CBD Products and the Regulatory Environment

CBD represents a solid market opportunity with lots of demand, but what does Federal and State law say? How do you make sure your business stands on solid ground?

• By David Kopf
• Nov 19, 2019

Disclaimer: This article is not intended as legal advice and is for informational purpose only. For legal advice, consult an attorney.

For a few years now, the consumer use of CBD and demand for those products has grown to the point where they expect it from trusted healthcare partners, such as HME providers. For their part, HME providers have started to offer those products, not only to serve their clients, but because CBD represents a major retail market opportunity.

There’s just one sticking point: CBD’s legal status. What we have watched play out over the last few years is a case where the law is having to play catch up with the market. Federal law has only recently caught up with the market, and states laws concerning CBD are inconsistent.

Federal Law

For some time, CBD products were existing in a legal grey area where the federal government was concerned. For all intents and purposes, the DOJ and DEA considered any part of cannabis, including CBD, a narcotic. That said, they had not enforced any laws when it came to so-called “industrial hemp” products that include less than 0.3 percent THC, which covers most CBD products.

Then came the 2018 Farm Bill, which was passed at the very end of the 115th Congress in late December. This law removed industrial hemp production from the Controlled Substances Act, and gave Federal protection to both hemp farmers and CBD sellers.

State Law

Apart from Federal Law, there are still state statutes with which providers must comply. This is where things get a little tricky because the situation with state laws concerning CBD is all over the map.

To begin with, there are 10 states where cannabis is entirely legal for medicinal and recreational use: Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington. In those states, it is legal to sell and use CBD oil.

Conversely, there are three states that legally prohibit all cannabis-derived products: Idaho, Nebraska, and South Dakota. In those states, CBD sales remain illegal.

Then there are 22 states that allow sales of medical marijuana, including CBD, to patients with a prescription and marijuana card. These are Arizona, Arkansas, Connecticut, Delaware, Florida, Hawaii, Illinois, Louisiana, Maryland, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, and West Virginia.

And there are 14 states that have very specific limitations on the sales of CBD and medical marijuana. For instance, Alabama allows CBD only for patients that suffer from seizures and are part of a state trial. These states are Alabama, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia, Wisconsin and Wyoming.

The National Organization for the Reform of Marijuana Laws provides useful state-by-state resources on its web site at norml.org.

So, how should a provider interested in CBD proceed? Well, after digesting this information, the very best thing a provider can do is seek out the consultation of an attorney with expertise in their state laws. An experienced attorney that understands local marijuana and CBD laws will ensure your business is standing on solid legal ground.