Legalization of Cannabis Offers Potential Opportunities to Food Industry

Posted in Food Safety Consulting, Regulatory Compliance

Among the many sweeping changes that have occurred in recent decades, perhaps none is more remarkable than the drive toward legalization of marijuana.  

As of late 2018, numerous states have adopted expansive laws legalizing certain uses.  Other states are soon to follow.  In fact, there are currently only three states, Idaho, Nebraska, and South Dakota, where cannabis remains illegal in all forms.  

While the strict legal limitations imposed by federal law may soon begin to loosen, the current regulatory landscape creates some unique challenges (and, perhaps, even some opportunities) for food companies interested in using cannabis as an ingredient in their products.

Notwithstanding the varied legal ambiguities, inconsistencies, and questions, the cannabis industry is booming.  An ArcView Group report concluded, in 2015, that Cannabis was the fastest growing industry in the United States.  In 2017, the cannabis revenue in Colorado exceeded $1.5 billion, while produce revenue (grains, fruit, vegetables), amounted to only $1.7 billion.  This summer, Canada legalized adult-use marijuana nationally.  Cannabis is not likely going away.     

Cannabis has countless applications.  Perhaps the greatest distinction is between marijuana and hemp.  Hemp — also called industrial hemp — refers to the non-psychoactive (less than 1% THC) varieties of Cannabis sativa. Both hemp and marijuana come from the same cannabis species, but are genetically distinct and are further distinguished by use, chemical makeup, and cultivation methods.  Hemp has been used for industrial purposes for more than 10,000 years.  Its seeds, fibers, flowers, and stalks are used in health foods, organic body care, and other nutraceuticals among thousands of other products.

Cannabidiol (CBD) is one of the products derived from cannabis (usually hemp) that has achieved widespread popularity.  CBD is a naturally-occurring constituent of cannabis sativa plants. However, unlike Tetrahydrocannabinol (THC), CBD does not have psychoactive properties. Most people are familiar with THC, which is the ingredient in cannabis that impairs users. Unlike THC, CBD is a non-psychoactive cannabinoid and does not cause users to become physically impaired.

The early results of scientific studies, along with most of the anecdotal evidence, suggest that CBD can provide a multitude of medical benefits for a host of conditions.  For example, CBD appears to work as an anti-inflammatory, potentially providing relief for arthritis and other types of chronic pain.  And it also effects brain chemistry, potentially relieving anxiety and depression, among other conditions.  Currently, CBD is used in a wide array of products, including food and candy, oils and tinctures, lotions, salves, even coffee and other drinks.

CBD products containing less than 0.3% THC are typically derived from industrial hemp plants, which are not only legal in many states, but also became federally legal for cultivation by state authorized institutions after the 2014 Farm Bill was signed. 

Importantly, the updated 2018 Farm Bill proposes to remove hemp from the DEA’s list of controlled substances.  In turn, the bill allows each state to decide, for itself, if it wants to permit the sale of CBD products from hemp within its borders.  Once the Farm Bill becomes law, it will likely lead to a dramatic increase in the use and commercial viability of CBD in food edibles and products.  In turn, the CBD market is expected to rapidly expand in coming years, and many food companies are beginning to look for ways to capitalize on this new market. 

While there remains, as with any new endeavor, some amount of risk, as food regulatory consultants and lawyers, we invite any companies interested in learning more about the current regulatory landscape to contact us.  We stand ready to offer guidance, insight and advice to help you better understand this unique and rapidly growing industry.