The Kentucky Bar Association Corporate House Counsel Section

presents

Medical Cannabis in Kentucky:

What Corporate Law

Departments Need to Know

This program has been approved in

Kentucky for 1.00 CLE credit.

Compiled and Edited by: The Kentucky Bar Association

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The Kentucky Bar Association, January 2021. Editor’s Note: The materials included in the following Kentucky Bar Association Continuing Legal Education handbook are intended to provide current and accurate information about the subject matter covered as of the original publication date. No representation or warranty is made concerning the application of legal or other principles discussed by the instructors to any specific fact situation, nor is any prediction made concerning how a particular judge or jury will interpret or apply such principles. The proper interpretation or application of the principles discussed is a matter for the considered judgment of the individual legal practitioner. The faculty and staff of these Kentucky Bar Association CLE programs disclaim liability therefore. Attorneys using these materials, or information otherwise conveyed during these programs, in dealing with a specific legal matter have a duty to research the original and current sources of authority. In addition, opinions expressed by the authors and program presenters in these materials do not reflect the opinions of the Kentucky Bar Association, its Board of Governors, Sections, or Committees.

Medical Cannabis in Kentucky: What Corporate Law Departments Need to Know

Table of Contents

Presenter ......................................................................................................................... i

Medical Cannabis in Kentucky: What Corporate Law Departments Need to Know .......... 1 FDA News Release: FDA Warns Companies Illegally Selling CBD Products ................ 13

i

PRESENTER

Aaliyah K. Eaves Dinsmore & Shohl, LLP 101 South Fifth Street, Suite 2500 Louisville, KY 40202 (502) 540-2547 aaliyah.eaves@dinsmore.com

Aaliyah K. Eaves is a partner in Dinsmore & Shohl LLP’s Louisville office, where she focuses her practice in the life sciences industry, including FDA submissions, international and U.S. research regulations, contract manufacturing and importer agreements, unaproved use of approved products, bioethics and regulatory counseling. She has lived and worked in Spain and Germany and currently advises life sciences clients located in Japan, China, South Korea and throughout the U.S. She is most proud of her medio-legal collaborations with hospitals and medical device manufacturers seeking FDA Emergency Use Authorization to make medical countermeasures available during the COVID-19 pandemic. Ms. Eaves began her legal career as a public servant and has over 14 years of government experience, including her former role as a senior-level policy advisor in the Office of the Center Director at the FDA, Center for Devices and Radiological Health (CDRH). Ms. Eaves earned a BFA from Carnegie Mellon University, an LLM in Health Law, Policy and Bioethics from the Indiana University Robert H. McKinney School of Law, a JD from the University of Kentucky J. David Rosenberg College of Law, and a PhD in Health Care Ethics with a concentration in Research Ethics from St. Louis University. She serves on the American Board of Medical Specialties Ethics and Professionalism Committee and Chairs the American Society of Bioethics and Humanities, Health and Science Policy Affinity Group.

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MEDICAL CANNABIS IN KENTUCKY: WHAT CORPORATE LAW DEPARTMENTS NEED TO KNOW

Aaliyah K. Eaves

I. CANNABIS LEGALIZATION IN THE UNITED STATES

A. What is Cannabis?

1. Cannabis sativa L. is a plant that contains over 80 different naturally occurring compounds called “cannabinoids.” Two well-known cannabinoids are Cannabidiol (CBD) and Tetrahydrocannabinol (THC). Plants are grown to produce varying concentrations of cannabinoids (THC or CBD). Cannabis sativa L. plants have unique characteristics based on the variety and cultivar.

2. Varieties are often naturally occurring, and most varieties remain

true to type, which means their seedlings will also have the same unique characteristic of the parent plant and produce the same variety.

3. Cultivars are varieties that have been cultivated by growers to

produce certain traits and are not necessarily true to type. See Cindy Haynes, “Cultivar versus Variety,” Iowa State University, February 6, 2008, available at: https://hortnews.extension.iastate.edu/2008/2-6/CultivarOrVariety. html.

B. What is a Cannabis-derived Compound?

Compounds occurring naturally in the plant, like CBD and THC, that are extracted directly from the plant and are used to manufacture other products (i.e., highly-purified CBD oil) are considered derivatives or cannabis-derived compounds.

C. What is a Cannabis-related Compound?

A cannabis-related compound is a synthetic compound that is created in a laboratory. These compounds can be used to manufacture drug products. Some compounds may also occur naturally in the plant and some may not. Examples of cannabis-related compounds that are synthetically-derived are dronabinol (also naturally occurring) and nabilone (not naturally occurring).

D. What is Hemp?

1. Marijuana and hemp are from the same species of plant, Cannabis sativa L., but come from different varieties or cultivars. Hemp and marijuana are genetically distinct forms of cannabis. The distinguishing factors between marijuana and hemp are the chemical composition, method of cultivation and use.

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2. Marijuana and hemp have different statutory definitions under U.S. law. The Agricultural Marketing Act defines hemp as, “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” See §297A of the Agricultural Marketing Act of 1946 (AMA, 7 U.S.C. §1621 et seq.).

3. The Controlled Substances Act defines marijuana as (subject to

subparagraph (B)), “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” See §802(16)(A) of the Controlled Substances Act (CSA, 21 U.S.C. §801 et seq.).

4. The definition of marijuana explicitly excludes hemp as defined by

the Agricultural Marketing Act or “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.” 21 U.S.C. §802(16)(B).

E. Is Cannabis Legal in the U.S.? It’s Complicated…

1. California became the first U.S. state to allow the use of medical marijuana when voters passed Proposition 215 in 1996. The Compassionate Use Act authorized cannabis to be cultivated, commercialized and used to ameliorate specific medical conditions for patients residing within the state. See CAL. HEALTH & SAFETY CODE §11362.5 (West 2019).

2. Mississippi and South Dakota approved a measure to regulate

cannabis for medical use in the 2020 election, bringing the total to 36 states and four territories (District of Columbia, Guam, Puerto Rico and U.S. Virgin Islands) with medical marijuana programs.

3. Arizona, Montana, New Jersey and South Dakota voters also

approved measures to regulate cannabis for adult-use, bringing the total to 15 states and three territories with “responsible use,” also known as “recreational use” and “adult use” programs.

4. Measures in 11 states allow the use of "low THC, high cannabidiol

(CBD)" products for medical reasons in limited situations or provide a legal defense for use. Low-THC programs are often not counted among the comprehensive medical marijuana programs.

5. At the federal level, marijuana remains classified as a Schedule I

substance under the Controlled Substances Act (CSA). 21 U.S.C.

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§§801-904. Petitions to have the drug reclassified have not been successful. Opponents of removing marijuana from the CSA Schedule I list content argue that more reliable evidence from carefully controlled clinical studies are needed before the substance can be reclassified. See Denial of Petition to Initiate Proceedings to Reschedule Marijuana, August 12, 2016, 81 FR 53687.

F. What are Common Characteristics of Medical Marijuana Programs?

1. Protection from criminal penalties for medical use. 2. Access (home cultivation, dispensaries or some other system). 3. Variety of products and strains. 4. Smoking or vaporization may be allowed. 5. Use is not limited to a clinical trial or pilot program.

G. The Controlled Substances Act (CSA) 21 U.S.C. §§801-904

1. The Controlled Substances Act (CSA) creates a legal framework to regulate certain drugs that are deemed to pose a risk of abuse and dependence. The CSA applies whether a drug is used for medical or recreational purposes or if the use and distribution is legal or illicit. Note that "marihuana" is the spelling used in the CSA.

2. Schedule I substances are considered to have a high potential for

dependency and no accepted medical use. H. The Justice Department Marijuana Enforcement Policy (2013)

In 2013, the Department of Justice (DOJ) published a memo regarding federal priorities that declared the DOJ would not sue to block laws legalizing cannabis at the state level as long as states enacted regulations to curtail underage sales, interstate trafficking, illegal cartel and gang activity, and excessive cannabis-related accidents and violence.

I. The Justice Department Marijuana Enforcement Policy (2018)

In 2018, Attorney General Jeff Sessions announced a revocation of the 2013 enforcement policy. The 2018 memo sent to U.S. attorneys instructed prosecutors to disregard the old guidance and instead use their discretion in light of the department's limited resources and the seriousness of the crime in question when weighing whether charges were appropriate. In states where marijuana was legal, most U.S. Attorneys continued to use the enforcement discretion policy that was already in place under the 2013 DOJ guidance. State-level marijuana industry activities that were most likely to warrant federal involvement included:

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1. Overproduction.

Overproduction creates the risk of lucrative illegal marijuana sales to users in nearby states where marijuana remains restricted to medicinal use or is illegal in general. Sales are often cash-only transactions that involve federal tax fraud designed to hide illicit cash. Despite regulatory efforts to address this problem, licensed outdoor marijuana cultivation continues to create a significant risk of overproduction.

2. Targeted sales to minors.

Studies confirm that regular marijuana use is dangerous to adolescent brain development until the early 20s. The targeted sale of marijuana to minors may warrant federal prosecution when state-mandated age requirements fail to adequately quell marijuana use among minors.

3. Organized crime and interstate transportation of drug proceeds.

Organized criminal activities are often financed by drug proceeds. Federal investigators will continue to police criminal syndicates, like MS-13, that distribute drugs in violation of federal law, regardless of whether that distribution is legal under state laws.

II. EVOLVING FEDERAL REGULATION AND POLICY

A. The 2014 Farm Bill (Agricultural Act of 2014, P.L. 113-79)

The omnibus legislation passed by the United States Congress, and signed into law by President Obama on February 7th, 2014, allowed state agriculture departments and state universities to produce hemp under a pilot research program. It did not remove “industrial hemp” from the federal CSA list.

B. The 2018 Farm Bill (Agriculture Improvement Act of 2018, P.L. 115-334)

The 2018 Farm Bill removed industrial hemp from Schedule 1 controlled substances and explicitly preserved FDA’s authorities over hemp products. The 2018 Farm Bill directed the USDA to develop a program for approving state production plans. Kentucky was the first state to apply for USDA approval. The Kentucky Department of Agriculture (KDA) issues licenses to individuals and businesses to grow or process industrial hemp in the state. In 2019, the KDA received more than 1,000 applications to participate in the state’s industrial hemp research pilot program.

C. Legislative Watch: U.S. Congress

The U.S. House of Representatives will propose federal marijuana reform bills in December 2020. Bills are expected to pass the House but are unlikely to pass in the Senate. The U.S. House could vote on similar bills

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in the next session of Congress if there are enough votes to pass. Control of the Senate is still pending with two runoff races that will determine the majority in January 2021. President-elect Joe Biden has stated he supports decriminalization of marijuana.

D. Proposed: Medical Marijuana Research Act (2020)

There is bipartisan agreement that valuable cannabis research is hindered by the DEA’s failure to approve additional marijuana manufacturers. The U.S. House of Representatives will vote on a bill to promote research and allow scientists to study cannabis from legal state-regulated businesses. The bill proposes to prohibit limits on the number of entities that can be registered to cultivate marijuana for research purposes. Although the bill is not expected to pass the Senate in 2020, the bill may resurface in the next session of Congress. Similar bills in state legislatures have been proposed to promote medical cannabis research at the state level.

E. Is the Drug Enforcement Administration (DEA) a Barrier to Medical

Cannabis Research?

The DEA has been credited with hindering innovation and scientific knowledge in the medical cannabis space because of its law enforcement function that oversees access to legal cannabis in order to control against diversion from research to illicit uses. Most studies that were conducted on the therapeutic effects of cannabis relied on synthetic formulations of specific chemicals because access to whole cannabis plants had been significantly curtailed. For more than 50 years, the University of Mississippi, Oxford, was the only grower of marijuana for medical research under a contract with the National Institute on Drug Abuse (NIDA). Researchers argued that marijuana produced at the University of Mississippi was difficult to access and chemically closer to hemp than commercially available cannabis, therefore undermining research efforts by casting doubt on the generalizability of study results.

1. In 2019, the DEA announced it would evaluate 37 new applications

to grow marijuana for medical research. The DEA also registered 224 new researchers to conduct marijuana studies, bringing the total to 595 since 2017. The DEA increased the marijuana production quota from 472 to 3200 kilograms.

2. Based on stakeholder demands for reduced wait times for approval

and concerns for the cost associated with research and development, the DEA proposed a rule that would expand the sources of research-grade cannabis. The Proposed Rule, entitled Controls To Enhance the Cultivation of Marijuana for Research in the United States (85 FR 16292), received 256 comments.

3. Some comments were more colorful than others:

“The wheel is turning and you can't slow down, You can't let go and you can't hold on,

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You can't go back and you can't stand still, If the thunder don't get you then the lightning will. Marijuana has thousands of uses The Emperor Wears No Clothes” (DEA-2020-0008-0015)

F. What is the FDA’s Role in Supporting Scientific Research into the Medical

Uses of Cannabis?

State legislatures and industry stakeholders have called upon the FDA to take action and provide regulatory guidance for medical cannabis. The FDA has acknowledged these requests; however, the agency says it needs more research and valid scientific evidence on the safety and efficacy of medical cannabis. The FDA has provided clarification to the public and industry and states that it sees a path for cannabis research within the drug research and development regulatory framework.

1. The Deputy Director for Regulatory Programs at the Center for Drug

Evaluation and Research (CDER) testified before the House Committee on Energy and Commerce, Subcommittee on Health (January 15, 2020) about FDA’s “important role to play in supporting scientific research into the medical uses of cannabis and its constituents in scientifically valid investigations as part of the Agency’s drug review and approval process.”

2. In asserting the FDA’s regulatory jurisdiction over cannabis, the

agency has rejected claims that cannabis with THC or CBD compounds should be regulated as a dietary supplement. Sponsors and investigators are subject to FDA drug review process and regulations (e.g., clinical trials, cGMP, marketing authorization, approval, safety reporting and enforcement actions).

3. The FDA pathway for sponsors and investigators to conduct clinical

cannabis studies with cannabis “drugs” that have a greater than 0.3 percent THC content (Controlled under Schedule I) continues to require layers of review and interaction with the DEA. Sponsors must:

a. Obtain a pre-IND number through CDER. b. Obtain the identity of an available DEA-registered source of

cannabis and/or cannabis-derived substances and provide FDA information on the specific cultivars for the IND.

c. The process may include a DEA inspection of

investigator/study site Schedule I license. d. Obtain a Letter of Authorization (LOA) to reference safety

information.

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e. Submit copy of the IND and clinical protocol (and LOA if applicable) to FDA.

f. Thirty day waiting period following IND submission before

initiating any clinical trials, during which time FDA reviews the IND to assure research subjects will not be exposed to unreasonable risks.

G. U.S. Department of Agriculture (USDA)

The USDA published an Interim Final Rule (84 FR 58522) establishing the U.S. Domestic Hemp Production Program and outlining a regulatory framework for monitoring hemp cultivation and production (October 31, 2019). The program requires strict sampling and testing requirements for hemp to confirm that THC levels do not exceed 0.3 percent. Producers must dispose of plants containing more than allowed (0.3-0.5 percent THC) and provide USDA documentation of the destruction. The interstate shipment of industrial hemp is legal, but only as allowed under terms of FDA regulations and related state program guidelines. This safe harbor allows hemp to be transported across state lines even in states that do not authorize hemp production. The Interim Final Rule does not preempt or limit the ability of states to impose stricter hemp production laws. If a state does not have a USDA approved hemp production plan in place, hemp may be produced in that state under a USDA hemp producer license (which would cover production, cultivation or storage of the hemp). The interim rule explicitly codifies the FDA’s jurisdiction over the regulation of CBD or other hemp derivatives in food, beverages or dietary supplements.

III. KENTUCKY PILOTS HEMP PRODUCTION

A. Kentucky: The Early Adopter and Model for Other States

Kentucky established the hemp research program under its Kentucky Department of Agriculture (KDA). The program is defined in KRS 260.850-260.869. There are strict guidelines for legal production, handling and processing, in addition to the requirement for a state-issued license to cultivate, handle, process and market hemp under the program. The Kentucky hemp provisions defer to federal regulations and do not create a safe harbor or defense to violations of federal law. In 2020, the Kentucky “research” program ends, and official production begins. Official production remains under the purview of the KDA.

B. SB 124 (2014) Clara Madeline Gilliam Act

SB 124 amended KRS 218A.010 to exempt from the definition of "marijuana" drugs used in FDA-approved studies or compassionate use programs and the substance cannabidiol when recommended by a physician practicing at a state research hospital. Under the amendments, marijuana remains illegal, however; “Industrial Hemp” is legal as defined in KRS 260.850. Per state law, “Industrial Hemp" has the same meaning as in 7 U.S.C. §5940 as it currently exists or as it may be subsequently

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amended. The approach Kentucky has adopted is considered a Low-THC program. Kentucky follows the federal policy for the regulation of industrial hemp plants and derivatives with greater than 0.3 percent THC. (See KRS 260.858: “Nothing in this chapter authorizes any person to violate any federal or state law or regulation”).

IV. MEDICAL CBD USE: STATE AND FEDERAL ENFORCEMENT DISCRETION

A. A New Market for CBD Products

Recent decriminalization of hemp under certain circumstances led to an explosion of hemp-based products, including products featuring the substance cannabidiol (“CBD”). CBD products are being marketed with medical claims for the treatment or cure of a variety of human and animal health conditions. CBD is being sold as: oil, topical cream, lozenge, transdermal patch, injectable compound drug, dietary supplement, herbal tea, additive to soaps, body washes, food and beverages, and in vape cartridges. CBD can be extracted from marijuana plants or hemp plants, but under federal and Kentucky state law, marijuana is illegal, so CBD products derived from it are also illegal. Most CBD products found in Kentucky claim to be hemp-based.

B. How are CBD Products Evaluated under the Federal Food, Drug, and

Cosmetic Act (the FD&C Act)?

1. CBD products, and combination products that contain CBD, must be cleared, approved or authorized for use under the FD&C Act. The FDA has reviewed two substantial clinical investigations for Sativex and Epidiolex. Epidiolex can be prescribed “off-label” under the Practice of Medicine Doctrine.

2. FDA has issued 70 warning letters for products that allegedly

contain cannabidiol (CBD) between 2015-2020. FDA Warning Letters have been issued for CBD oil, CBD topicals, CBD gummies, CBD pet products and CBD vaping/smoking. Many products that were tested were found not to contain the levels of CBD they claimed to contain. Some of the tested products contained other active ingredients. Promotional materials and labeling for CBD often includes safety and efficacy claims that are not approved by FDA for the diagnosis, cure, mitigation, treatment, or prevention of any disease. The FDA has exercised enforcement discretion with CBD products and has only taken enforcement action against products that make misleading claims that have the potential to cause serious or life threating harm.

3. CBD as new drugs.

a. Unapproved new drugs are in violation of sections 505(a) and 301(d) of the FD&C Act, 21 U.S.C. §§355(a) and 331(d).

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b. Misbranded drugs are prohibited under section 502(f)(1) of the FD&C Act, 21 U.S.C. §352(f)(1).

4. CBD as dietary supplements.

a. Not generally recognized as safe (GRAS) for human consumption.

b. Does not meet the definition of a dietary supplement under

section 201(ff) of the FD&C Act, 21 U.S.C. §321(ff). c. Active ingredient in a drug product that has been approved

or investigated under section 505 of the FD&C Act, not generally recognized as safe and effective.

5. CBD in foods or beverages/additive.

a. Not GRAS. b. Adulterated under section 402(a)(2)(C)(i) of the FD&C Act,

21 U.S.C. §342(a)(2)(C)(i), because they contain an unsafe food additive.

6. CBD injectables, patches or tincture products often make medical

claims and would be classified as a “new drug” under section 201(p) of the FD&C Act, 21 U.S.C. §321(p).

7. Vaping products that do not make health calms are regulated by

FDA's Center for Tobacco Products (CTP). C. An investigational use of CBD requires an approved IND or Expanded

Access pathway. Some evidence suggests that CBD may be beneficial in the treatment of COVID-19 patients. An Israeli in vivo study reported promising initial results after examining the efficacy of CBD in treating the life-threatening cytokine storm syndrome caused by COVID-19. The FDA may consider real world data and real-world evidence from studies conducted outside of the U.S. (OUS) in making regulatory decisions; however, a sponsor must obtain prior FDA authorization or investigational approval before conducting such studies in the U.S.

D. Under Section 564 of the FD&C Act, the FDA could issue an Emergency

Use Authorization (EUA) for the use of a CBD product with greater than 0.3 percent THC if the benefits of the product outweighed the known and potential risks of the product and there were no adequate, approved, and available alternatives during a public health emergency (i.e., the COVID-19 pandemic).

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V. THE CONVERGENCE OF THE FDA REGULATORY FRAMEWORK AND KENTUCKY LAW

A. Kentucky – Industrial Hemp Plants/Derivatives with Greater than 0.3

percent THC

1. FDA must approve any prescribed drugs. 2. Written order by a physician practicing at a public Kentucky

university school of medicine; AND 3. Must be taken by participants in FDA-approved clinical trial or

expanded access program. 4. It is anticipated that as research on medical cannabis increases,

more Kentuckians will participate in clinical studies and lawfully use medical marijuana or hemp derivatives with a greater than 0.3 percent THC.

B. Kentucky – Industrial Hemp Plants/Derivatives with Less than 0.3 percent

THC

1. A cannabidiol product derived from industrial hemp. 2. Not ingested or absorbed. 3. Not used as a drug.

C. CBD products bought and sold in Kentucky do not always conform to the

indications for use required for industrial hemp plants/derivatives with less than 0.3 percent THC. Reports of positive THC drug screens or adverse drug interactions are on the rise and should be anticipated by corporate counsel.

D. Consumer class actions have been filed against manufacturers and

distributors of CBD products. See Snyder v. Green Roads of Florida, No. 0:2019-cv-62342 (S.D. Fla. Sep 19, 2019); McCarthy v. Charlotte’s Web Holdings, Inc., No. 5:2019-cv-07836 (N.D. Cal. Nov 30, 2019); Colette v. CV Sciences, Inc., No. 2:2019-cv-10227 (C.D. Cal. Dec 03, 2019); Glass v. Global Widget, LLC, No. 2:2019-cv-01906 (E.D. Cal. Sep 18, 2019); Pfister v. Charlotte’s Web Holdings, Inc., No. 1:2020-cv-00418 (N.D. Ill. Jan 17, 2020); Ahumada v. Global Widget LLC, 1:2019-cv-12005 (D. Mass. Sep 24, 2019); Potter v. Diamond CBD, No. 1:2019-cv-24017, (S.D. Fla, Sep 27, 2019). The basis for the asserted claims turns on:

1. Whether the product contained the advertised amount of CBD. 2. Whether the product contained more or less THC than advertised. 3. Whether the product contained other ingredients that were not

advertised.

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4. Whether the product was effective for the advertised therapeutic benefits.

VI. KENTUCKY LEGISLATIVE WATCH

Medical cannabis and CDB proposals that go beyond what is authorized at the federal level have faced challenges in the Kentucky General Assembly. Bipartisan support for legalization continues to gain momentum in Kentucky as neighboring states have enacted cannabis laws that enable a more robust cannabis program than the one Kentucky is currently following. It can be expected that bills that did not get passed last year will be brought back when the General Assembly returns in January 2021. Kentucky Governor Andy Beshear supports decriminalizing marijuana and has stated that he believes it could mitigate the opioid crisis. A. House Bill 136: AN ACT relating to Medicinal Marijuana and Making an

Appropriation therefor (introduced 01/07/20, dead 4/15/20)

Proposed creating new sections of KRS Chapter 218A to provide definitions and to exempt medical marijuana from existing provisions in Kentucky law to the contrary and establish the Division of Medicinal Marijuana within the Department of Alcoholic Beverage and Cannabis Control. Under the proposed bill, the Department for Alcoholic Beverage and Cannabis Control would implement and regulate the medical marijuana program in Kentucky and establish restrictions on the possession of marijuana for personal medical use by qualifying patients, visiting patients, and designated caregivers. The proposal included a mandate to establish certain protections for cardholders and professional protections for healthcare providers and attorneys and to authorize state licensing boards to allow practitioners to issue written certifications for the use of medicinal marijuana. Possession and use of medicinal marijuana on a school bus, on the grounds of any preschool or primary or secondary school, in a correctional facility, any property of the federal government, or while operating a motor vehicle was prohibited under the proposed bill, as well as the smoking of medicinal marijuana. The proposed bill permitted employers to restrict the possession and use of medicinal marijuana in the workplace. After a decade of failed attempts by medical marijuana proponents, the Kentucky House of Representatives approved HB 136 by a 65-30 vote on February 20, 2020. The bill subsequently died in the Senate without a vote.

B. Senate Bill 96: AN ACT relating to a Drug-free Workplace (introduced

1/21/20, dead 4/15/20)

Proposed creating a new section of KRS Chapter 336 to provide definitions and to require public employers to have an appeals process for an employee who violates a drug-free policy using legal industrial products; proposed amending KRS 18A.043 to require an appeals process for those public employers who require drug testing; proposed amending KRS 304.13-167 to require Section 2 be complied with by public employers and suggested for private employers.

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C. Senate Bill 65: AN ACT relating to the Use of Hemp-derived Products by Employees (introduced 1/08/20, dead 4/15/20)

Proposed amending KRS 344.040 to provide protections against employment-related discrimination for users of hemp-derived products. Employer may not fail or refuse to hire, or to discharge any individual, or otherwise to discriminate against an individual or require, as a condition of employment, that employees or applicants for employment abstain from smoking or using hemp-derived products outside the course of employment, as long as the person complies with the employer's policy concerning the use of such products in the workplace.

D. House Bill 102: AN ACT relating to Employment-related Drug Screens

(introduced 1/07/20, dead 4/15/20)

Proposed creating a new section of KRS Chapter 344 to prohibit employment discrimination based on a positive drug screen for cannabidiol or tetrahydrocannabinol.

12/22/2020 FDA Warns Companies Illegally Selling CBD Products | FDA

https://www.fda.gov/news-events/press-announcements/fda-warns-companies-illegally-selling-cbd-products?utm_medium=email&utm_source=govdeli… 1/3

FDA NEWS RELEASE

FDA Warns Companies Illegally Selling CBD Products

For Immediate Release:

December 22, 2020

Today, the U.S. Food and Drug Administration issued five warning letters to companies forselling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug, andCosmetic Act (FD&C Act). All five warning letters address the illegal marketing of unapprovedCBD products claiming to treat medical conditions. The warning letters include CBD productsthat are especially concerning from a public health perspective due to the route ofadministration, including nasal, ophthalmic and inhalation. In addition, they address violationsrelating to the addition of CBD to food, and the impermissible marketing of CBD products asdietary supplements. Two of the letters also address CBD products illegally marketed for pets,including a product for use in the eye.

“The FDA’s first priority is to protect the health and safety of Americans. Manyquestions remain regarding the science, safety, effectiveness and quality ofproducts containing CBD,” said FDA Principal Deputy Commissioner AmyAbernethy, M.D., Ph.D. “We remain focused on exploring potential pathways forCBD products to be lawfully marketed while also educating the public about theseoutstanding questions of CBD’s safety. Meanwhile, we will continue to monitorand take action, as needed, against companies that unlawfully market theirproducts — prioritizing those that pose the greatest risk of harm to the public.”

The warning letters were issued to:

Bee Delightful (/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/bee-delightful-610689-12222020)

G&L Wellness (C Better Daily) (/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/g-l-wellness-llc-609572-12222020)

New Leaf Pharmaceuticals (/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/new-leaf-pharmaceuticals-llc-609744-12222020)

NextL3vel Services Group, LLC doing business as This Stuff Is Good For You(/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/nextl3vel-services-group-llc-dba-stuff-good-you-610446-12222020)

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12/22/2020 FDA Warns Companies Illegally Selling CBD Products | FDA

https://www.fda.gov/news-events/press-announcements/fda-warns-companies-illegally-selling-cbd-products?utm_medium=email&utm_source=govdeli… 2/3

Wellness BioSciences (/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/wellness-biosciences-rx-609604-12222020)

The FDA has previously sent warning letters (/news-events/public-health-focus/warning-letters-and-test-results-cannabidiol-related-products) to other companies illegally sellingunapproved CBD products that claimed to prevent, diagnose, mitigate, treat or cure variousdiseases, in violation of the FD&C Act. In some cases, there were further violations because CBDwas added to food, and some of the products were impermissibly marketed as “dietarysupplements.”

The products that are the subject of the letters issued today have not gone through the FDA drugapproval process and therefore are considered unapproved new drugs. It is not known whetherthey are effective for the uses claimed in labeling, what an appropriate dose might be, how theycould interact with FDA-approved drugs or other products or whether they have dangerous sideeffects or other safety concerns. In addition, the manufacturing process of these unapprovedCBD-containing drug products has not been subject to FDA review as part of the human oranimal drug approval processes, so it is not known what the manufacturing conditions of, orcontaminant levels in these products may be.

Under the FD&C Act, any product intended to diagnose, cure, mitigate, treat or prevent adisease, and any product (other than a food) that is intended to affect the structure or functionof the body of humans or animals, is a drug. New human and animal drugs must be approved bythe FDA or conform to a "monograph" for a particular drug category, as established by FDA'sOver-the-Counter (OTC) Drug Review, before they can be legally marketed as drugs. CBD wasnot an ingredient considered under the OTC Drug Review.

The FDA has not approved any CBD products other than one prescription drug (/news-events/press-announcements/fda-approves-new-indication-drug-containing-active-ingredient-derived-cannabis-treat-seizures-rare) for the treatment of seizures associated with tuberoussclerosis complex (TSC), Lennox-Gastaut syndrome (LGS) and Dravet syndrome (DS) in humanpatients. CBD has not been approved as a food additive and does not meet the statutorydefinition of a dietary supplement.

The FDA has requested responses from the companies within 15 working days stating how theywill address these issues, or providing their reasoning and supporting information as to whythey think the products are not in violation of the law. Failure to adequately address theviolations promptly may result in legal action, including product seizure and/or injunction.

The FDA, an agency within the U.S. Department of Health and Human Services, protects thepublic health by assuring the safety, effectiveness, and security of human and veterinary drugs,vaccines and other biological products for human use, and medical devices. The agency also is

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12/22/2020 FDA Warns Companies Illegally Selling CBD Products | FDA

https://www.fda.gov/news-events/press-announcements/fda-warns-companies-illegally-selling-cbd-products?utm_medium=email&utm_source=govdeli… 3/3

responsible for the safety and security of our nation’s food supply, cosmetics, dietarysupplements, products that give off electronic radiation, and for regulating tobacco products.

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Inquiries

Related InformationFDA Warning Letters (/inspections-compliance-enforcement-and-criminal-investigations/compliance-actions-and-activities/warning-letters)

What You Need to Know (And What We’re Working to Find Out) About ProductsContaining Cannabis or Cannabis-derived Compounds, Including Cannabidiol (CBD)(/consumers/consumer-updates/what-you-need-know-and-what-were-working-find-out-about-products-containing-cannabis-or-cannabis)

FDA is Committed to Sound, Science-based Policy on CBD (/news-events/fda-voices/fda-committed-sound-science-based-policy-cbd)

FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol(CBD) (/news-events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-including-cannabidiol-cbd)

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