MarkIt to Market® - March 2021: Watching the Pot™

Sterne, Kessler, Goldstein & Fox P.L.L.C.

Naughty With Nature

Last week, the FDA issued two warning letters to companies selling drugs where CBD is listed as an ingredient on the label. The FDA’s “naughty list” of companies manufacturing CBD-ingredient drugs is growing with four total companies added this year.

The letter reminds recipients that, to date, the FDA has only approved one prescription drug containing CBD, Epidiolex, used for treating seizures associated with tuberous sclerosis complex, but has not approved any over-the-counter drugs containing CBD. The letter notes that none of the companies’ products in question comply with the requirements for lawful marketing. The letter expresses the FDA’s concerns for consumer safety that could arise from use of these CBD-ingredient drugs – the efficacy and the manufacturer claims of which have not been evaluated. Additionally, the letters identify violations of good manufacturing practices discovered upon inspection of the companies’ facilities.

At least for now, the FDA’s authority to regulate drugs and therapeutic products containing cannabis or cannabis-derived compounds, including in dietary supplements, is still preserved under the Federal Food, Drug, and Cosmetic (FD&C) Act. Nevertheless, with the increase in awareness of CBD’s therapeutic benefits, brand owners continue to churn out CBD-ingredient products. Many of these same brand owners, despite knowing that the USPTO will not register marks for unlawful products, continue to file applications for products for which use in interstate commerce is not lawful – perhaps betting that federal legalization is imminent. As an alternative strategy, many brand owners choose to file applications for complimentary lawful goods/services so that if – and, more likely, when – deregulation of CBD-ingredient dietary supplements and even federal legalization of marijuana occurs, brand owners will be well-positioned to extend coverage to CBD products as well. With continued legislative efforts, many believe the lawful pathway for CBD could be viable within the next few years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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