie Gates Calderon and Greg Wu, helped companies navigate the regulatory minefields of CBD and other cannabis-derived products. Shook also released a white paper, “Wild West or New Frontier? Global Cannabis Market Spurs Legal Spend Across All Sectors,” drawing on feedback from in-house counsel in, among other sectors, health and wellness companies.

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