It would be far better to call a CBD license a mixed bag of regulatory permits. However, since so many who deal in the cannabis industry are accustomed to applying for and obtaining cannabis business licenses, some refer to the CBD market as requiring their own set of certifications. To put it lightly, those who engage in CBD commerce face very unique challenges when investing their time and money into product development, marketing, manufacturing, and ultimately distribution.
There is no shortage of companies who found themselves in trouble with both federal and state agencies for non-compliance and put at risk their entire ventures on even a single transaction. Yet, so many companies and brands thrive in pocket markets and remain untouched by adulteration enforcements. How can this be?
To best prepare for the evolving CBD license industry, we recommend highly for anyone seeking to enter the cannabis or CBD/hemp-derived market to consult with an attorney to address their unique circumstances.
Yes, but under very limited circumstances. The type of market and product a business is engaged in will determine the kind of allowable activity and how robust the regulatory oversight will be. For instance, on the far end of the spectrum would be the example of the the US Food and Drug Administration (FDA) approving a cannabis-derived CBD drug called Epidiolex to treat seizures connected with two rare forms of epilepsy. That same license allows the drug to be marketed with therapeutic claims for potential consumers. Considering how few of these licenses exists, this is not exactly the kind of license most businesses have the time or resources to pursue.
At the same time, hemp derived CBD can be extracted through state approved programs that mostly permit industrial hemp growers to engage in commerce so long as they are registered with their governing authority, but the processing, manufacturing, and distributing of those products fall under several different versions depending on what state you are dealing with. In other words, neither of the above examples fall under a specific title such as a “CBD License”, but the regulatory scheme these businesses operate under effectively do so. Keep in mind that in California, this hazy line is getting more clearer by the month and businesses are starting to operate more freely so long as they keep their permits and records in order.
Therefore, for tinctures and sublingual usage, the particular state a business is in will depend entirely on the allowable structure from the department of agriculture.
Many focus their attention on which products may included infusions or additives of CBD ingredients, which is when CBD licensing becomes very tricky. In most circumstances, CBD infusions into food are prohibited under the FDA’s rules and may not enter into interstate commerce. To better understand why this confusion exists, one must understand that the US Food and Drug Administration (FDA) has a strong interest in providing safety to the public on what they consume.
So even though there are many state licenses to manufacture, cultivate, distribute, and infuse cannabis based products, these are for a different type of consumption. In other words, ingestion by smoking or vaping does not carry the same regulatory scrutiny as consuming.
More specifically, the Food, Drug, and Cosmetic Act (FD&C) specifies that food additives must be tested and deemed safe for the intended use. Without FDA approval, the agency can enforce seizure and penalties on manufacturers that distribute adulterated products. The FDA may consider allowing pharmaceutical ingredients (such as those derived from cannabis) into food products or dietary supplements but would only do so if all the FD&C requirements were met under food additives and dietary supplements.
Other ingredients derived from the cannabis plant may be used in foods and dietary supplements where those parts do not contain CBD or THC. Manufacturers and distributors who wish to market their products as dietary supplements may do so by providing notice to the FDA where that notification includes information that demonstrates that a new dietary ingredient will be reasonably expected to be safe under the conditions of use recommended or suggested through labeling.
To learn more about obtaining a CBD license, feel free to contact us for an evaluation of your business model and requirements.