PHOENIX- Passage of the farm bill at the end of last year provided a feel-good story for the cannabis industry. Initially, it seemed to many that CBD producers were now going to operate with far less fear of interference from federal authorities since the farm bill legalized hemp.
However, celebrating the golden age of CBD sales may have been premature. Chris Martin, Co-owner of Hempful Farms, a Phoenix-based producer of hemp and CBD products, and Paw Puddy, the branch of the company that creates medicinal pet products, received a surprising letter from the U.S. Postal Inspection Service’s Criminal Investigations Services Center. While the letter was not overly specific, it did include chilling language that no one wants to receive from a federal agency.
“The purpose of this letter is to advise you that pursuant to 39 U.S.C. [article] 3001, and U.S. Postal Service regulations, an item placed into the U.S. Postal Service mail stream is currently being withheld from delivery as there are reasonable grounds to believe its contents are nonmailable as prescribed in U.S. Postal Publication Service 52, Hazardous, Restricted, and Perishable mail,” the letter states.
“The biggest thing for us is the message,” Chris Martin told mg. Only weeks after the farm bill was passed, many in the cannabis industry felt that the page had been turned on the legality of hemp-derived CBD products. But authorities could be making it a point to signal otherwise, which Martin is finding out firsthand.
The experience has shown Martin that the battle between activists and federal authorities is far from over. Martin wants voters to be vigilant when considering the legality of cannabis and the ramifications of proposed regulations. “People really have to understand what they’re voting on,” Martin said.
Martin is also worried that there are other forces at play. As its healing potential becomes widely accepted, many pharmaceutical companies may want to enter the CBD market. Small producers like Martin could present a significant obstacle as they offer products at a much lower rate than large pharmaceutical companies. FDA Commissioner Scott Gottlieb did indicate that there could be legal “pathways” created for CBD products but did not elaborate further.
“This seems like a huge corporate takeover,” Martin said.
Dave Rodman, attorney, and founder of the Rodman Law Group LLC, a Colorado-based law firm that specializes in cannabis law and compliance, has been paying close attention to the new farm bill.
“I’ve been worried that we will see an increasingly regulated industry at first because of the legalization in the farm bill,” Rodman said. “CBD is an API (Active Pharmaceutical Ingredient) of Epidiolex an FDA approved drug which is on Schedule V of the CSA.”
While some in the cannabis industry were celebrating the farm bill’s passage, Rodman considered what CBD’s new classification could actually mean in terms of regulation.
“Since the bill removes cannabinoids derived from hemp from the CSA, it is possible that FDA oversight will increase because the Administration will no longer characterize CBD and other extracted cannabinoids as being the DEA’s problem. As such CBD will face the same scrutiny that any food, drug, or cosmetic would when used for those purposes,” Rodman said.
Like Martin, Rodman is also concerned with how big pharma’s role in the CBD market will play out in the future.
“The patent for Epodiolex is going to be a major hurdle. A very large pharmaceutical company has spent many millions of dollars and years getting a drug patent,” Rodman said. “If all of the sudden you can buy it legally for pennies on the dollar compared to what an actual prescription would cost, that is going to be a very big blow to their bottom line.”
It is unclear if the letter Martin received is an isolated incident or the sign of an upcoming trend and a possible crackdown on CBD producers. We will be following new developments on this and related stories.