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CBD, Label Claims, Food Safety Pose Potential Legal Headaches for Industry

Specialty Food Association

Any companies that manufacture, import or distribute food products in the United States need to understand their legal obligations around labeling, food safety and other matters that could make them targets for government agencies or class-action lawyers.

“All of these issues are things you should think about before you launch a product, and all of these issues are things you should continue to think about even after you’ve launched a product,” said Brian Waldman, an attorney at ArentFox Schiff, during a recent SFA webinar called “Pre- and Post-Launch Legal Considerations for Food Manufacturers.”

Waldman and fellow ArentFox Schiff attorney Emily Leongini, a veteran of the Food and Drug Administration, cautioned that as the pandemic eases, regulators may be stepping up inspections and enforcement actions.

One of the growing areas of activity in the food industry has concerned the use of cannabis-derived ingredients in food and beverage products, including cannabidiol (CBD). Ever since the 2018 Farm Bill removed hemp from the federal list of controlled substances, companies gained the ability to use hemp and hemp-derived ingredients just like any other agricultural commodity.

However, because CBD is used as an active ingredient in some federally approved drugs, it is technically not FDA-approved for use in foods and beverages that are available for interstate commerce in the U.S.

The FDA has essentially taken a hands-off approach, however, and focused its enforcement primarily on companies that make health claims around the benefits of CBD.

Many companies in the food industry are hopeful the FDA will ease restrictions on CBD at some point, but Leongini said she doesn’t think that is likely.

“I am a very optimistic person, and I think the chances of that are very low,” she said. “I think it is only going to get changed if Congress decides to act.”

In addition to federal restrictions on CBD, many states also have their own regulations concerning CBD and other hemp-derived ingredients, resulting in a patchwork of requirements around the country that can be a headache for food companies seeking to use these chemicals.

Another common challenge related to ingredients relates to California’s Proposition 65, which requires that any food products sold in the state — including products available in California via ecommerce — include warning labels if they contain any of about 1,000 chemicals that the state has deemed can cause cancer or reproductive toxicity.

This law has created potential pitfalls for companies that might inadvertently include ingredients that contain these chemicals, said Waldman. For example, any ingredients derived from crops could absorb toxins from the ground without the knowledge of the farmer or the manufacturer that uses them.

He advises that if companies do receive a notice of violation about a potential violation of Prop 65, they should get a lawyer involved quickly because fast action may be required to minimize potential costs and disruption.

Labeling requirements

Food companies also need to be aware of labeling requirements, which include not only nutrition information, allergen notifications and other standard information, but also a disclosure if any ingredients are bioengineered. Companies that distribute food products should ensure that their suppliers are aware of this, as the distributors could be held responsible if the products they carry include bioengineered products that are not labeled as such.

Companies also need to be aware of the specific FDA definitions around claims such as “low fat” or “high in calcium.”

When it comes to product claims that are not defined by the FDA, such as “natural” or “no artificial colors,” for example, companies need to ensure that they are being truthful and non-misleading, and have adequate substantiation to make their claims, said Waldman.

Companies have some flexibility in their use of these claims, but “with flexibility comes responsibility,” Waldman said, noting that companies always need to keep in mind that their labels will be scrutinized carefully by class-action lawyers.

“No matter what claim you are making, you want to make sure that the claim is substantiated,” he said.

Organic claims, meanwhile, are regulated by the U.S. Department of Agriculture, not the FDA, and require certification by specific agencies.

Food safety

Food safety is another area that is coming under increasing scrutiny by the FDA, now that 10 years have passed since the Food Safety Modernization Act  went into effect. In the first several years after FSMA became law, the FDA focused on education about the steps companies need to take to comply, but now there is an expectation that companies will take it upon themselves to ensure they follow all the requirements.

“Ignorance is not an excuse at this point,” said Leongini.

In addition, companies that import foods to the U.S. need to ensure that the facilities that produce the products overseas comply with FSMA requirements.

“We are starting to see a lot more enforcement action in this area,” Leongini said.

All food facilities used in the production of foods for sale in the U.S., whether located in the U.S. or overseas, must also be registered with the FDA. This is a relatively simple process, but both failure to register with the FDA and failure to meet FSMA requirements can result in costly delays at customs entry points.

Food safety remains an ongoing responsibility for food companies even after products are distributed. Companies should be aware of their obligations around notifications and product recalls in the event of contamination or other issues that pose a danger to the public.

Waldman repeatedly emphasized that companies need to not only ensure that their own operations are in compliance with the wide range of food regulations, but they must also ensure that the partners they work with are in compliance as well. Companies need to conduct diligence on their business partners, and ensure that they have contracts in place that protect them in case their partners run afoul of the law.

To learn more, access the webinar recording here. 

Related: What to Expect From FDA in 2022; CBD Update: The Patchwork of Regulations Continue.