Lawyers skeptical FDA warning letters will chill delta-8 THC market

FDA’s recent batch of warning letters to marketers of delta-8 THC is unlikely to cool the sale of these products in the U.S., some legal experts said, citing the agency’s lack of follow-up enforcement actions in cases involving CBD and other ingredients.

State legislatures and regulatory agencies, however, are expected to continue to clamp down on delta-8 THC in the wake of FDA’s letters.

“I largely suspect there will be little chilling effect, if any, toward the sale of delta-8 products,” said Garrett Graff, a partner in Denver with Moye White LLP. “FDA’s rhetoric in writing but lack of actual enforcement activity does not particularly threaten or cause fear for those in the hemp industry.”

Graff suggested marketers of delta-8 THC products are accustomed to taking risks. “Many companies that are engaging in the sale of these products recognize that there’s a lot of regulatory uncertainties at the federal level but also then at the state level,” he said.

In the warning letters, FDA asserted the companies are marketing their delta-8 THC products as unapproved treatments for medical conditions or for other therapeutic uses. In addition, FDA identified drug misbranding violations since labels failed to include adequate directions for use as a drug.

Related:Delta-8 THC marketer faces ‘conundrum’ after receiving FDA letter

Also, FDA said delta-8 THC was improperly added to such food as caramels, chewing gum, chocolate, gummies and peanut brittle. The agency contends CBD and delta-8 THC are unapproved food additives for use in any animal or human food product.

Mark Hubbard, chief science officer of M Six Labs Inc., said he faces a quandary after his company received a letter from FDA that identified improper marketing claims and other issues related to delta-8 THC and CBD, two substances from cannabis that are intertwined since delta-8 THC is typically made from hemp-based CBD through a process of chemical synthesis. 

“We have a conundrum on how … we function as a business without being able to market our business,” Hubbard told Natural Products Insider. “This is a big problem. Now, I’m being handicapped versus everybody else.”

The companies who received the letters could be subject to legal action, including an injunction and/or a seizure of their products, if they fail to address the purported violations of law identified by FDA, the agency said. FDA requested written responses from the companies within 15 working days, disclosing how they will address the infractions and prevent them from reoccurring.

Ideally, from regulators’ perspective, a batch of warning letters would cause not only the recipients to change their behavior but also the broader industry to come into greater compliance with the Federal Food, Drug and Cosmetic Act.

Attorney Marc Ullman counsels businesses on FDA regulations, with a focus on the natural products industry. Asked whether the warning letters will chill the delta-8 THC market, he responded, “Zero. Not at all.”

Ullman, who is of counsel to Rivkin Radler LLP and based in Uniondale, New York, described the letters as “enforcement theater.” He referenced FDA warning letters to CBD companies to highlight why letters—like those sent to marketers of delta-8 THC—“have zero impact.”

He described the CBD market as being in a state of "purgatory" since FDA asserts it's illegal in food and supplements, yet doesn't follow up with a court action that would give industry stakeholders standing to challenge the agency's position. 

FDA's lack of follow-up is "a disservice to the public health," especially if it believes certain ingredients are unsafe, as is the case with CBD, Ullman said. 

FDA's history with CBD doesn’t mean states won’t continue to impose restrictions or regulations on the sale of delta-8 THC.

“I believe the FDA’s warning letters, in combination with increasing public safety concerns and state prohibitions or restrictive regulations on delta-8 product, will cool sales of delta-8 in the U.S. marketplace, or shift those sales to state-regulated marijuana stores where regulations are designed for high THC products,” Shawn Hauser, an attorney in Denver who co-chairs the Hemp and Cannabinoids Department at Vincente Sederberg LLP, said.

Robert Hoban, a partner in Denver with the law firm Clark Hill PLC and one of the pioneers in the practice of cannabis law, said he doesn’t believe FDA’s warning letters will produce “a direct chill” on the sale of delta-8 THC products.

However, he predicted the letters “will prompt state legislatures … to actively push something to the finish line.” Hoban pointed to a Colorado bill that was amended after the FDA warning letters were issued. SB 22-205 was passed last week in the state legislature and is awaiting signature by Gov. Jared Polis.

The bill concerns the regulation of cannabis products that may cause intoxication, or what Hoban described as “the marijuana industry putting the reins on the hemp industry.”

Among other things, the bill would direct the Marijuana Enforcement Division to create a task force to study intoxicating hemp products and make legislative and regulatory recommendations to regulate industrial hemp, Hauser observed. In addition, the bill authorizes the Colorado Department of Public Health and Environment (CDPHE) to issue rules to bar chemical conversion, modification or synthetic derivation of intoxicating THC in final products, she added.

In large part, the delta-8 THC industry sprang up due to inaction by FDA in creating rules for hemp derivatives, said Hoban, who doesn’t anticipate federal regulations being issued “anytime soon.”

“I don’t think it’s a priority at all,” he said in an interview. “This creates a gray area, where states need to step in and create something if” they want to control or restrict the sale of delta-8 THC products.

For several years, in warning letters and other public declarations, FDA has asserted CBD cannot be lawfully added to food or marketed in a dietary supplement since it was first studied as a drug. Nonetheless, the cannabis-derived ingredient continues to be marketed widely in food, supplements and other products across the U.S.

Last year, the U.S. was home to 2,000 CBD brands, down from a peak of 3,500 in 2019, according to Brightfield Group, a market researcher focused on the cannabis industry. Bethany Gomez, managing director of Brightfield Group, said the “exodus” of brands following the pandemic has slowed down.

“We are seeing new small brands enter the market of CBD again, which is replacing some of the existing small brands that have closed up shop,” she said via email.

Lawyers said they are unaware of any FDA enforcement actions in federal court against firms selling CBD, based on the legal status of the ingredient as a dietary supplement or food, for example.

FDA certainly could take enforcement action if companies targeted by FDA in the delta-8 THC warning letters don’t adequately respond to the agency, said attorney Rend Al-Mondhiry, who advises companies on compliance and regulatory matters. She cautioned such enforcement action might take several months to unfold.

“In cases where companies have continued to sell products that violate GMPs [good manufacturing practices] or continue to make disease claims, FDA has sought injunctions and worked with DOJ (U.S. Department of Justice) to take further action beyond warning letters, and they could certainly do this in the case of delta-8 THC,” said Al-Mondhiry, a partner in Washington, D.C., with Amin Talati Wasserman LLP.

She said it appears hemp industry stakeholders were raising concerns about delta-8 THC well before FDA and the Centers for Disease Control and Prevention issued warnings on the ingredient in the early fall of 2021.

“I don’t know why it took so long and then it seems like these warning letters were also a long-time coming as well,” the lawyer added.

Chris Hudalla is president and chief scientific officer of ProVerde Labs, which provides analytical testing services to the cannabis industry. He was among the industry stakeholders to raise acute concerns about delta-8 THC.

Hudalla is concerned with contaminants that he said are inadvertently produced during the chemical synthesis process of transforming CBD to delta-8 THC, and he said many of these products are being distributed throughout the country without verifying the age of consumers. Several adverse events linked to delta-8 products involve children, and many products are mislabeled and often fail to indicate they contain THC, according to Hudalla in an email to Natural Products Insider.

His reaction to the FDA warning letters?

“[Surprised] that it took so long to take any action, and that the action taken was so minimal, sending out warnings to only a few producers,” he responded. “Are they ‘in’ or are they ‘out’? As a federal agency, they have for the most part resisted getting involved.”

In summary, Hudalla questioned the logic of FDA dipping its “toes in the water by sending out just a few warning letters.”