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Direct and Ancillary CBD Liability Under the FD&C Act

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Not much thought is given to ancillary CBD liability. Why is that? Probably because the Food and Drug Administration (“FDA”) hasn’t taken any serious enforcement action against any company or individual that aids and abets violations of the Food, Drug & Cosmetic Act (the “Act”) when it comes to CBD. Still, secondary CBD liability under the Act isn’t pretty. And if you’re a company or individual that’s helping other companies or individuals make, sell, or distribute CBD products that violate the Act, you’re actually as guilty as they are under federal law.

FDA and CBD

For a while, CBD stakeholders truly believed that the FDA was prepared to regulate the robust CBD market in the U.S. That, however, will not come to pass where as of January 26, 2023, the FDA concluded that it will NOT regulate CBD foods or dietary supplements. The FDA is punting that task to Congress, which essentially means CBD laws and regulations will either never happen or they’re a far, far way off.

What all of that means is that the status quo remains intact: hemp-derived CBD is not an illegal controlled substance under U.S. law, but it also isn’t a supplement and it cannot be an ingredient in food and beverages for humans or pets without violating the Act. And marketing any bodily or curative effects of CBD was (and still is) off limits.

CBD liability for CBD retailers to date has taken the shape of enforcement letters from the FDA. See here for the most recent examples. Those letters get a massive shoulder shrug from the CBD industry on the whole. Especially since a multitude of states actually allow CBD to be added to food and beverages in conflict with the Act.

FDA and the enforcement spectrum

Many in the CBD industry may not be aware of the risk spectrum when it comes to CBD liability with the FDA. Per the FDA’s own guidance, this is how it tees up enforcement, generally:

  1. Warning Letters. These are sent to the individuals or firms, advising them of specific noted violations. These letters request a written response as to the steps which will be taken to correct the violation. These letters constitute one form of warning that can be issued under current Agency policy.
  2. Seizure of CBD products. An action brought against an FDA-regulated product because it is adulterated and/or misbranded within the meaning of the Act. The purpose of such an action is to remove specific violative goods from commerce.
  3. Injunction from CBD product sales. An order by a court that requires an individual or corporation to do or refrain from doing a specific act. FDA may seek injunctions against individuals and/or corporations to prevent them from violating or causing violations of the Act.
  4. Criminal prosecution of CBD seller. Criminal prosecution may be recommended in appropriate cases for violation of Section 301 of the Act (this specifically goes to selling or delivering into interstate commerce  any food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded, among other things). Misdemeanor convictions, which do not require proof of intent to violate the Act, can result in fines and/or imprisonment up to one year. Felony convictions, which apply in the case of a second violation or intent to defraud or mislead, can result in fines and/or imprisonment up to three years.

Then there are the criminal fines under the Act. Misdemeanor fines under the Act may reach $500,000 under some circumstances. The Criminal Fine Enforcement Act of 1984 (Public Law 98-596) provides for fines for violations of federal law. Although it is not part of the Act, the Criminal Fine Enforcement Act of 1994 applies to all fines levied under the Act, as well as other statutes that contain provisions enforced by FDA.

The following fines are applicable for each offense:

  • Up to $100,000 for a misdemeanor by an individual that does not result in death.
  • Up to $200,000 for a misdemeanor by a corporation that does not result in death.
  • Up to $250,000 for a misdemeanor by an individual that results in death, or a felony.
  • Up to $500,000 for a misdemeanor by a corporation that results in death, or a felony.

The maximum imprisonment for a misdemeanor under the Act remains a year for each offense.

FDA, CBD enforcement, and criminal CBD liability

In its warning letters to a variety of CBD companies, you’ll find the following directive from the FDA:

“Based on our review, these products are unapproved new drugs sold in violation of section 505(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. § 355(a). Furthermore, these products are misbranded drugs under section 502 of the FD&C Act, 21 U.S.C. § 352. The introduction or delivery for introduction of these products into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d).”

The typical translation is that because the CBD company is either marketing and/or selling its CBD products as supplements or “drugs” (due to medical, curative, bodily, disease or health claims about the products), it’s violating the Act and must cease the illegal conduct stat. In its letters, the FDA concludes that “failure to adequately correct any violations may result in legal action, including, without limitation, seizure and injunction.” The agency doesn’t mention any criminal liability and it is indeed rare, but it’s possible in certain cases; and criminal conduct under the Act carries a strict liability standard.

There’s a good reason why criminal prosecution under the Act is a bit of a novelty– affirmative defenses. Namely, if corporate officers of an offending company can show that they “exercised extraordinary care”, but weren’t otherwise able to prevent violations of the Act, the burden shifts to the Feds to prove beyond a reasonable doubt that the officer wasn’t in fact helpless to stop or remediate violations of the Act. And persons who in “good faith” merely receive and later deliver an illegal product cannot be subjected to criminal penalties under the Act. Finally, anyone who receives an illegal product in “good faith” and obtained a “written guaranty” that the product doesn’t violate the Act likewise cannot be prosecuted.

Ancillary CBD liability

There are many ancillary service providers propping up the CBD industry– distributors, financial institutions, payment processors, landlords, advertisers, etc. Under the Act, and per the FDA’s own interpretation:

“nearly everyone involved . . . in interstate commerce, such as manufacturers, packers, distributors, and retailers, is responsible for assuring that he or she is not dealing in products that are adulterated or misbranded, even if someone else caused the adulteration or misbranding in the first place. If you introduce it into interstate commerce or receive it in interstate commerce, you are responsible. The law applies to components and packaging as well as to finished products.”

In the case of United States v. Dotterweich, the U.S. Supreme Court found that:

a corporation may commit an offense and all persons who aid and abet its commission are equally guilty. Whether an accused shares responsibility in the business process resulting in unlawful distribution depends on the evidence produced at the trial and its submission–assuming the evidence warrants it–to the jury under appropriate guidance. The offense is committed, unless the enterprise which they are serving enjoys the immunity of a guaranty, by all who do have such a responsible share in the furtherance of the transaction which the statute outlaws, namely, to put into the stream of interstate commerce adulterated or misbranded drugs [emphasis added]. . . Balancing relative hardships, Congress has preferred to place it upon those who have at least the opportunity of informing themselves of the existence of conditions imposed for the protection of consumers before sharing in illicit commerce, rather than to throw the hazard on the innocent public who are wholly helpless.

Dotterweich addressed the criminal prosecution of  Joseph H. Dotterweich, the president and general manager of The Buffalo Pharmacal Company, Inc., for the company’s violations of the Act by distributing and selling misbranded drugs. And what the case means, in part, is that any person (including a company as is included in the definition of “person” under the Act) can be criminally prosecuted for aiding and abetting violations of the Act namely depending on their “responsible share in furtherance of the transaction” that breaks the law, which will be revealed by evidence produced at trial for a jury to weigh.

Obviously, corporate officers of companies directly violating the Act have personal liability under the Act (including criminal) and the government can pierce the veil accordingly. This is well-established by case law. Does that liability and responsibility realistically extend to CBD ancillary companies that aid and abet violations of the Act? I think it could. In my opinion, it depends on how instrumental they are in getting these illegal CBD products into the hands of consumers (and maybe that’s why Google, for example, is now utilizing an extremely tight CBD advertising policy).

Considering ancillary CBD liability

No matter where you’re at in the chain of CBD manufacture, distribution, or sale, to mitigate your CBD liability, you need to make sure you’re only working with lawful actors (which, in reality, is a super small pool given the FDA’s position on CBD). And it won’t be a defense that state law otherwise allows all kinds of CBD products either, so you need to understand and know what a legal actor even is at this point, given the terrible state of the law. While CBD is obviously a massive growth area no matter what the FDA does or says, the FDA still has teeth to enforce Given the current political climate, everyone needs to be on their toes.



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Almost 20% of Americans Now Use Cannabis Regularly and Pain Management is the #1 Reason They Use It

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1 in 6 americans use weed now

The number of people using medical cannabis to address health issues is increasing. A recent study has shed more light on this growing trend.

 

Research conducted by experts at the University of California Los Angeles indicates that one in six primary care patients (17%) surveyed reported using cannabis primarily for medical reasons, even though they described it as recreational use. The study also found that a third of participants (34.7%) showed signs of moderate to high risk for cannabis use disorder.

 

This cross-sectional study, involving 175,734 patients and published last week in JAMA Network Open, asked, “What is the prevalence of past 3-month cannabis use, and what are the reasons for use among patients in a large health system?”

 

Interestingly, the number of people who consider themselves medical cannabis users is low.

 

“While most patients (76.1%) reported using cannabis to manage a health symptom, very few patients identified as medical cannabis users,” the researchers noted.

 

They emphasized that “given the high rates of cannabis use, especially for symptom management, and the high levels of disordered use, it is essential that health care systems implement routine screening of primary care patients.”

 

Fruit-Flavored Weed Strains Lead the Demand

 

Meanwhile, a separate survey conducted by the cannabis company NuggMD has revealed that fruit-flavored weed strains are in the highest demand. This survey found that one in four marijuana consumers use cannabis primarily to treat pain, with a significant preference for strains with fruity flavors. Slightly fewer respondents reported using cannabis to alleviate anxiety symptoms (23%), followed by those using it for stress relief (18%).

 

The poll, conducted in May, included feedback from 6,500 cannabis users who answered a series of questions about their habits and preferences regarding cannabis use.

 

A substantial portion of respondents (48%) indicated they use cannabis “anytime,” while a notable segment (29%) preferred to use it in the evening.

 

As cannabis continues to become more mainstream, the latest regulatory changes around the plant are not surprising. Additionally, the potential rescheduling of marijuana could further advance research into its uses and benefits.

 

Rising Need for Routine Screening in Healthcare Systems

 

The report emphasizes how important it is for healthcare institutions to regularly screen for cannabis usage. Healthcare professionals need to be aware of their patients’ cannabis usage to provide complete treatment, as a sizable number of patients use cannabis to manage health issues. Numerous patients reported taking cannabis for stress relief, anxiety reduction, and pain management—often without thinking about it as a medicinal application. The difference between the perception of cannabis usage for recreational purposes and its real medicinal use highlights the need for healthcare providers to inquire about cannabis use when seeing patients aggressively.

 

Routine screening can assist in identifying people who are at risk of developing cannabis use disorder. With more than a third of the study’s participants exhibiting indicators of moderate to high risk for this condition, healthcare systems must conduct regular examinations. These screens can help with early detection and intervention, preventing usage from escalating into a condition. Furthermore, knowing patients’ cannabis usage patterns might help healthcare practitioners create more effective, tailored treatment programs that take into account all elements of a patient’s lifestyle and drug use.

 

Improved communication between patients and providers can also be facilitated by including cannabis usage testing in basic care. Because of the stigma or concern about being judged, many patients might not willingly admit that they use cannabis. Healthcare practitioners may establish a more transparent and trustworthy atmosphere by including these conversations in standard examinations. This method improves the care of each patient individually while simultaneously advancing our knowledge of cannabis usage patterns and how they affect the health of a larger group of patients.

 

Furthermore, routine screening data may be used by healthcare systems to guide public health policies and activities. Healthcare professionals may make significant contributions to the continuing study and discussion around cannabis use and regulation by methodically gathering data on patients’ reasons for and methods of cannabis usage. These understandings can help legislators craft laws that encourage responsible and safe cannabis use, improving public health outcomes in the process.

 

Evening Use Dominates Among Cannabis Consumers

 

One important result from the NuggMD poll is that users prefer to use cannabis in the evening, with roughly 29% of respondents saying they use it mostly at night. This trend demonstrates how people are incorporating cannabis into their everyday lives, frequently as a way to decompress and rest after a long day. When cannabis is used in the evening, users may still benefit from its medicinal properties—such as pain and stress relief—without getting in the way of their day obligations.

 

This pattern of nighttime usage corresponds to the top three reasons many people use cannabis: pain treatment, anxiety relief, and stress reduction. For people suffering from chronic pain or anxiety, the evening may be tough as the day’s activities come to a close and the mind becomes preoccupied with agony or worry. Using cannabis in the evening alleviates these sensations while also encouraging greater sleep and general relaxation. The predilection for fruity-flavored strains, which are generally recognized for their soothing qualities, contributes to the nighttime usage trend by allowing users to acquire a sense of calmness.

 

The shift in cannabis usage into the evenings is also indicative of larger cultural shifts in cannabis acceptability and perception. Cannabis usage is becoming more widely acknowledged as a regular way to unwind after work or other everyday activities as it becomes more widely available and socially accepted. This transformation is brought about by changes in the law that facilitate easier access to cannabis as well as the expanding body of research that supports the plant’s medicinal properties. As a result, cannabis usage in the evenings may increase and become more ingrained in many people’s daily lives.

 

Bottom Line

 

The landscape of cannabis use in America is rapidly evolving, with one in six Americans turning to marijuana, predominantly fruity-flavored strains, for pain relief and other health concerns. This trend underscores a significant shift towards cannabis as a medical option, despite many users initially categorizing it as recreational. The findings highlight a crucial need for healthcare systems to implement routine screening for cannabis use, given its prevalence and potential risks of use disorder. Moreover, as regulatory frameworks continue to adapt, including potential rescheduling, there is a growing opportunity to advance research and public health initiatives surrounding cannabis. Understanding and addressing these dynamics will be essential for optimizing patient care, promoting responsible use, and shaping future policies effectively.

 

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Weed Smokers Needed – Get Paid to Smoke a Joint and Talk about How It Makes You Feel, Would You Join This New Medical Study?

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smoke a joint for money

The cannabis industry has witnessed unprecedented growth in recent years, with increasing legalization and a burgeoning market for products. Amidst this expansion, a unique opportunity has emerged for individuals to contribute to the scientific understanding of cannabis while earning compensation. A company is willing to pay participants to consume marijuana joints and participate in research studies, sparking curiosity and interest. In this article, we’ll delve into the world of cannabis research, exploring the reasons behind this initiative, the potential benefits, and the intricacies of such studies.

The Purpose of Cannabis Research

Cannabis, a plant with a rich history, has been shrouded in mystery and controversy. As societal attitudes and laws evolve, the need for comprehensive research intensifies. Scientists aim to unravel the complexities of cannabis, investigating its effects on human physiology, psychology, and behavior. This knowledge will inform product development, potential therapeutic applications, and responsible use guidelines.

 

Objectives of the Study

The primary objectives of the study encompass a broad range of scientific and consumer-focused goals. By paying individuals to consume pre-rolled cannabis joints, the company aims to achieve the following:

  • Understanding Cannabis Effects: To gain a deeper understanding of the physiological and psychological effects of cannabis consumption, including both immediate and long-term impacts.

  • Consumer Preferences: To identify consumer preferences regarding different strains, potency levels, and consumption methods, which can inform product development and marketing strategies.

  • Safety and Efficacy: To assess the safety and efficacy of various cannabis products, providing valuable insights for regulatory bodies and healthcare providers.

  • Public Health Insights:To contribute to the broader body of knowledge regarding cannabis use and its implications for public health.

The Role of Cannabis in Scientific Research

Cannabis has been a subject of scientific interest for decades, with research focusing on its medicinal properties, potential health benefits, and risks. The legalization and decriminalization of cannabis in various regions have paved the way for more comprehensive studies, yet challenges remain due to regulatory constraints and the stigma associated with cannabis use.

  1. Medicinal Properties: Research has shown that cannabis can be effective in managing conditions such as chronic pain, epilepsy, and multiple sclerosis. This study aims to further explore these medicinal benefits.

  2. Recreational Use: Understanding the patterns and effects of recreational cannabis use can inform public health initiatives and harm reduction strategies.

  3. Policy Development: Data collected from such studies can support evidence-based policy development, helping to create regulations that balance public safety with individual freedoms.

 

Eligibility and Participation

Individuals interested in participating must meet specific criteria, including:

  • Age: 21+ years old

  • Health status: Generally healthy, with no severe medical conditions

  • Cannabis experience: Active users or willing to try cannabis

 Benefits for Participants

Participants will undergo thorough screenings, including medical evaluations and psychological assessments. Those selected will receive compensation for their involvement, which may include:

  • Financial Compensation: Participants are paid for their time and involvement, providing an additional incentive to take part in the study.

  • Personal Insights:By participating, individuals can gain a better understanding of how different cannabis products affect them personally.

  • Contributing to Science: Participants play a crucial role in advancing scientific knowledge and informing future cannabis-related policies and products.

  1. Safe Environment: The controlled setting ensures that participants can consume cannabis safely, with medical supervision and support available if needed.

Ethical Consideration

Conducting research involving cannabis consumption requires careful consideration of ethical issues to protect participants and ensure the integrity of the study

  1. Informed Consent: Ensuring that participants are fully informed about the study’s objectives, procedures, and potential risks is paramount.

  2. Confidentiality: Protecting the privacy and confidentiality of participants’ data is a key ethical concern.

  3. Risk Management: Implementing measures to mitigate any potential risks associated with cannabis consumption, including providing medical support if necessary.

  4. Regulatory Compliance: Adhering to all relevant regulations and guidelines to ensure the study is conducted ethically and legally.

Potential Challenges and Limitations

Despite the promising aspects of this initiative, several challenges and limitations must be acknowledged and addressed. This challenges include:

  • Regulatory Hurdles: Navigating the complex and often restrictive regulatory landscape surrounding cannabis research can be challenging.

  • Participant Variability: Differences in individual responses to cannabis can make it difficult to draw generalized conclusions from the data.

  • Stigma and Perception: The stigma associated with cannabis use may deter some individuals from participating in the study.

  • Data Interpretation: Ensuring the accurate interpretation of data, especially when dealing with subjective experiences and self-reported outcomes.

Implications for the Cannabis Industry

The findings from this study could have significant implications for  the cannabis industry, influencing product development, marketing strategies, and regulatory frameworks.

  1. Product Development: Insights into consumer preferences and effects can guide the development of new cannabis products that meet market demands and safety standards.

  2. Marketing Strategies: Understanding how different demographics respond to cannabis can inform targeted marketing efforts and improve consumer engagement.

  3. Regulatory Frameworks: The data collected can support the creation of evidence-based regulations that promote safe and responsible cannabis use.

  4. Industry Standards: Establishing industry-wide standards for product safety, quality, and efficacy based on scientific evidence.

Future Directions and Research Opportunities

This initiative represents a significant step forward in cannabis research, but it also highlights the need for continued exploration and study.

  1. Longitudinal Studies: Future research should include long-term studies to assess the chronic effects of regular cannabis use.

  2. Diverse Populations: Including a diverse range of participants can help ensure that findings are applicable to a broader population.

  3. Cross-Disciplinary Research: Collaborating with experts from various fields, such as pharmacology, psychology, and public health, can provide a more comprehensive understanding of cannabis use.

  4. Technological Integration: Utilizing advanced technologies, such as biometric monitoring and data analytics, can enhance the accuracy and depth of research findings.

Conclusion

The initiative to pay individuals for consuming pre-rolled cannabis joints as part of scientific research marks a novel and important development in the study of cannabis. By offering financial compensation and conducting the study in a controlled environment, the company aims to gather valuable data on the effects, safety, and consumer preferences related to cannabis use. This research has the potential to significantly impact public health, policy, and industry practices, contributing to a more informed and balanced understanding of cannabis. As the landscape of cannabis research continues to evolve, such initiatives underscore the importance of scientific inquiry in shaping the future of this dynamic and growing industry.

 

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What Hunter Biden’s Verdict Means for Cannabis Users

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I wrote about Robert Hunter Biden’s indictment for violation of federal gun laws in a post entitled “What the Hunter Biden Indictment Means for Cannabis Users” back in September 2023. On June 11, 2024, a jury in a federal district court in Delaware found Hunter guilty of three felony counts. Today I want to look at how this could affect cannabis users.

Cannabis legalization and gun control laws

Below is a list of prior posts from our blog on the intersection between cannabis legalization and federal gun control laws, which give a lot of background to what this post discusses:

Without rehashing these prior posts, the main issue is that federal law prohibits ownership or possession of guns by persons who are addicted to or unlawfully use controlled substances. This includes cannabis, even in states where it is legal, and even if it is for purely medical purposes. In fact, the ATF’s required form to purchase a firearm states this clearly.

In 2022, the US Supreme Court rendered a decision in New York State Rifle & Pistol Association, Inc. v. Bruen, which changed the tests courts use to determine whether laws infringe the Second Amendment.

Following Bruen, numerous federal court challenges have been lodged against the federal prohibition on gun possession or ownership by cannabis users. Many of these cannabis-related challenges have been successful. In fact, federal courts have already found different federal firearm restrictions unconstitutional, and the US Supreme Court is expected to rule on a similar challenge (not cannabis-related) this month.

In other words, it’s likely that in the next few years the US Supreme Court will consider an appeal regarding cannabis users’ gun rights. Based on my review of the current landscape of decisions, I believe the US Supreme Court would hold that cannabis users still have Second Amendment rights, but it would qualify that decision by allowing restrictions on possession by persons under the influence of cannabis.

The Hunter Biden matter

Now, how does this relate to Hunter Biden? Hunter’s case involved allegations that he was addicted to crack cocaine (not cannabis) when he purchased a firearm. Two of the charges related to false statements on governmental forms, and one related to possession of a gun in violation of federal law. As mentioned, the jury found him guilty on all three charges.

Once the Delaware court sentences Hunter, he is likely to challenge the above-mentioned federal laws on the grounds that they are unconstitutional under Bruen. While crack is obviously much different from cannabis, federal gun control laws treat all controlled substances the same. In other words, the law that Hunter was found guilty of violating would also apply to similarly situated cannabis users. Likewise, if the law is held to be unconstitutional with respect to drug users, it would likely apply equally to Hunter and cannabis users.

All that said, the difficulty for Hunter will be in the fact that he was charged for lying on a federal form. Even if the prohibition on gun ownership by drug users were held unconstitutional, there is still the problem that what he wrote on a federal form was not accurate. This is also an issue that some of the cannabis challengers could face as well.

What’s next for cannabis users and gun control laws

Ultimately, these federal challenges have a long way to go, and there is always the possibility that he is pardoned before an appeal is exhausted. That said, it’ll be interesting to watch folks from very different political persuasions linking up to challenge federal gun laws. As always, we’ll keep posting with more updates, so stay tuned to the blog.



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