State health agencies tighten CBD product regulations across Maine, New York, and North Carolina

COWEN COLLABORATIVE INSIGHTS February 25, 2019 Maine 2 Despite being one of 10 states to legalize marijuana for recreational use, health officials in Maine recently ordered businesses in the state to remove CBD-infused edibles from store shelves according to an article in the Portland Press Herald. Similar to California, the Maine Department of Health and Human Services appears to be following the FDA’s lead in determining that CBD is an unapproved food additive. State health inspectors in Maine have reportedly told businesses to remove “all foods, tinctures and capsules’ containing CBD from their shelves; however, business owners can still sell “CBD products that can be smoked, vaped, worn as a patch or applied asa lotion, and all medical marijuana patients can still buy oral CBDs from licensed caregivers or dispensaries.” New York In response to the 2018 Farm Bill, the New York State Department of Agriculture and Markets issued a FAQ dated Dec. 18, 2018 on the manufacture and sale of hemp- derived CBD products. The department indicates that its current guidance is subject to change and that it will likely be issuing additional regulations as the industry evolves. The FAQ suggests that New York will allow the sale of CBD products sold as a topical or dietary supplement (pill or tincture), the latter of which runs counter to FDA’s current position. However, the guidance appears to restrict CBD products for vaping/inhalation. Additionally, New York will require licensure and prior written approval to produce and sell certain food and beverages under the New York State Industrial Hemp Research Pilot Program. Licensees under the program can sell products that are “(1) listed in your Research Plan and (2) produced in a facility meeting dietary-supplement GMP standards and (3) properly labeled and packaged for sale pursuant to FDA regulations for dietary supplements, and (4) in compliance with all provisions of the Research Partner Agreement.” Otherwise, New York will restrict the manufacture and sale of ready-to-eat food and beverage products with added CBD infusions or CBD extracts and lists products such as “CBD chocolate syrup, CBD soda, and CBD-infused frosting drizzled cookies.” In early February, the New York Times reported that the New York Department of Health and Mental Hygiene was beginning to more aggressively enforce this restriction in New York City restaurants and eateries. North Carolina The North Carolina Department of Agriculture and Consumer Services recently announced its intent to issue warning letters to manufacturers and retailers who sell products containing CBD oil in the state. According to a Feb 8 press release, North Carolina will follow current federal laws, meaning that “CBD cannot legally be added to any human food or animal feed that is for sale,” as CBD is the active ingredient in an FDA-approved therapy and cannot be considered a dietary supplement. North Carolina intends to take an “educate before regulate stance with industry,” according to the release. However, the state will “reserve the right to be more assertive” to ensure consumer health and safety, likely meaning product embargoes and seizures. COWEN.COM 7 HOUSE_OVERSIGHT_024893