Hemp extract is an oil derived from the stalks and seeds of the industrial hemp plant. This oil can be used for a variety of purposes, the most popular being consumed as a wellness supplement for the cannabinoids, vitamins, phytocannabinoids, and Cannabidiol (CBD). Hemp is legal in New York and on the federal level. CBD (Cannabidiol) is one of the more than 100 chemicals in hemp but is not “generally recognized as safe” as a food additive or ingredient by the Food and Drug Administration, according to the New York Department of Agriculture and Markets. It does, however, recognize three hemp ingredients as safe: dehulled hemp seed, hemp seed oil and hemp seed protein powder. There is no issue using these 3 processed components in food and beverage products as long as they are labelled as dietary supplements.

CBD isolate is pure CBD oil with the other components of the hemp plant removed. Why is this important to know? Because the best legal strategy for manufacturing and selling legal hemp health and wellness products depends on this distinction. Industrial Hemp has been legalized for cultivating in the USA according to the Farm Bill Act and is where most Hemp Oil and CBD Oil products come from. However, CBD itself is currently a Schedule I drug – a drug with no accepted medical use and a high potential for abuse.

Hemp Oil (Hemp Seed Oil) is most commonly sourced from Industrial Hemp plant seed and is regulated in its production and is tested to confirm the absence of THC and CBD. It has nutritional value due to high levels of phytonutrients including omegas, vitamins and minerals (but not CBD). Hemp Extract (CBD Oil) an extract sourced from Industrial Hemp with naturally occurring terpenes, flavonoids, cannabinoids, and other beneficial phytonutrients from the hemp plant. The synergy of these compounds has a different effect than just CBD isolated out from the other components.

A current legal strategy is to focus marketing and product labeling on the presence of the entire plant extract that can contain more than 80 different phytocannabinoids rather than call attention to the presence of CBD (even though it is inherently present). In doing so, it distinguishes these hemp extract and hemp oil products from the FDA regulated compound CBD that has beeb approved to medically treat certain forms of epilepsy in a drug with the trade name Epidiolex. This distinction would make the Hemp Oil not subject to the clause in federal law that excludes drugs from being sold in supplements. This strategy is based on what has worked with red rice yeast, another natural product that faced a similar situation when one of its chemical components was used in an FDA regulated medication.

Product packaging should focus on the presence of phytocannabinoids rather than CBD. The manufacturing process should involve testing the product to show it is full spectrum and record the presence of all of these cannabinoid components throughout the process. They should be in the same ratios as they would be fund in nature in the hemp. Testing and record keeping should also validate the absence of manipulation to enhance CBD levels. Product packaging should position these products as dietary supplements from hemp extract and not as CBD supplements.

The take-away here is that manufacturers should do a few things to minimize the legal risks associated with producing products:

• Use hemp oil or hemp extract, but not CBD isolate
• Be sure your product packaging meets FDA standards for dietary supplements and does not make any heath claims
• Include measurements of cannabinoids contained in the product
• Don’t include the amount of CBD contained in the product
• Be sure there are records of the processed hemp that measures and validates the cannabinoids

These strategies are general best practices to minimize risks, but are not to be considered legal advice. There are some clear illegalities involved in this industry and each situation must be analyzed separately. For businesses considering taking the risk until marijuana is legalized and CBD is declared safe for human consumption by the FDA, they should consider consulting an attorney so they can minimize the risks and be prepared for an investigation or audit. The legal landscape can change at any time and strategies must adapt.