By Nathalie Bougenies, Attorney at Harris Bricken
Last week, the U.S. Alcohol and Tobacco and Trade Bureau (“TTB”), which regulates the alcohol industry, released new information regarding the use of hemp-derived ingredients in the formulation of alcoholic beverages. The industry circular came as a response to numerous inquiries from the alcohol industry about whether alcoholic beverages containing cannabidiol (“CBD”) derived from hemp (“Hemp-CBD”)—which was legalized under the 2018 Farm Bill—may be produced.
The overall message of the circular confirms the conclusion we reached a few months ago, that the TTB will not currently approve the use of Hemp-CBD in the formulation of wine, beer and liquor.
Although the TTB oversees the formulation of alcoholic drinks, the agency works closely with the Food and Drug Administration (“FDA”) in determining whether the ingredients added to those beverages are safe for consumption and whether their use is lawful under the Food, Drug & Cosmetic Act (“FDCA”). Indeed, the FDA is tasked with protecting public health by ensuring that foods and drinks introduced into interstate commerce are safe.
As we previously discussed, any substance that is intentionally added to food (including drinks) is subject to FDA premarket review and approval, unless the substance is generally recognized as safe (“GRAS”). Because the FDA has yet to approve CBD (including Hemp-CBD) as a food additive, CBD-infused drinks are deemed unsafe under the FDA. Moreover, the FDA deems the use of hemp-CBD-infused foods and drinks as unlawful because CBD has been approved in the treatment of epilepsy (Epidiolex); and therefore, cannot be concurrently marketed as a food. Consequently, the FDA treats Hemp-CBD infused alcoholic beverages as unsafe and unlawful under the FDCA.
Given its deference to FDA guidelines, the TTB has determined that, at this time, it will not approve formulas of alcoholic beverages infused with Hemp-CBD. In addition, the agency has decided that it will return for correction any applications for formulas containing “hemp” ingredients.
However, the TTB will continue to accept and review applications for alcoholic beverages derived from parts of the hemp plant that do not contain CBD, such as hulled hemp seeds and hemp seed oil—both of which have been deemed GRAS. Such formulas will be approved if the applicants successfully demonstrate, through laboratory analyses of hemp ingredients, that the ingredients are not controlled substances.
In the circular, the TTB left open the possibility that formulas containing hemp-derived CBD could be approved down the line if the FDA determines that Hemp-CBD could be lawfully marketed in food products. Nevertheless, alcohol companies would still have to submit formula applications to the TTB before selling the products.
The agency further declared that it will closely monitor FDA actions and guidance on CBD as it continues to review its existing policies. This statement most certainly refers to what will come out of the public hearing the FDA will be holding on May 31, during which stakeholders will share their thoughts on potential pathways by which CBD products may be legally sold and marketed.
So for now, members of the alcohol industry who want to lawfully enter the booming CBD market will need to stick to hemp seed ingredients which, as we just explained, are the safest path through this booming market. For more information on this issue, feel free to reach out to our team of cannabis and CBD attorneys.