On October 31, the US Department of Agriculture published in the Federal Register interim rules governing the production of industrial hemp under the provisions of the 2018 Farm Act (see the USDA press release here). These rules will allow the USDA to approve state and tribal plans for the regulation of hemp production. It also allows for the USDA to authorize growers in states that have not adopted their own plans (or that have restricted the production of hemp). The USDA notes the interest in hemp production driven by interest in CBD products derived from hemp. While these rules do not address advertising issues specifically, they do ease some of the concerns that many broadcasters and other media companies have had about advertising CBD products when it was unclear that the production of those products was legal. We wrote about some of those concerns many times, including in our posts here and here.
These interim rules recognize that CBD products can already be legally produced under provisions of the 2014 Farm Act. As we noted here, that Act authorized experimental production of hemp products. The 2014 Act also permitted research into commercial exploitation of hemp products – probably permitting greater production than Congress or the USDA expected when the Act was adopted. The October 31 public notice states that production under the 2014 Act will be allowed to continue for the next three years until permanent rules implementing the 2018 Act are adopted. In fact, the USDA notes that it expects that over 50% of hemp production will be by those operating under these grandfathered 2014 licenses for the next year. This seems to recognize that a significant amount of production already underway is in fact legal under federal law, ameliorating some of the concerns as to whether CBD products now being sold could have been legally produced.
However, the USDA also notes that states are free to adopt rules that are more restrictive than the rules it adopts – and states can even prohibit the production of any hemp products. Thus, while the adoption of the interim rules eases many of the concerns of media companies about the legal origin of CBD, these companies still need to look at their state laws to make sure that they are not promoting a product that remains illegal in their state – or somehow promoting uses that would be prohibited in the state. For instance, there are states in which CBD products are legal only with the written permission of a doctor – so promoting unfettered sale of the product may run afoul of state laws.
Not only do media companies have to worry about state laws, they also need to consider the rules and policies of other federal agencies. USDA rules specifically note that uses of CBD remain under the jurisdiction of the Food and Drug Administration. As we have written before (see our posts here, here and here), the FDA and the Federal Trade Commission have been active in cracking down on CBD marketing where specific health claims are made (except for the one FDA approved CBD-based product used for control of seizures). The FDA has also prohibited marketing of CBD food additives or oral medications until it conducts further studies on their safety and labeling. So any media company looking to take CBD advertising also has to look at these restrictions.
While this action of the USDA appears to resolve some of the questions about the legality of the production of CBD products, it does not eliminate all legal concerns. So talk to your attorneys and carefully consider your marketing for any of these products.