Senate bill proposes regulatory overhaul of cannabis—and a new FDA Center

By ALEXANDER GAFFNEY, MS, RAC | Jul. 25, 2022

A bill formally introduced last week in the Senate would, if passed, transform the regulation of cannabis products in the U.S., de-scheduling and decriminalizing cannabis and establishing a new regulatory division at the FDA solely focused on cannabis and cannabidiol.

The Cannabis Administration and Opportunity Act.

  • Sponsored by Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chair Ron Wyden (D-OR) and Senator Corey Booker (D-NJ), the bill was introduced in the Senate on July 21, 2022. A draft version of the same bill was released in July 2021.
  • At a high level it would remove federal prohibitions on the use and sale of cannabis. The legislation would instead leave it up to individual states to decide how cannabis is to be regulated or criminalized.
  • Practically, marijuana and its derivatives (including tetrahydrocannabinol, or THC) would be removed from Schedule I of the Controlled Substances Act within 180 days of the law’s enactment. Not only would the substances be removed from Schedule I, they would not be considered to meet the requirements of “any schedule,” including Schedule II-V, which generally place other restrictions on the dispensing, use or possession of a substance. Other synthetic cannabis agents (such as cannabimetic agents) would undergo a “rescheduling review,” but would not automatically be changed (Section 101).
  • The FDA would also receive a significant change in responsibilities. Currently, the Drug Enforcement Administration oversees cannabis-related enforcement. Under the Cannabis Administration and Opportunity Act, the FDA would instead have responsibility over cannabis enforcement (Section 102). FDA would then need to coordinate with the Department of the Treasury to “enter into memorandum of understanding regarding coordination of their respective responsibilities with regard to regulation of cannabis and cannabis products.”
  • The FDA would also be tasked with setting up a ‘track and trace’ capability over cannabis products (Page 32). The term “track and trace” should be similar to persons in the pharmaceutical industry, as a similar system was created under the Drug Quality and Security Act of 2013. The basic idea is that products are given a serial number which is tracked and recorded at each successive point in the supply chain. This allows products to then be “traced” back to the point of origin in the event of a problem (such as a recall, discovery of counterfeit product, etc).
  • The track-and-trace system would be relatively similar to the Drug Supply Chain Security Act provisions of the DQSA and apply to all entities that manufacture, process, transport, distribute, receive, package, hold, export or import cannabis products. The FDA would be able to inspect certain records “to monitor the movement of cannabis products from the point of production through distribution to retail outlets,” and could assign codes on the labels of cannabis products to help tracking. However, the bill is otherwise light on details, including when such a system would need to be in place or dates of implementation – all key challenges currently affecting the life sciences supply chain.

But the biggest FDA-related component of the legislation is Title V, which envisions an entirely new approach to the regulation of cannabis products.

  • The legislation calls for the FDA to take the lead on the regulation of many cannabis products through the creation of a Center for Cannabis Products (CCP) within the agency that would be equivalent to other major product centers, such as CDER, CDRH, CBER, CVM, CFSAN and CTP.
  • The Center would have a lengthy list of responsibilities, including the creation of a regulatory framework for cannabis products. For example, the center would need to help create standards for Good Manufacturing Practices (GMPs), labeling standards, coordinate annual registration of companies, adopt standards for product identity, and coordinate recalls, amongst other activities.
  • Adulteration standards: The law calls for the establishment of standards of adulteration similar to those currently used by CDER for drug products, but with an emphasis on the botanical nature of cannabis. For example, products would be deemed adulterated if they were filthy, putrid, decomposed, contained contaminants or poisons, or contains unapproved food ingredients like color additives. A product would also be considered adulterated if it failed to meet established GMPs.
  • Misbranding: The bill would require cannabis products to be labeled with a prominent statement that the product contains cannabis, as well as the name of the manufacturer (or packer or distributor), an accurate statement regarding the product’s quantity or weight, a statement of the product’s form (e.g., solid or liquid), the amount of THC in the product, adequate directions for use, adequate contraindications for use by children (“if deemed necessary for the protection of the public health in regulations promulgated”), and any “other information as may be necessary.” Similar to dietary supplement products, cannabis products would also need to bear a statement that any claims have not been evaluated by the FDA, and the product is not intended to diagnose, treat, cure or prevent any disease. Further, cannabis products would be considered misbranded unless it meets the applicable FDA standards, or if the product was manufactured by an unregistered establishment.
  • Annual registration: Like the current processes for pharmaceutical and medical device establishments, cannabis companies (i.e., all persons owning or operating an establishment that manufacturers, prepares, compounds or prepares a cannabis product) must register with the FDA on an annual basis. They would also be required to register all products being marketed with the FDA. In addition, the FDA would be permitted to create a “uniform system for the identification of cannabis product and may require that persons who are required to list such products” list them “in accordance with such system.”
  • Promotion and distribution: The FDA would be charged with finalizing a regulation to control the promotion, sale and distribution of cannabis products within 2 years, which would only apply to products that are not sold face-to-face (such as at a dispensary). It would also be required to propose a regulation restricting the promotion of cannabis products to those under the age of 21.
  • Manufacturing: FDA would be charged with setting standards for current good manufacturing practices. These would include requirements that are currently relevant to botanical substances, such as testing for pesticide and chemical residues used in the growing of cannabis. cGMPs would apply to preparing, processing, packing and holding of a cannabis product of a cannabis product. Interestingly, this section formerly included a provision applying GMPs to planting, cultivation, growing, and harvesting. It was removed, however.
  • CBD regulation: Under the legislation, CBD derived from hemp would be regulated as a dietary supplement (and not a new dietary ingredient). The FDA would be in charge of setting an upper limit (“recommended daily serving”) for CBD products, and the supplement would not be able to contain more than that amount of CBD. The FDA also could establish unique packaging and labeling requirements. The bill also includes a requirement that the FDA establish standards evaluating the safety of CBD as a food additive.
  • Standards: The FDA “shall, by regulation, adopt cannabis product standards that are appropriate for protection of the public health.” According to the bill text, such standards include those related to the “different types of cannabinoids and the interaction between the constituents of the product,” the various “components, ingredients, additives, constituents” (including smoke constituents) of cannabis, the control or elimination of certain “harmful” components, and product testing and conformity. The bill also contains a provision requiring that any “foreign-grown” cannabis meet U.S. standards.
  • Product requirements: The legislation is seemingly intent on avoiding the possibility that cannabis products will be marketed in specific ways. For example, the cannabis products would be prohibited from being formulated as a flavored vape product, including menthol, mint, mango, chocolate, coffee, or other flavors. The only exception to this policy would be vape products flavored as cannabis itself. These products also wouldn’t be able to be sold to persons under the age of 21 or in amounts greater than 10 ounces. They could not contain caffeine, nicotine or alcohol. They also could not be sourced from illicit trade channels.
  • Recalls: The FDA would be given rather generous authority to help order recalls for cannabis products. Recalls may be ordered if “there is a reasonable probability that a cannabis product would cause serious, adverse health consequences or death.” FDA would also be able to order a company to “immediately cease distribution of” the cannabis product. The affected companies would then be afforded an opportunity to provide testimony within a ten-day period.
  • Advisory Committee: The FDA would be tasked with standing up a Cannabis Products Advisory Committee, conceptually similar to the agency’s current Advisory Committees for other regulated products. The 12-person committee “shall include persons qualified in the subject matter,”. Critically, the committee would provide recommendations on the appropriate regulation of cannabis before the FDA would be able to promulgate those regulations.
  • Inspections: As with medical products, the FDA would have the authority to inspect records and could order them to be provided. For example, Section 704 of the FD&C Act would be amended to subject cannabis production facilities (including those manufacturing, processing, packing, or holding cannabis) to the same inspection authority as tobacco products and drugs.
  • Expedited Drug Review: There is a curious provision in the law that would provide for an expedited review process for drug products applications containing cannabis – but only if those products are made by a small business owned and controlled by socially and economically disadvantaged individuals or, alternatively, Native entities. This would create a designation process, the reward for which would be a priority review and additional regulatory assistance by the FDA. The bill describes a “drug containing cannabis” as one that “contains any article made or derived from cannabis.”
  • Security provisions: Any sponsor of a New Drug Application for a product containing cannabis would need to “provide effective controls and procedures to guard against theft and diversion of such drug.” The bill specifically mentions that a Risk Evaluation and Mitigation Strategy (REMS) may satisfy this requirement in some cases.
  • User Fees: The bill does not include a user fee program to help pay for the FDA’s new duties (popular suggestions Tweeted at us include PUFFA and REEFA). This could be one potential growth area in the future, especially if dietary supplements are ever subject to a user fee program. However, the FDA would receive a significant amount of funding – $425 million per fiscal year between 2023 and 2027 – to help it to carry out the law and its many requirements.

What’s next

  • The legislation has been under development for the past year, during which time legislators said they received more than 1,800 comments. The latest iteration of the legislation is 296 pages long compared to the 163-page version released last year, reflecting significant additions and modifications. It also enjoys significant support from some of the Senate’s most powerful legislators, including Schumer, Wyden and HELP Committee Chair Patty Murray, who has jurisdiction over the FDA.
  • The key question remains whether this bill can obtain sufficient political support to become law. As reported by our POLITICO colleagues who specialize in Cannabis, the odds of the legislation’s passage during this congressional session remain slim due to state-level concerns among even some Democrats, but the bill is sufficiently developed to the point that it is likely to shape debate on the topic for years to come.
  • One operational concern for the FDA: It would need to establish the Center for Cannabis Products within 90 days of the law’s passage – an extraordinarily fast turnaround for the FDA, especially since it often takes years to hire enough staff to make such a center operational. We expect that FDA’s capabilities would likely lag industry interest in the law, even despite the significant funding that would be made available to the center to help it function.
  • The distinct authority of the CCP is notable since the FDA’s Center for Drug Evaluation and Research now regulates most CBD-based drug products, while CFSAN regulates dietary supplements (including those that might eventually contain CBD), while the Center for Tobacco Products regulates a conceptually similar type of product. The design would elevate cannabis to a sort of super product, like tobacco, in the eyes of the FDA. That might cause some challenging with existing cannabis products subject to FDA regulation.

To contact the author of this piece, please email Alec Gaffney ( [email protected])

Key documents and dates