Change of Administration Delays CBD and Hemp Regulations

With the recent change of administration, the FDA’s long-awaited enforcement guidance on cannabidiol (CBD) is now on hold...

The transition from President Donald Trump to President Joe Biden will result in significant policy changes, and the cannabis industry is already feeling the impact. The U.S. Food and Drug Administration’s (FDA) long-awaited enforcement guidance on cannabidiol (CBD) is now on hold. In addition, the U.S. Department of Agriculture’s (USDA’s) final hemp rules must now be reviewed by the Biden Administration before taking effect.

FDA CBD Enforcement Guidance

While the 2018 Farm Bill legalized hemp, it is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement. As discussed in greater detail in prior articles, the FDA is currently in the process of determining how to approach CBD regulation. 

The FDA submitted its Cannabidiol Enforcement Policy Draft Guidance for Industry to the White House Office of Management and Budget (OMB) this summer, sparking hope that long-awaited industry guidance was on the horizon. However, the OMB pulled the FDA guidance from its review process in response to a memorandum issued by President Biden.

The memo, entitled “Regulatory Freeze Pending Review,” directs that proposed rules should not be sent to the Office of the Federal Register (OFR) until a department or agency head of the new administration reviews and approves the rule. With respect to rules that have been sent to the OFR but not published in the Federal Register, they must be immediately withdrawn from the OFR for review and approval.

It is unclear if the FDA will deviate from its methodical approach to CBD regulation under the Biden Administration. There is also no timeline for when the FDA may resubmit its proposed guidance. In a statement to Hemp Industry Daily, a spokesperson for the FDA said that the agency “will work closely with the new administration to advance appropriate regulations and policies that are in line with the agency’s public health mission.”

USDA Hemp Regulations

On January 15, 2020, the USDA published its much-anticipated Final Rule on Establishment of a Domestic Hemp Production Program. While the USDA’s hemp regulation is much further along in the rulemaking process than the FDA CBD guidance, its fate is also uncertain.

With respect to rules that have been published in the Federal Register, or rules that have been issued in any manner, but have not taken effect, the Biden Administration’s memo recommends that agencies consider postponing the rules’ effective dates for 60 days from the date of the memorandum for the “purpose of reviewing any questions of fact, law, and policy the rules may raise.”  The memo also recommends that agencies consider opening a 30-day comment period during the 60-day postponement period, and consider pending petitions for reconsideration involving such rules. 

The good news is that the USDA’s Final Rule has not been officially withdrawn or placed on hold. A USDA spokesperson told Hemp Industry Daily that “we have no specific programs or rules to point to at this time that are on hold, but it’s proper for a new administration to have adequate time to review existing programs as well as those implemented by the previous administration in the final days of their tenure.” Another positive development is that the Biden Administration’s pick for Agriculture Secretary, Tom Vilsack, is considered to be a friend of the hemp industry.

Key Takeaway

While there was hope that 2021 would bring greater legal certainty to the hemp industry, it appears we may need to wait a little longer. In the absence of clear regulations, it is imperative to stay up-to-date on the latest legal developments and to consult with an experienced cannabis attorney who understands how to navigate the complex and rapidly evolving regulatory landscape.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• USDA Unveils Final Hemp Rule – Key Takeaways for the Cannabis Industry
• New York Publishes Comprehensive Hemp Regulations
• New Jersey’s Proposed Recreational Cannabis Licensing Framework

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.