Hemp: Lessons Learned from Prohibition

From the 1860s until 1920, the cocktail flourished in America as a truly free libation; profitable and reliable in good spirit from careful regulation. In 1919, The Volstead Act made alcohol illegal, initiating an era of federal enforcement. With Prohibition, the government left the alcohol market in place but underground, thus stripping it of regulation and oversight. However, bootleggers seized the opportunity of a still thriving demand, and pioneering individuals found legal workarounds to circumvent proscription. However, this era was also a dangerous one for the consumer of illicitly produced spirits. The country witnessed a plague of public health issues from the lack of regulation of toxic ingredients.[1]

In 1928, thirty-three people died from methanol poisoning.[2] According to the Federal Grand Jury overseeing the case, Federal authority was immaterial. This did not have to do with alcohol, a federal issue because of its illegality; this had to do with poison, which remained under the plenary power of the states.[3] Only when Prohibition was repealed in 1933 did the public health harms of alcohol adulterants begin to fade. Federal regulation facilitated the demands of the market by allowing for safe, reliable products and the legitimization of business.

Lessons Learned from Prohibition

The Current ‘States’ of Cannabidiol and Industrial Hemp

Safety concerns similarly arise with the regulation of industrial hemp and its derivatives. Newly harnessed cannabinoids are emerging from decades of prohibition governed by a shifting patchwork of state and federal law. Hemp remains one of the oldest domesticated crops, but the passage of the 1937 Marihuana Tax Act and the 1970 Controlled Substances Act aligned hemp with marijuana and drugs like heroin, despite its lack of psychoactive properties. The Controlled Substances Act (“CSA”) exempts the mature stalks and sterilized seeds of the plant, Cannabis sativa L.,from the definition of marijuana and accordingly federal enforcement, making the importation, processing, manufacturing and sale of exempted parts legal. This exemption is how Americans are able to purchase hemp seeds, hemp shampoos, hemp clothing, and other hemp derived products in the US. Importation and the creation of hemp products has been legal but, until 2014, cultivation and possession of the cannabis plant remained against the law.

In 2014, the passage of the Farm Bill finally permitted US hemp production: allowing institutions of higher education and state departments of agriculture to cultivate industrial hemp for research purposes (including market research); and exempting this hemp from the CSA. Instead of classifying hemp based on specific parts of the plant, the Farm Bill uses THC content. “Industrial Hemp” is defined as any part of the cannabis plant, whether growing or not, with a delta-9 THC concentration of not more than 0.3 percent on a dry weight basis. Any plant with a higher THC concentration is considered marijuana and not protected under the Farm Bill. The scope of permissible commercial activity under the Farm Bill is debated but requires some nexus to research. Forty states have seized on this new legal hemp opportunity and adopted some form of hemp legislation. The 2014 Farm Bill expires September 30th but another hemp amendment to the 2018 Farm Bill would continue the legal protections while expanding the market by eliminating many limitations in the current Farm Bill.

Lessons Learned from Prohibition

After the enactment of the 2014 Farm Bill and the continued growth of the hemp and CBD market worldwide, the US hemp industry became a $688 million-dollar market, with CBD products accounting for $170 million in 2016. Hemp is projected to become a billion-dollar industry by 2020.[4][5]

With state and federal food and drug laws often prohibiting cannabis-derived products, the regulation of consumable hemp products lacks many modern health protections. The Food and Drug Administration (the “FDA”) is charged with protecting public health by preventing fraudulent activity with respect to food, drugs, cosmetics and devices in interstate commerce. These safety requirements are established within the Food, Drug, and Cosmetic Act (“FFDCA”), which prohibits “adulterated” or “misbranded” products.[6]  With hemp, the FDA has taken enforcement action against products in violation of the FFDCA, issuing warning letters to businesses marketing and selling CBD as misbranded drugs intending to cure, treat, mitigate or prevent medical ailments. Otherwise, the FDA’s failure to recognize CBD as a lawful, safe ingredient in food products or supplements (despite significant evidence of safety and lack of potential for abuse) creates a regulatory gap, opening the door to bad actors.

Like alcohol in the 1920s, the muddled legal waters of prohibition have left the states to regulate consumable hemp products as a matter of public health. This creates a patchwork of law that causes confusion for police, businesses and regulators.

In Utah, December of 2017, 31 people went to the hospital for synthetic CBD poisoning.[7]  They had all intended to buy hemp-derived CBD oil, but the products instead contained 4-cyano CUMYL-BUTINACA (“4-CCB”), a synthetic cannabinoid designed to mimic the effects of THC.[8] Cannabis-derived CBD, as well as THC, cannot cause death, but synthetic cannabinoids can because of how they interact with the body’s regulatory functions in ways that natural cannabinoids do not. These harms are not limited to the unregulated U.S. markets as 4-CCB fatalities have been reported in Europe.[9] As alcohol prohibition exemplifies, there are serious dangers to not regulating a previously banned substance and inconsistent state protections pose real public health harms.

Lessons Learned from Prohibition

In Texas, hemp cultivation is still illegal and CBD products are sourced from international retailers and U.S. states with agricultural pilot programs. The Texas Department of State Health Services (the “DSHS”) recognized the regulatory gap and in response, the DSHS almost established rules designating CBD as an “adulterant”. This would have effectively prohibited the valuable cannabinoid in consumables products and dietary supplements. However, pushback from the public and the hemp industry caused the DSHS to shift its path and gather more information about CBD products before adopting new rules.

Colorado leads in industrial hemp and CBD regulation; one of the first to adopt a robust program under the Farm Bill, to engage in legitimate research, and to amend its food and drug laws to contemplate hemp. Regulation ensures manufacturers are engaging in GMP and standard practices to certify the safety of any product.The Colorado Department of Public Health and Environment (the “CDPHE”) issued a policy statement that allows for the use of all parts of the industrial hemp plant in food, so long as certain conditions are satisfied.[10] Colorado regulates CBD and industrial hemp with policy aiming to ensure safety, consistency and reliability by establishing requirements on lawful sources and regulated food grade facilities. This regulation of industrial hemp and CBD has allowed a burgeoning market to grow in the state.

Hemp’s prohibition, like that of alcohol, brings a new set of potential public health concerns. Despite sporadic federal enforcement from the FDA, the issue has largely been left to the states. Pending federal legislation might establish a nationwide regulatory framework, signaling the beginning of a new epoch in American hemp history. In the meantime, state regulators and industry stakeholders must not only take steps to ensure responsible regulation, they must work to standardize best practices created in developed markets.


[1] Michael Lerner, Unintended Consequences, Public Broadcasting Service, https://www.pbs.org/kenburns/prohibition/unintended-consequences/.

[2] National Affairs: No Beverage, Time Magazine, Oct. 28, 1928, https://content.time.com/time/subscriber/article/0,33009,732023,00.html.

[3] Id.

[4] Debra Borchardt, Hemp Cannabis Product Sales Projected to Hit $1 Billion in 3 Years, Forbes, Aug. 23, 2017, https://www.forbes.com/sites/debraborchardt/2017/08/23/hemp-cannabis-product-sales-projected-to-hit-a-billion-dollars-in-3-years/#50c83f14474c.

[5] Bruce Kennedy, Hemp Products Booming, but U.S. Farmers Hampered by Its Schedule 1 Status, The Cannabist, June 8, 2017, https://www.thecannabist.co/2017/06/08/hemp-products-united-states-farming/80796/.

[6] Enforcement of the Food, Drug, and Cosmetic Act: Select Legal Issues, Feb. 9, 2018, https://www.everycrsreport.com/reports/R43609.html.

[7] Ed Cara, At Least 52 People in Utah were Poisoned by Fake Cannabis Oil, Gizmodo, May 25, 2018, https://gizmodo.com/at-least-52-people-in-utah-were-poisoned-by-fake-cannab-1826324863.

[8] Id.

[9] Id.

[10] Industrial Hemp Policy Statement, Colorado Dep’t Pub. Health and Env’t (2018), https://www.colorado.gov/pacific/sites/default/files/DEHS_MfgFd_IndustrialHempPolicy_FY18.pdf.


 

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