CBD PRODUCT CRACKDOWNS - IT’S NOT JUST OPEN SKIES AHEAD FOR THIS CANNABINOID
As more jurisdictions join the push towards legalization of adult-use cannabis, regulators continue to signal their willingness to aggressively enforce the cannabis laws on the books. Operators across all jurisdictions should heed these warnings and ensure that they haven’t taken their compliance obligations for granted.
For example, regulators have taken a renewed set of enforcement actions to try to reign in the booming market for CBD products. In New York City, local Health Department officials declared in February 2019 that CBD-infused food and beverages were off-limits, and began issuing citations and stiff penalties to enforce that prohibition.
“Restaurants in New York City are not permitted to add anything to food or drink that is not approved as safe to eat,” a spokesperson for the Department stated, publicizing their recent actions. “Until [CBD] is deemed safe as a food additive, the department is ordering restaurants not to offer products containing CBD.”
This phenomenon is not limited to New York. Restaurants in the Detroit metro area have recently been instructed to cease serving CBD-infused food and drinks. The Detroit Health Department stated that CBD “is not an approved food additive by the Michigan Department of Agriculture and Rural Development or the Food and Drug Administration,” and that under the “Michigan Food Law, unapproved food ingredients cannot be added to food that is sold at restaurants.”
Even in jurisdictions with relatively mature legal cannabis markets, like California, health officials have moved to keep CBD out of food and restaurants. In all of these markets, it should be noted, the prohibition against CBD-infused products is not originating from its status as cannabis, but rather on the basis that it has not been deemed safe as a food additive—a set of prohibitions that apply far beyond the bounds of the regulated cannabis markets. As with adult-use products, the rules governing compliance are not always simply those dealing with cannabis (or hemp) directly.
As demand for CBD-infused products has surged, law enforcement and regulator’s approach to the market has been haphazard. Many retailers, including in states where blanket prohibitions on the sale and possession of any cannabis-derived product remain in force, have started putting CBD-infused products on their shelves, often packaged and promoted with unproven health claims and without many of the safety features that accompany adult-use cannabis products in legalized jurisdictions.
What should savvy operators take away from these enforcement actions? Even in a market with sporadic enforcement, the cost of an enforcement action can be significant. And just because certain forms of CBD may no longer be prohibited in and of themselves, businesses must not forget food safety, labeling, marketing, and other regulations that affect all aspects of their operations.