Selling CBD on Amazon: The 2018 Farm Bill & CBD in Ecommerce
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Here at Kaspien, we receive regular inquiries from existing partners and new brands wanting us to help them launch their CBD products on Amazon. One of the most common questions we get is, if CBD is so widely available why can’t I sell it on Amazon? Isn’t CBD just like hemp oil that been around for a long time?
Unlike hemp oil, CBD is one of 113 identified Cannabinoids in the Cannabis plant that accounts for 40% of the overall plant extract and is normally extracted as an oil from hemp. Additionally, CBD is purported to have many of the same properties of marijuana without the psychoactive effects of THC.
As a result, CBD related products are trending as supplements, food additives, and oils. The trend has even been addressed directly by the head of the FDA and was the subject of a recent FDA Public Panel.
There are many competing messages about the current legality of CBD, the numerous health claims being made, and the marketplace rules surrounding CBD’s sale. This blog post will try to concisely explain the 2018 Farm Bill, the current Federal and state regulatory issues with CBD, and the current marketplace prohibitions on CBD products.
The 2018 Farm Bill
With the passage of the 2018 Farm Bill, the Federal ban on the growing and sale of hemp and hemp-derived products was repealed. While the Federal ban has been removed, the 2018 Farm Bill did not “legalize” the sale of CBD oil as some brands have claimed.
Instead, the 2018 Farm Bill removed CBD’s classification as a Class I Drug (no known benefit) but left the legality of its use to the FDA and the states. Furthermore, Congress strictly defined hemp and hemp-derived products as containing less than 0.3% THC. In practical terms, this means CBD derived from hemp is no longer Classified like marijuana (a Class I drug) and instead became classified as a Class V drug.
Prior to the 2018 Farm Bill, the FDA approved the use of CBD oil as a prescription drug to treat a rare form of Childhood Epilepsy, under the brand name Epidiolex™. However, because CBD has been approved as a drug administrable only with a prescription, all other CBD products that cross state Lines are regulated the same way, as Class V drugs requiring FDA approval before being sold.
The FDA’s Stance
What this means, according to FDA Principle Associate Commissioner Lowell Schiller, is that “it is currently illegal to put into interstate commerce a food to which CBD has been added, or to market CBD as, or in, a dietary supplement.” While the FDA is engaging industry groups and conducting additional safety reviews of CBD, the FDA is enforcing this rule against brands that market CBD products as treatments for diseases.
Most recently, the FDA sent a warning letter to Curaleaf Inc™, giving them 15 days to respond with plan to correct their violations or face additional injunctions and seizures. The main reasons given for the Warning Letter were the advertising claims, including treating Cancer, Alzheimer’s and Pain Relief, using CBD in supplements in violation of FDA rules and creating “Unapproved Animal Drugs” because the products contain CBD.
The FDA is still working through its review of CBD and may issue additional guidelines allowing its use. However, until the FDA rules change, it is currently not legal to enter into interstate commerce any food, dietary supplements, or new drug that contains CBD.
States Still Have Jurisdiction
Although the 2018 Farm Bill allows the FDA to regulate CBD for interstate commerce, it specifically did not pre-empt state law in regulating hemp and CBD.
By not pre-empting state law, states are given free rein to regulate the use of CBD within state boundaries. Even prior to the 2018 Farm Bill, states were regulating CBD with everything from outright prohibitions, like Idaho, South Dakota, and Kansas, to no meaningful restrictions, like Washington State and Oregon, creating a number of issues for brands looking to sell their CBD products.
Like marijuana, CBD regulations vary state by state, and so long as the products are completely manufactured and sold within a specific state, never entering into interstate commerce, and are not prohibited under that state’s laws there may be no issues.
These state-specific rules and boundaries pose significant sourcing, logistical, and growth challenges for brands looking to sell their CBD products. However, given the state specific controls, it is theoretically possible to have no legal issues building a product line that contains CBD. Furthermore, the provision for States’ Rights helps to explain why there hasn’t been a stronger crackdown on CBD products despite the previous Federal ban and current FDA restrictions.
Online Marketplaces Prohibit Selling CBDs
Given the regulations that vary by state and the restrictions on CBD from the FDA, it is no surprise that most marketplaces prohibit the sale of CBD products on their sites.
For Amazon, the largest marketplace in the US, the restriction is directly related to CBD’s current classification as a Class I drug (Amazon still hasn’t updated its policy to reflect the changes of the 2018 Farm Bill). Amazon’s restricted products page states: “Drug listings must not be for controlled substances or products containing controlled substances, such as: Products containing cannabidiol (CBD), a Schedule I Controlled Substance.”
Not only are products containing CBD banned but the use of euphemisms for CBD products like “Rich hemp Oil,” Full Spectrum hemp Oil” etc. are prohibited. Trying to sell a product containing CBD on Amazon is a pretty sure recipe for getting your listing restricted.
Similarly, Walmart, Google Express, and eBay have restricted sellers from selling CBD products. These other marketplaces almost always cite the restriction of sales of prescription drugs in their reasons for not allowing the sale of products that contain CBD. For marketplaces, the very model of facilitating the sale of products across state borders means that all products they sell fall under the jurisdiction of the FDA. While it is not difficult to find listings for the CBD products on marketplaces, it’s only a matter of time until each of those listings is taken down for violating a marketplace policy.
The Future of CBD Sales in Online Marketplaces
Consumer demand for CBD doesn’t show any signs of weakening, and the FDA is continuing its exploration of how best to regulate CBD. The FDA is not known for moving quickly, but we will continue to monitor the regulatory developments and advise if things change.
The FDA is focused on gathering additional data on the safety, possible adverse interactions, and risks of long-term exposure to CBD as it considers issuing new guidance. For now, the Federal and state restrictions have led to prohibitions on the sale of products containing CBD on all the major marketplaces. Listing products containing CBD will get your products and potentially your selling account restricted. That being said, as long as brands are only sourcing and selling within a state, and that state allows the sale of CBD, they may be able to build their brands while awaiting further developments at the Federal level.
While many brands are excited to jump on the demand for CBD products, the ability to grow the brands online is limited by FDA restrictions and prohibitions on all the major marketplaces.