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CBD Industry Caught Between a Rock and a Hard Place

CBD companies in Nevada operate in a legal gray zone because of a lack of regulations from the federal Food and Drug Administration. While it is technically illegal to market ingestible CBD under the Food, Drug, & Cosmetic Act, the CBD industry has rapidly grown and offers many ingestible products. Regulatory uncertainty and problems with mislabeled products or unsubstantiated claims of therapeutic benefits continue to cause issues for CBD businesses.

The FDA governs hemp-derived CBD products. However, it has failed to issue regulations that could provide businesses with greater operational insight. At the same time, CBD businesses must contend with the potential of criminal liability under the federal Controlled Substances Act if the Department of Justice changes its stance and decides to pursue criminal actions against them.

Potential Regulatory Actions by the FDA

Before July 2020, the FDA took a few steps to regulate the marketing of CBD ingestibles. The only steps it had taken included holding a hearing, collecting data, reporting to Congress, and sending warning letters to companies that marketed products to treat certain conditions. Since July 2020, the FDA has taken several steps to provide greater regulatory certainty for the industry and to provide a legal pathway for marketing CBD products. 

The agency submitted a CBD testing report to Congress. It has also provided drafted guidance for clinical research into quality. A CBD enforcement policy was sent to the Office of Management and Budget for review and guidance. The National Institute of Standards and Technology announced a program for labs so that they can have greater reliability and accuracy in testing CBD products for different compounds, including THC and CBD. This program might help to differentiate between federally legal hemp products and federally illegal cannabis products.

In August, the Drug Enforcement Administration issued an interim final rule that it states is meant to align the DEA’s regulations with the Farm Bill. The Farm Bill legalized hemp crops. However, this interim rule could have a major detrimental impact on CBD companies. Under the interim rule, a derivative of hemp that contains a concentration of THC greater than 0.3% would be considered to be a Schedule I controlled substance under the Controlled Substances Act, potentially exposing many businesses to criminal liability. 

Navigating the landscape is difficult for CBD companies because of the regulatory uncertainties. A cannabis law attorney may offer guidance to help companies avoid potential problems.   

What Our Clients Say

My family and I are thankful to Maddox, Segerblom and Canepa for their assistance during a three year case regarding construction defects to our home. We are truly appreciative of their knowledge, determination and assistance during this process. They were always courteous, and available to answer any and all of our concerns and questions. Thank you for the wonderful resolution. Many thanks to you and your staff.

Frances Castelli

We used Maddox, Segerblom & Canepa to represent us in a legal suit re problems in construction on new properties that we purchased from a developer.

We were very pleased with the representation provided by this law firm. They were fully communicative, responsive to our questions and were very knowledgeable about the issues that required resolution. Even after we reached a resolution, they have been responsive in making sure to point us in the right direction for help with repairs that are required.

We would recommend them to others with similar issues that require legal help.

Atam & Margo Lalchandani

Maddox, Segerblom & Canepa did a FANTASTIC job in our construction defects case. I interacted with several people from their office throughout our 2 year litigation. Their staff is friendly, knowledgeable and always prompt about getting back to you when you have questions/comments/concerns. I especially enjoyed working with Darcy, Ardea, Eva, and Sandra. Being part of a lawsuit is no fun for anyone, but if you have to be a part of one, I can’t say enough positive things about this firm!

Victoria Fox

The law firm of Maddox, Segerblom, and Canepa were amazing to work with. They were thorough and always available for any questions we had. We worked a lot with Sandy who was always professional, friendly, always on time for appointments and just a great person to represent this firm. We have never been involved in a law suit before and they made it comfortable for us. We appreciate the hard work the lawyers and people who work for the firm did and would recommend them.

Becky Loudenburg
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