CBD Online Sales Regulations
Insights into the state of the FDA regarding CBD and CBD products include aspects of false claims regarding the benefits of CBD products, federally unapproved and misbranded drugs, and increased funding to develop CBD policies. Equally, insights into CBD online sales regulations show that a lot of concern and emphasis revolves around the labeling and marketing of CBD products.
I. State of the FDA Regarding CBD
- In September 2019, three companies were issued with warning letters by the U.S. Federal Trade Commission (FTC).
- According to the FTC, the three companies sold CBD products, in particular, "oils, tinctures, capsules, gummies, and creams" without providing substantial scientific proof that the products can cure human disease.
- Most of the CBD products are marketed with claims to reduce symptoms of autism, cancer, hepatitis, and other severe conditions. Therefore, such drugs should not be self-diagnosed by people who are not medical practitioners.
- The FDA advises manufacturers of CBD products to play it straight and avoid making false promotions and extravagant claims about the benefits of their CBD products.
- Overall, the FDA remains adamant that companies selling CBD products with false claims will receive warning letters or become involved in litigation.
Unapproved and Misbranded Drugs
- In November 2019, the FDA issued warning letters to 15 more companies selling CBD products. The FDA claims that the products "constituted unapproved new drugs, misbranded drugs, adulterated human foods, unapproved new animal drugs, and/or adulterated animal foods."
- Again, in December 2019, the FTC, along with the Food & Drug Administration (FDA) jointly issued a warning letter to a company selling many CBD products, terming them "unapproved new drugs and misbranded drug products."
- The FDA claims that the CBD products sold by those companies were “misbranded drugs.” Moreover, the drugs violated the Food, Drug, and Cosmetic Act because they included labeling with insufficient directions for use.
- In the absence of a rigorous regulatory framework, the FDA's stance regarding CBD products is that any business selling such products must be careful regarding marketing the products as health treatments or foods.
Budget for CBD Enforcement
- An additional $5 million will be allocated to the FDA to facilitate regulatory and enforcement activities regarding CBD products.
- The funds will allow the FDA to expand its regulation regarding the use of CBD products, and FDA-regulated dietary supplements.
- The new funding supports the formulation of policies around CBD, reviewing product applications, targeted research, inspections, etc.
- Despite the continued progress on the regulatory aspect of CBD, the Consumer Healthcare Products Association (CHPA) recently filed a citizen's petition challenging the FDA to create pathways to sell dietary supplements with CBD legally.
II. CBD Online Sales Regulations
Regulation Around Selling CBD Online
- Selling CBD online is legal, as long the state approves CBD products, and the THC content in those products adheres to the minimum THC limit of 0.3%.
- Only hemp-derived products are approved for sale online. Sellers must also adhere to "product-based shipping restriction rules."
- Importantly, sellers must refrain from making false claims about diseases and health benefits that are not approved by the FDA.
Labeling of CBD Products
- Research findings note that all CBD products must be labeled and marketed as per the Federal Food, Drug, and Cosmetic Act (FD&C Act). The labeling varies depending on whether the CBD product is a cosmetic, device, dietary supplement, or food.
- As a seller of CBD products online, research findings suggest that labeling should provide robust information on the ingredients and dosing.
- Likewise, the labeling should feature a URL or QR code leading to the testing results of the products and a Certificate of Analysis (CoA).
Shipping Carriers and Logistics
- Shipping CBD products across states would require complying with the respective laws and regulations governing the sale and distribution of CBD within the state.
- Sellers are unlikely to experience hurdles regarding shipping CBD products because CBD is federally legal. However, they must follow the guidelines regarding any action on the sale and distribution of CBD products.
- Currently, the United States Postal Service (USPS), FedEx, UPS, and DHL are examples of logistics services providers that can ship CBD products.
CBD Payment Gateways
- With the lack of proper regulation around CBD, ecommerce merchants face a tough time trying to find a reliable payment processing gateway.
- Authorize.Net is an example of a payment gateway that currently processes CBD transactions. Agents such as Magento, Drupal, Jigoshop, PrestaShop, etc., support credit card transactions for CBD.
- To get an online CBD license, one has to provide processing statements and business bank statements from three of the most recent months.
Specifics with the State of California
- Unlike other states, California considers CBD a marijuana product and is legally available from state-approved medical marijuana dispensaries.
- In California, recreational marijuana is legal statewide. However, it is currently not available in food products until the state enacts relevant regulations.
- State-sanctioned companies in California can grow marijuana and produce THC extracts; however, the same companies are not allowed to manufacture CBD-rich hemp extracts.
Specifics with the State of New York
- In New York, CBD is legal, but it is illegal to add CBD to food. The state will soon demand all shops selling CBD oils to have a license from the state.
- The state has a body dubbed the Industrial Hemp Agricultural Research Pilot Program, which allowed only a fraction of academic institutions to grow hemp for research.
- In 2019, New York’s legislative session passed a bill to legalize the growing of hemp in the state.
- Interestingly, "card-carrying medical marijuana patients" are legally allowed to possess cannabis oil; however, for other people, if caught with CBD oil are issued with a ticket or minor drug possession charges.
Your research team searched for the most recent regulatory information about the FDA's position regarding CBD products. The reports explored include government databases, business websites, local news outlets, etc., and include Jsupra, Big Commerce, Digital Commerce 360, 3D Cart, etc. We also searched for the CBD regulatory frameworks for California and New York individually to be able to identify any specifics for each state. These sources featured information and insights into the CBD regulatory landscape in the nation. Overall, the insights provided focus more on the FDA's position regarding legalizing CBD products.