In the Weeds: FDA Warns Against CBD for Food-Producing Animals, Okla. Suspends Lab License, Calif. Launches Cannabis Access Map

Newsworthy Highlights

FDA Continues CBD Warnings; Sends Letters to Companies Selling CBD Products for Food-Producing Animals. On May 26, 2022, the U.S. Food and Drug Administration (FDA) issued warning letters to four companies for selling unapproved animal drugs containing cannabidiol (CBD) that are intended for use in food-producing animals.

As with FDA’s previous communications, the warning letters address companies’ unauthorized claims that evidence an intent for the products to be used as drugs. Under the Federal Food, Drug, and Cosmetic (FD&C) Act, any product intended to treat a disease or have a therapeutic or medical use, and any product intended to affect the structure or function of the body of humans or animals, is a drug. The warning letters addressed unauthorized marketing, including claims that refer to helping “farm animals with stress, anxiety, pain, inflammation, injuries...” and providing the animals with “support to help manage normal stress, promote a calming effect, maintain a healthy gut, maintain a normal and balanced behavior, maintain healthy joints, and maintain a normal inflammatory response.”

The FDA expressed its concern that CBD products for food-producing animals have not been assessed for their risks to the safety of the animals or the safety of human food products derived from animals that consumed these CBD products. Drugs given to food-producing animals generally require a withdrawal period to establish a minimum amount of time between the last dose of a drug and the slaughter or harvesting of food products. Because a food-producing animal may consume a drug that may be present in the food produced from that animal — such as milk, eggs or meat — and because the presence of CBD residues in food products has not been properly evaluated, the FDA asked companies to address the unauthorized marketing of new animal drugs and prevent their recurrence.

Some companies were additionally issued warning letters on the basis of misbranding drugs as CBD dietary supplements. These letters follow warning letters sent to other companies selling unapproved CBD products that similarly claimed to diagnose, cure, mitigate, treat or prevent various diseases, in violation of the FD&C Act. Expect continued enforcement of the FD&C Act with respect to CBD products.

Oklahoma Suspends License and Recalls Marijuana Products Due to Alleged Laboratory Testing Violations. Recently, the Oklahoma Commissioner of Health issued an emergency order suspending the business license and recalling 99 products of Scale Laboratories, a medical marijuana testing lab. The emergency order was issued due to alleged Oklahoma Medical Marijuana Authority (OMMA) rule violations.

Routine OMMA inspections in April and a review of Scale records revealed testing violations that posed significant threats to public health, safety and welfare. According to OMMA, the inspections and records review unearthed that Scale (1) reported passing test results for more than 150 samples that failed tests for yeast, mold, aspergillus, E. coli and salmonella; (2) failed to keep appropriate records for testing microbiological contamination, pesticides and heavy metals; (3) failed to use adequate quality control procedures; (4) manipulated test results; and (5) regularly deviated from standard operating procedures.

Following the emergency order, OMMA informed 33 businesses of the recall, and growers and processors were required to inform dispensaries of the 99 recalled products. From there, OMMA requires dispensaries to contact individuals who purchased any of the recalled products. OMMA encourages individuals to reach out to their dispensary with questions and advises that recalled products should be returned to the dispensary.

The state hopes its new “seed-to-sale” inventory tracking system, designed by Metrc, not only will improve public health, safety and welfare by implementing clear and reliable marijuana tracking, but also will facilitate more efficient notification to businesses and individuals regarding any future recalls or bans. As of the date of this publication, all marijuana business licenses in the state must be compliant with Metrc.

California Launches a Map of Access Areas for Cannabis Business. On May 26, 2022, California Department of Cannabis Control rolled out a data visualization tool to help consumers see where they can purchase legal cannabis products and to inform business owners on which cities and counties license cannabis business. Cannabis use is legal in California, but cities and counties can prohibit cannabis business because cannabis business rules are set at the local level. As a result, the state is a patchwork of areas where it is or is not legal to establish cannabis business. As of February 2022, the map shows that 56% of cities and counties prohibit the licensing of all cannabis business types and 62% prohibit the licensing of cannabis retail business.

The department stated that the map underscores the challenges to licensing access, more than five years after California legalized cannabis for recreational use. One of the plans to address the challenge is Gov. Gavin Newsom’s May 2022 revision budget proposal. This includes a one-time $20.5 million allocation to establish a cannabis local jurisdiction retail access grant program. The goal of the grant program is to aid localities with the development and implementation of local retail licensing programs to expand the legal marketplace into the 62% of jurisdictions that currently do not provide retail licensing opportunities.

Grassroots Federal/State Legislative Highlights

Connecticut Limits Gifting Cannabis Products and Enacts Advertising Restrictions. On May 24, 2022, Connecticut Gov. Ned Lamont signed House Bill 5329 which, among other limitations, regulates cannabis advertising and prohibits cannabis gifting that is transactional in nature. The legislation had bipartisan support and emerged after several billboard advertisements from out-of-state cannabis retail companies appeared on the Massachusetts border. H.B 5329 prohibits anyone without a Connecticut cannabis-related license from advertising such products within the state; prohibits advertising of cannabis and cannabis products and paraphernalia within 1,500 feet of any elementary or secondary school, house of worship, recreational center, public park or library; and restricts advertisements featuring cannabis plants between the hours of 11 p.m. and 6 a.m.

Additionally, H.B. 5329 also restricts certain “gifting” of cannabis products, including the sale or transfer of cannabis to another person in exchange for any donation, admission to an event, or club membership, and imposes up to a $1,000 fine per violation. However, adults legally utilizing cannabis are permitted to gift to other adults so long as the gifting is not transactional in nature. Currently under Connecticut law, adults are legally allowed to possess up to 1.5 ounces of cannabis in public and up to 5 ounces in their home. The bill also includes certain changes to the medical cannabis program, in which physician assistants are permitted to prescribe cannabis to patients.

Rhode Island Legalizes Recreational Marijuana and Protected Use Outside the Workplace. Last week, Rhode Island Gov. Dan McKee signed a bill to legalize the sale and possession of up to one ounce of cannabis for adults, ages 21 and older, with no more than 10 ounces for personal use kept at a person’s home. Recreational sales will be permitted beginning Dec. 1, 2022. The Rhode Island Cannabis Act also will allow residents to cultivate and possess up to three mature cannabis plants and three immature cannabis plants per dwelling.

The new law will allow 24 cannabis retailers to operate. This is in addition to the nine currently approved medical marijuana compassion centers, which will have an avenue to become hybrid medical and recreational retailers. Currently, three licensed compassion centers are operating, but six additional centers recently were approved and may open by Dec. 1, 2022. The state will impose a 10% state cannabis excise tax, which will be in addition to the 7% sales tax and a 3% local cannabis excise tax for the municipality where the sale takes place. Further, fees currently charged to patients in the state’s medical marijuana program will be eliminated.

Notwithstanding the above, employers are not required to accommodate the use or possession of cannabis, or an employee being under the influence of marijuana while performing work at the workplace and/or remotely. Employers also may refuse to hire, terminate or take disciplinary action to the extent the employee violates a workplace drug policy or works under the influence of cannabis. However, the employer may not terminate or otherwise take disciplinary action against the employee “solely for an employee’s private, lawful use of cannabis outside the workplace and as long as the employee has not and is not working under the influence of cannabis” except in the following circumstances:

  1. The employee is a federal contractor and/or subject to federal law or regulations such that the failure to take such action would cause the employer to lose a monetary or licensing related benefit thereunder.
  2. The employee’s profession involves work that is “hazardous, dangerous or essential to public welfare and safety.” Some examples include the operation of an aircraft, watercraft, heavy equipment, heavy machinery, commercial vehicles, school buses or public transportation; use of explosives; public safety first-responder jobs; and emergency and surgical medical personnel. If applicable, the employer may implement workplace drug policies that prohibit the use or consumption of cannabis within the 24-hour period prior to the scheduled shift or assignment.

The bill provides for the automatic expungement by July 1, 2024, of convictions of any cannabis possession offense that will be decriminalized by the Rhode Island Cannabis Act, without requiring any specific request, fee or hearing. Employers may not require an employee to disclose a sealed or expunged offense unless otherwise required by law.

Minnesota Legislature Clarifies Legal Status of Hemp-Derived THC Products. The Minnesota state legislature presented HF 4065 to Minnesota Gov. Tim Walz on May 24, 2022. The bill provides that cannabinoids derived from hemp, “containing not more than 0.3 percent of any tetrahydrocannabinol,” may be sold for human and animal consumption in the state. The bill sets various testing, labeling and packaging requirements and provides that such products may be sold only to adults 21 and over. This comes just weeks after Minnesota’s senate blocked a vote on SF 757, a bill that would legalize adult-use cannabis products in the state.

The bill allows these cannabinoids to be incorporated into edible products, as well. However, the bill provides that “an edible cannabinoid product must not contain more than five milligrams of any tetrahydrocannabinol in any single serving, or more than a total of 50 milligrams of any tetrahydrocannabinol per package.” Under the bill, edible products are also subject to strict labeling and advertising requirements. For example, these products may not:

  1. Bear the likeness or contain cartoon-like characteristics of a real or fictional person, animal or fruit that appeals to children.
  2. Be modeled after a brand of products primarily consumed by or marketed to children.
  3. Be made by applying an extracted or concentrated hemp-derived cannabinoid to a
  4. commercially available candy or snack food item.
  5. Be packaged in a way that resembles the trademarked, characteristic or product-specialized packaging of any commercially available food product.
  6. Be packaged in a container that includes a statement, artwork or design that could reasonably mislead any person to believe the package contains anything other than an edible cannabinoid product.

These restrictions appear to target youths’ use of cannabinoid-containing products. Concerns about “copycat” product marketing were recently raised in a letter asking Congress to impose federal restrictions on these marketing practices.

Upcoming Nevada Hearings on Cannabis Consumption Lounges. On June 28, 2022, the Nevada Cannabis Compliance Board will hold a public hearing to consider proposed regulations for the licensing and regulation of cannabis consumption lounges. Proposed regulations address, among other things, application requirements, products available for consumption, food services, lighting, ventilation, quality control, labeling and disclosures and warnings.

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