Hemp CBD industry facing uncertainties during election year

U.S. Sen. Mitch McConnell has long been a powerful advocate for the hemp industry.

It was McConnell who spearheaded legislation incorporated into the 2018 Farm Bill that removed hemp and its derivatives from the Controlled Substances Act (CSA)—and the Kentucky Republican could prove invaluable in garnering support for a bill that would pave the way for the lawful marketing of CBD-containing dietary supplements.

Amy McGrath, a Democrat, is trying to unseat the 78-year-old McConnell, who was first elected to the Senate in 1984. As of early August, McGrath was trailing McConnell in the polls by about five percentage points, The New York Times reported. Even if McConnell prevails, he would lose his position as Senate Majority Leader if the Democrats take control of the Senate following the 2020 election.

“Our biggest champion for hemp and CBD without question has been Mitch McConnell,” said Jonathan Miller, general counsel to the U.S. Hemp Roundtable, in an interview. “Some would argue if he were no longer majority leader, that would hurt our industry.”

If Sen. Chuck Schumer (D-New York) rose to become majority leader of the Senate, Miller predicted McConnell would be named minority leader. Schumer himself has been active on hemp issues. In a letter sent in August to Agriculture Secretary Sonny Purdue, Schumer raised concerns that USDA’s interim rules on hemp production would “hinder the advancement of the hemp industry and create significant compliance costs both for state governments and producers.”

The hemp industry is “well positioned” no matter what happens in the 2020 election, Miller said.

Kelly Fair, director of legal in the U.S. for Canopy Growth Corp., the cannabis company based in Canada, offered a similar assessment. Canopy Growth is equally welcome in the offices of McConnell and Ron Wyden (D-Oregon), she said in an interview. "Everybody that supports farmers supports this industry. I don't know if a change in administration is going to have that great of an impact." 

Awaiting guidance

CBD marketers, though, face an uncertain future. As of late summer, an FDA policy of enforcement discretion related to CBD remained pending before the White House’s Office of Management and Budget (OMB). In conversations with FDA, the U.S. Department of Health and Human Services (HHS) and the White House, industry representatives have discussed the kind of enforcement discretion they would like to be incorporated in a guidance document.

Government officials have not disclosed the substance of the document pending before OMB, “Cannabidiol Enforcement Policy; Draft Guidance for Industry.” Fair, who spoke on a July 31 call with government officials about enforcement discretion, confirmed there was “no hand tipping from either OMB or the FDA.”

The actual contents of the document could influence how industry feels about turnover in the White House or another four years under a Trump administration.

“If the FDA comes out with really bad guidance that is upsetting to the industry, then it could be argued that maybe a Democratic president would have an FDA that’s more favorable to industry,” Miller said. “But again, it’s wait and see.”

Legislative fix?

Regardless of the guidance and outcome of the presidential election, the hemp industry is likely to continue to look beyond FDA and the White House to Congress for legislation that would create a lawful pathway to market for CBD-containing dietary supplements.

According to FDA, because CBD was first the subject of “substantial clinical investigations” instituted and made public, it is excluded from the definition of a dietary supplement. A bill introduced in early 2020 by Rep. Collin Peterson (D-Minnesota) would allow CBD to be lawfully marketed in supplements and conventional food, but the legislation hasn’t advanced in the House of Representatives.

While Peterson chairs the House Committee on Agriculture, some Washington insiders said lawmakers with jurisdiction over dietary supplements may want to spearhead CBD legislation. Rep. Frank Pallone Jr. (D-New Jersey) is chairman of the House Energy and Commerce Committee, which oversees FDA and whose jurisdiction extends to cosmetic, food and drug issues.

It’s possible two CBD bills will be introduced soon in the Congress—one focused on dietary supplements, the other on food, Miller said. Although the lawyer described as “slim to none” the chance of a stand-alone CBD bill making it through Congress and to the desk of the president, he expressed optimism that something resembling Peterson’s bill would be attached to a must-piece pass of legislation.

Miller predicted the new legislation would clarify CBD manufacturers must comply with existing regulations covering dietary supplements and conventional food under the Federal Food, Drug and Cosmetic Act (FD&C), such as cGMPs (current good manufacturing practices) applicable to dietary supplements.

The hemp industry has grown impatient with a state of regulatory uncertainty during a year of financial woes facing hemp farmers, processors and marketers. While FDA has been exploring the possibility of a CBD rulemaking and evaluating the safety of the compound, it hasn’t committed to adopting a regulation for CBD in supplements or conventional food. Such a rulemaking process could take several years to complete, FDA and people outside the agency warned.

Some lawmakers on Capitol Hill may be reluctant to act on matters within FDA’s authority.

“The Congress generally has respectful relationships with regulatory agencies, and the regulatory agencies have their points of view considered,” said Michael McGuffin, president of the American Herbal Products Association (AHPA), in an interview. “And what we’ve heard is that FDA’s points of view have been considered in any legislative fix, and that they [FDA officials] have not exhibited much wholehearted support for a kind of blunt resolution.”

Although McGuffin is not “pessimistic” about a resolution in Congress to the CBD conundrum, he’s not overly bullish either about a favorable outcome in the near term.

“I’m not willing to call it as a likely victory in the 116th Congress,” he said.