For hours Friday, people waited to address the U.S. Food and Drug Administration about cannabis and cannabidiol, the new and largely unregulated compound that's showing up in everything from cookies to dog treats. Lawyers, manufacturers, lab operators, advocates of those with debilitating diseases—they all had something to say.

The FDA called the public comment session as a precursor to potential regulation of hemp-derived cannabidiol, or CBD, an increasingly popular additive that is projected by New Frontier Data to reach nearly $1.3 billion in U.S. sales by 2022. As the hearing stretched into its ninth hour, a panel of FDA officials had already heard from 100 speakers, including those who want more labeling, testing and dosing requirements and others who want the agency to take a much lighter regulatory touch.

Among those who were expecting to watch Friday's proceedings was Washington-based Sidley Austin partner Coleen Klasmeier, a former attorney in the FDA's Office of the Chief Counsel. Klasmeier shared her thoughts on the highly anticipated hearing and forecast what industry might see next from regulators. The interview has been edited for clarity and length.

The Recorder: The FDA has said they won't be announcing any new policies or taking any positions at this hearing. Why is it a big deal?

Klasmeier: You've touched on something that's underappreciated, that FDA has gone out of its way to deny that anything is going to be announced. It's not like a Supreme Court decision where they're going to read the opinion from the bench.

It's one of the first early baby steps toward setting up policies addressing what is really a sort of unprecedented stress test to the FDA regulatory scheme, which is the sudden availability of a whole new category of ingredients from a previously prohibited botanical source. It's fascinating and it's going to take a long time, and there's a ton of complexity. But we've got miles to go before we sleep.

I think FDA would benefit from some congressional intervention here if the expectation is that this is going to happen quickly.

What can the FDA do?

There are two options for policy makers. One is to recognize that there are some cross-currents here that are quintessentially of the type that Congress should address. Particularly, you would think, oh, we've got economic values at stake. There are farmers who would benefit from taking advantage of this economic activity that's now legal. On the other hand, you've got public health considerations that FDA is very skilled at addressing. But the economic piece is usually reserved for Congress.

So I could see a lot of value in getting Congress back to the table to figure out how to resolve those tensions.

And there are also some technical legal issues that really feel more appropriate for Congress to address. For example, there's an international treaty that talks about psychotropic drugs, including marijuana, and the Farm Bill didn't do anything to that treaty. And it's an independent source of federal law because it's a ratified treaty. So it's as if Congress enacted a statute.

Does Congress have a role in regulating CBD?

There are a lot of good reasons why Congress should re-engage on this. With one scenario or the other, FDA just does all the hard work and heavy lifting on the issues that arise with respect to products that come within its scope of jurisdiction. But that's pretty tough, just because it's inherently challenging, but also, is FDA supposed to talk to [the Drug Enforcement Administration] about unanswered questions arising under the Controlled Substances Act? Is there some sort of [Office of Management and Budget] brokered conversation that might happen to resolve whatever differences of opinion FDA and DEA might have?

FDA could do it [alone]. It's just a big lift, and I think to some degree it's sort of inappropriate and unfair to have all this attention focused on what FDA is doing. The FDA is a pretty functional, high-performing agency, and I think there's a tendency to think the FDA is just going to do everything. We saw the same thing with tobacco, where it was, FDA is on it, they'll handle it. And they have been handling it but it's hard.

How long could a regulatory process take?

It depends on what you think the end output ought to be. If the end output is a pretty narrow regulation that just addresses the race-to-market obstacle … if you think that's really where the action is, then FDA could manage that obstacle with notice of comment rule-making.

But that's very hard to do because Congress and OMB have imposed all of these procedural requirements on any federal agency that wants to do rule-making.

The default position that the Trump administration has articulated in an early executive order is regulation is bad: when agencies regulate, that is a drag on the economy. What I think that policy doesn't appreciate is that sometimes when an agency does rule-making it has a deregulatory impact. It just makes logical sense.

If legislation is enacted that is unclear, or if there is background statutory law that is pro-regulatory or interferes with desirable economic activity then by rule-making an agency can be deregulatory, clarifying or opening up safe harbors for activities. And that's what this is.

 

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