We have been tracking the flurry of regulatory activity surrounding hemp-derived cannabidiol (CBD) following passage of the Farm Bill in 2018. As more companies enter the CBD consumer space, branding will play a key role. However, the Patent & Trademark Office’s position is that trademark protection is not available for products and services not deemed lawful under federal law. As we have discussed in prior posts,[1] whether hemp-derived CBD is considered federally legal will depend on how this cannabis-derived compound is regulated by the Department of Agriculture and the Food & Drug Administration (FDA). In this post, we focus on cosmetics.

The FDA recently released a statement and answers to “Frequently Asked Questions” regarding the likely impact of FDA regulation of CBD-containing products. FAQ 13[2] relates to cosmetics and non-therapeutic topicals. Unlike other products that are regulated by the FDA (e.g., drugs), cosmetics that are devoid of harmful or adulterating additives are, in general, not subject to pre-market approval. Consistent with this, FAQ 13 concludes that “FDA can take action if it has information that an ingredient or cosmetic product is unsafe to consumers.” In other words, FDA has not specifically indicated that pre-market approval would be required.

From a consumer products perspective, this could mean that a federally-legal market for hemp-derived CBD-containing cosmetics may be on a faster track than other product categories (e.g., drug, food, beverage, dietary supplements), assuming appropriate sourcing and marketing (e.g., no health claims). But this also assumes that the FDA considers CBD to be harmless, not biologically active, and not a drug.

Notably, in response to announcements by CVS and Walgreens that they plan to start selling CBD topicals in a select states, the outgoing FDA Commissioner (Dr. Scott Gottleib) tweeted: “I was also concerned to hear recently that several national pharmacy chains and other major retailers have begun to sell or will soon begin to sell cannabidiol (CBD) products in several states. We’ll be contacting them to remind them of #FDA obligations and our commitment to protect consumers against products that can put them at risk.”[3] In other words, the agency has made statements suggesting that while it has a hierarchy of concern about CBD products, depending on their health claims, it is not endorsing their legality at the moment.

We expect to hear more from the FDA following its recently announced hearing, set to occur on May 31, 2019, to receive public comments on topics related to the agency’s role in the regulation of products containing cannabis and cannabis-derived compounds like CBD. In the meantime, what is the practical take-way? The FDA seems to be moving toward solutions for lawful marketing of hemp-derived CBD products, but the wheels of bureaucracy grind slowly. The first public hearings on this subject are scheduled for next month and the FDA has only as yet promised to come up with guidelines. Those who are looking to market CBD-containing cosmetic or topical products that do not make health claims, appear to be the best positioned to get ahead in the market when the time is right. In the meantime, companies can begin, or continue, developing an intellectual property portfolio around those products. While the regulatory framework around CBD is just getting started, the IP arms race is well under way.

Stay tuned as we look forward to reporting more following the FDA’s May public hearing.

[1] https://www.sternekessler.com/news-insights/publications/whats-answer-does-2018-farm-bill-create-path-federal-trademark
[2] https://www.fda.gov/newsevents/publichealthfocus/ucm421168.htm#cosmetics
[3] https://twitter.com/SGottliebFDA/status/1113130081210302465

This article appeared in the April 2019 issue of MarkIt to Market®. To view our past issues, as well as other firm newsletters, please click here.