The Regulatory Framework of CBD: Confusing the Public on Both Sides of the Border

The Regulatory Framework of CBD: Confusing the Public on Both Sides of the Border

June 26, 2019 By


Cannabidiol (CBD) is a naturally-occurring phytocannabinoid in the Cannabis sativa L. plant and is responsible for many of the therapeutic properties associated with cannabis. It is important to know that “cannabis” and “hemp” refer to the same plant (Cannabis sativa L.). Where the plant is harvested for seed, grain, and stalk, Industrial Hemp Producers are permitted to cultivate plants with low levels of THC (the cannabinoid that causes the “high” of cannabis). For additional control, Health Canada only permits the propagation of certain strains by hemp farmers, through issuing an annual List of Approved Cultivars. Therefore, licensed hemp producers may only grow from seeds that are purchased through a licensed seed provider, and selected from the annual list of approved strains. Strains that are not on Health Canada’s list, are considered cannabis strains and are illegal to grow for commercial sale without a license under the federal Cannabis Act.

Hemp farmers are free to process the grain, seed, and stalks of these plants, however, the flowering heads of the plant that contain CBD and other phytocannabinoids can only be sold to federal license holders under the Cannabis Act, for further processing and sale to the public. “Derivatives” that are exempt from the Industrial Hemp Regulations and Cannabis Act, includes derivatives processed only from the grain of hemp which contains no CBD and explains why “hemp seed oil” is readily available for purchase on store shelves. Therefore, all activities involving CBD even if extracted from hemp, fall under the control of the Cannabis Act.

Industrial hemp can contain significant levels of CBD, but the moment the flowering heads of the plant are harvested it is considered cannabis. Legally, Industrial Hemp Producers cannot do anything with these flowering heads—they can only press the seeds from the hemp plant for seed oil, or use the stalks for fiber. The flowering heads containing cannabinoids may only be sold to federal license holders under the Cannabis Act. Licensed processors can purchase hemp that is high in CBD and very low in THC and extract these cannabis derivatives from the buds at their licensed processing facilities. Only licensed processors can extract and package for sale, cannabis “extracts” or “derivatives” containing CBD or THC. Simply put, the very definition of cannabis in Schedule 1 of the Cannabis Act, includes its derivatives and phytocannabinoids. CBD (cannabidiol) is a phytocannabinoid.

CBD products, even extracted from hemp and containing no THC, are considered cannabis products that must adhere to the Cannabis Act and Cannabis Regulations in order to be made available for sale to the public. Therefore, all CBD products must bear the standard “cannabis warning symbol” on the label.  Products that you may find on store shelves or online that claim to contain CBD, do not feature the warning symbol and are not sold by an authorized retailer, are not authorized for sale by Health Canada. These products have not passed any regulatory approval and are illegal products.

There is a strong push from the Canadian Hemp Trade Association (CHTA), the Canadian Health Food Association (CHFA) and other interests groups to remove CBD from the Prescription Drug List and enable its availability outside the purview of the Cannabis Act. The proposal is that the existing regulatory framework for all cannabis products is too strict, and does not align with the low-risk profile of cannabidiol (CBD). It has been submitted in a white paper by the CHTA and CHFA, that the current regulatory pathway should be opened up to permit the inclusion of CBD derived from hemp, in Natural Health Products (NHPs). There is strong support for amending the definition of cannabis so that CBD extracted from Industrial Hemp can be included as an ingredient in NHPs going forward, instead of subject to the strict controls of the Cannabis Act. Doing so would mirror the approach taken in the U.S with the passing of the Farm Bill (Agricultural Improvement Act) in December 2018.

As of last week, Health Canada has launched a public consultation period to welcome feedback on the concept of “Cannabis Health Products.” This new category of cannabis products would permit manufacturers to make health claims about their products, supported by clinical research. Consumers would then be able to purchase cannabis products that make therapeutic claims for treating minor ailments. Under the existing framework, it is impossible to legally access cannabis products that make therapeutic claims without a prescription. Cannabis products are currently divided into two product categories: recreational, and medical. Further, medical claims can only be made for cannabis drugs, manufactured under a Cannabis Drug License. On the consumer side, they can only be obtained through prescription and monitored under the supervision of a health care practitioner.

Since Health Canada has opened a public consultation period to collect feedback on Cannabis Health Products, it means they are interested in allowing licensed processors to provide a more diverse product range to consumers. According to the 2018 Deloitte report, the majority of current and potential cannabis consumers reported that they will be using cannabis to help relax, sleep, and relieve stress (65%). Far less of a percentage (45%) plans to use it for a true “recreational” purpose (such as “having fun with friends”/ “to replace alcohol”). The proposed model would reflect Canadians’ true uses of cannabis products, and permit certain cannabis products to make minor therapeutic claims. While this is a step in the right direction, it does not echo the suggestions made by the CHFA and CHTA in the “White Paper” on CBD. The proposed consultation makes no mention of removing CBD from the definition of Cannabis in the Act and does not exempt hemp-derived CBD from the control of the Cannabis Act.  Furthermore, it is proposed that these products could only be sold only to licensed cannabis retailers in each province, and not natural health food stores, pharmacies or grocery stores, as we are now seeing in the U.S. Taking the time to provide your consumer feedback will be a valuable tool for continued change; particularly if you would like to be able to purchase hemp-derived CBD products from grocery stores and other retail outlets in the future. It is recommended that interested parties complete the public consultation survey by September 3, 2019.



The Agriculture Improvement Act of 2018 was passed into law in December 2018 and it effectively legalized Industrial Hemp at the federal level. The legislation changed the definition of hemp so that it is no longer considered “marihuana” in the Agricultural Marketing Act and the Controlled Substances Act. “Hemp” is now defined as “any part of the cannabis sativa plant, and all of its derivatives, cannabinoids, etc. with a THC concentration of LESS than 0.3%.”

While hemp containing CBD and low levels of THC is now federally legal, the FDA has not yet come out with a regulatory framework for licensing CBD products as a dietary supplement available for sale to the public. In the absence of any regulatory framework, the FDA has issued some warning letters to certain parties found to be selling CBD products because they have been issued any formal approval or license for sale by the FDA.

Representatives of the FDA cited a lack of research when it comes to the effects of CBD products as a dietary supplement. They have requested time to address “unanswered questions” about CBD and other hemp derivatives to determine boundaries such as safe dosages and recommended daily intake. The results of more human studies and clinical trials are needed to better inform regulatory oversight. Given that there is still no formal regulatory approval process for dietary supplements containing CBD, it remains illegal to market these products as a dietary supplement at this time.

With that in mind, manufacturers of CBD topical creams and lotions have not experienced the same warnings from the FDA, because they are not marketing their products as dietary supplements or making false health claims. Marketing CBD ointments and creams should be done with caution at this time, to avoid making claims that are not authorized by the FDA. While the risk profile of CBD is extremely low, all products containing CBD will require authorization from the FDA before it is made available for sale to the public. The FDA is clearly willing to pursue a regulatory framework for CBD products, although the timing on that remains uncertain. Until that occurs, companies selling CBD products may be subject to warnings from the FDA, ordering to cease sales until a regulatory approval framework can be established.


Is Hemp-Derived CBD legal?

To add further clarity, “hemp derivatives” extracted from grain only, that do not contain ANY cannabinoids are exempt from controls of the Cannabis Act and Food and Drugs Act in Canada, and the FDA in the U.S. Therefore, “hemp seed” derivatives that do not contain CBD or THC can be sold on store shelves without the need for regulatory oversight or a license, as a food additive or supplement. This explains why “hemp hearts” and “hemp seed oil” are readily available for purchase at health food stores.

To answer the question; “Is CBD legal in the U.S?” the answer is: if extracted from a hemp plant, then yes. However, the regulatory status of CBD remains unclear as we await direction from the FDA. As a result, there is no mechanism that exists yet for approving products containing CBD. Until a regulatory pathway for FDA approval exists, hemp-derived CBD products should not be sold or marketed as dietary supplements. However, the FDA has not expressed a desire to prevent consumer access to CBD products in the meantime.

The goal of issuing warning letters is to prevent companies from making unauthorized claims on the CBD products they sell. As such, any claims involved in the marketing of CBD products should be avoided until a regulatory mechanism is in place to support these claims. Therefore, the enemy is not the FDA or the DEA, but the companies making false claims (ie. CBD can cure cancer, etc.). Where companies promote CBD for disease conditions such as cancer, the FDA views these products as “unapproved drugs” and will issue a warning letter.

Removing hemp from the Controlled Substances Act in the United States, also means that parties will no longer require a permit from the Drug Enforcement Agency (DEA) to export hemp.


For more information about importing or exporting cannabis products including hemp, speak with a regulatory professional about the requirements for obtaining an import permit. dicentra consulting services has an expert team ready to assist with applications for import permits. To speak with a knowledgeable regulatory professional, contact us today.