Regulatory Considerations for CBD Retailers

Over the last few years, the popularity of CBD products has grown exponentially. It is now sold in numerous forms and locations—even grocery stories and gas stations are carrying it. But how do you know if it is safe? And what legal factors do you need to consider when deciding if you should sell it?
May 6, 2020 | Retail
By: Sarah B.
Sarah B. came to Acuity this year with a background in retail. She studied Interior Architecture in college and completed an online business education program through Harvard Business School. She also has a wide range of commercial insurance experience and has earned her Associate in General Insurance (AINS), Associate in Insurance Services (AIS), and Chartered Property Casualty Underwriter (CPCU) designations. This made her the perfect addition to the Acuity Mercantile team. If she could travel anywhere in the world, she would return to Italy. She spent three weeks there during college studying architecture and design and has wanted to go back ever since.

Author of Retail Focus

Over the last few years, the popularity of CBD products has grown exponentially. It is now sold in numerous forms and locations—even grocery stories and gas stations are carrying it. But how do you know if it is safe? And what legal factors do you need to consider when deciding if you should sell it?

 

First, let’s talk about what it is. CBD is short for cannabidiol, a compound found in all cannabis plants. CBD and hemp products cannot legally contain more than 0.3% THC (tetrahydrocannabinol). THC is responsible for the “high” associated with marijuana. Anything over 0.3% is considered marijuana, which is classified as a schedule 1 drug by the Drug Enforcement Administration and is federally illegal. 

 

Chris Jones, Vice President of Government Relations & Counsel for the National Grocers Association, presented “Selling CBD – Regulatory Issues” at the National Grocers Association Show 2020 in February. 

 

Here are a few key takeaways for retailers:

 

  • The 2018 Farm Bill legalized the production and sale of hemp and its extracts. 
  • The only CBD product that is Food and Drug Administration (FDA) approved is Epidiolex, a prescription drug that treats two types of epilepsy.
  • Retailers selling CBD products that claim to help cure, treat, or prevent medical conditions are violating federal regulations. It is unlikely that CBD sellers or distributors have adequate scientific data to substantiate these claims. 
  • The FDA has sent out warning letters to violators asking them to remove these claims. There may be a litigation risk for retailers if they make false or misleading claims that may cause consumer injury. It is noted that the FDA is not on top of enforcement due to limited staffing. 
  • Even marijuana friendly states have problems avoiding the risks involved with selling CBD in foods and supplements.

 

If you are selling CBD products, we recommend you visit the FDA Regulation of Cannabis and Cannabis-Derived Products Including Cannabidiol (CBD) for more information. The site offers guidance on consumer information, FDA communications, regulatory resources, and frequently asked questions. 

 

One of the most interesting parts of the FDA website is the question around if it is legal for a business to sell CBD products. The answer is vague—“It depends”—which is why it is important for retailers to continually check back and stay educated on how this topic evolves. 

 

**Additional information source: https://www.pbs.org/newshour/science/is-cbd-legal-heres-what-you-need-to-know-according-to-science

By: Sarah B.
Sarah B. came to Acuity this year with a background in retail. She studied Interior Architecture in college and completed an online business education program through Harvard Business School. She also has a wide range of commercial insurance experience and has earned her Associate in General Insurance (AINS), Associate in Insurance Services (AIS), and Chartered Property Casualty Underwriter (CPCU) designations. This made her the perfect addition to the Acuity Mercantile team. If she could travel anywhere in the world, she would return to Italy. She spent three weeks there during college studying architecture and design and has wanted to go back ever since.

Author of Retail Focus