Alcoholic Beverages with CBD Will Have to Wait

The passage of the 2018 Farm Bill modified the Controlled Substances Act to exclude hemp from the definition of marijuana. With the deschedulization of hemp, cannabidiol (CBD), which is derived from hemp, has had quite the boom. CBD infused products seem to be popping up everywhere and are a hot commodity in the wellness industry in particular. However, with the recent guidance from the Alcohol and Tobacco Tax and Trade Bureau (TTB), it appears producers of alcoholic beverages are still going to have to wait to jump on the CBD train.

Since the passage of the 2018 Farm Bill, the TTB, which falls under the U.S. Department of Treasury and regulates alcohol formula approval, has received numerous inquiries from industry members about producing alcoholic beverages that contain hemp-derived ingredients such as CBD.  The TTB recently issued an industry circular clarifying its stance on this issue. The biggest takeaway from the circular indicates that the TTB will not approve the use of hemp ingredients in alcoholic beverages. After consulting with the Food and Drug Administration (FDA), the TTB has decided to return any applications for formulas containing “hemp” ingredients for correction and give applicants the option of resubmitting the formula upon a favorable determination from the FDA on the regulatory status of the ingredients. However, the TTB will continue to process applications for formulas for alcoholic beverages that contain ingredients derived from hulled hemp seeds or hemp seed oil because the FDA has recognized those products as generally safe.

Essentially, the guidance provided by the TTB in its industry circular follows the FDA’s guidance on CBD and THC since the enactment of the Farm Bill. Despite the passage of the Farm Bill, Congress preserved the FDA’s ability to regulate cannabis-containing products under the Food, Drug and Cosmetic Act (FD&C Act), and according to the FDA, it is still unlawful to deliver or introduce into interstate commerce any food with added CBD. For now, it seems the safest way for members of the alcohol industry to benefit from the CBD boom is to stick with the FDA-approved products such as hemp seeds or hemp seed oil. Even with these approved products, the TTB will still require laboratory analysis of “hemp” ingredients to ensure they are not a controlled substances under federal law.

Industry members hoping for a different response from the TTB may still have reason to be optimistic about the future of CBD in alcohol beverages. The TTB works closely with the FDA and specifically stated in the circular that it will continue to consult with the FDA to determine whether the use of hemp ingredients would violate the FD&C Act. Notably, the FDA recently announced that it will hold a public hearing on May 31, 2019 “to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.” Former FDA Commissioner Scott Gottlieb, MD, has stated that “the public hearing will give stakeholders an opportunity to provide the FDA with additional input relevant to the agency’s regulatory strategy related to existing products, as well as the lawful pathways by which appropriate products containing cannabis or cannabis-derived compounds can be marketed, and how we can make these legal pathways more predictable and efficient.” It appears, at least for the time being, that the FDA is willing to consider lawful pathways for CBD products in the food marketplace. If the TTB continues to consult with and give deference to the FDA’s approach on this topic, we may see a change in the TTB’s position on this issue down the road, so stay tuned

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