Hemp CBD Litigation in 2020: Prop 65 – Lexology


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We hope we turn out to be wrong, but 2020 could be the year of litigation for hemp derived products, especially including FDA regulated CBD products and companies with California customers.

At the end of 2019, FDA issues another 15 public Warning Letters to CBD companies along with a new website statement about the dangers of CBD, which for the first time (along with liver damage and drug interaction) included the risk (without significant claim substantiation by FDA) of “male reproductive toxicity”.

Adding to the FDA assistance to the plaintiffs bar, is the recent December announcement by California’s Office of Environmental Health Hazard Assessment (OEHHA) that THC has been added to the Prop 65 chemical list. THC has been added to the published list of more than 900 chemicals under the California Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) that are known to cause cancer, birth defects and other reproductive harms. A company doing business in California with products that contain THC is now required to warn consumers, with a clear and reasonable statement, that exposure to THC is known to the state of California to cause birth defects or other reproductive harm.

Effective January 3, 2020, the Office of Environmental Health Hazard Assessment is adding cannabis (marijuana) smoke and Δ9-tetrahydrocannabinol (Δ9-THC) to the list of chemicals known to the state to cause reproductive toxicity (developmental endpoint) for purposes of the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65)[1]. At a public meeting on December 11, 2019, the Developmental and Reproductive Toxicant Identification Committee (DARTIC) in its official capacity as the “state’s qualified experts” determined that cannabis (marijuana) smoke and Δ9-tetrahydrocannabinol (Δ9-THC) were shown to cause reproductive toxicity based on the developmental endpoint. Regulations for the listing of chemicals by the DARTIC are set out in Title 27, California Code of Regulations, section 25305(b)(1).

A complete, updated Proposition 65 chemical list is available on the OEHHA website at https://oehha.ca.gov/proposition-65/proposition-65-list.

See https://oehha.ca.gov/proposition-65/crnr/chemicals-listed-effective-january-3-2020-known-state-california-cause

Proposition 65 contains a private right of action under which consumers can bring a cause of action against companies that violate Proposition 65, which gives the consumer the opportunity to collect damages for any such violations. Failure to provide the required warning on products that contain threshold amounts of chemicals listed on the Proposition 65 list could lead to potential litigation from plaintiffs attempting to enforce the law. This litigation can be costly to defend and often results in monetary settlements between the plaintiff and defendant.

In 2019, FDA issued a number of Warning Letters to CBD companies for unsubstantiated “drug claims” ie claims that FDA views as appropriate only for FDA approved pharmaceutical products, ie only for the one CBD containing drug that FDA has approved, Epidiolex. Once FDA determines that CBD has been marketed with drug claims, the FDA Warning Letters throw the book at the offending company, including warning the company that CBD in food or supplements is per se illegal according to FDA’s legal interpretation of the “preclusion provisions” of the respectively the Food Drug and Cosmetics Act and the Dietary Supplement Health and Education Act. According to FDA, it is illegal for CBD to be in food or supplements irrelevant of the “drug claims” because once CBD was approved for Epidiolex it cannot, period, be in food or supplements. (This is FDA’s policy position on the law, which in fact allows FDA to override the preclusion provisions without any amendment to the statutes.) The rationale for the preclusion provisions, according to FDA, is that pharma research would be disincentivized if allowed into general commerce in food and supplements.

FDA’s recent additional 15 public Warning Letters to CBD companies along with a new website statement about the dangers of CBD, including for the first time:

Male Reproductive Toxicity: Studies in laboratory animals showed male reproductive toxicity, including in the male offspring of CBD-treated pregnant females. The changes seen include decrease in testicular size, inhibition of sperm growth and development, and decreased circulating testosterone, among others. Because these findings were only seen in animals, it is not yet clear what these findings mean for human patients and the impact it could have on men (or the male children of pregnant women) who take CBD. For instance, these findings raise the concern that CBD could negatively affect a man’s fertility. Further testing and evaluation are needed to better understand this potential risk.

Predictably, this arguably alarmist FDA website publication resulted in a barrage of class action letters and filings against a broad swath of the CBD industry. And this is arguably FDA’s intended result. As FDA frequently points out, FDA does have resources over the entire FDA regulated industry and enforces based on risk, i.e. high risk is enforcement focus. As part of this approach, FDA relies heavily on the publication of online Warning Letters, guidance and other policy pronouncements picked up by media and acted on by private right of action.

 


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