On June 7, 2019, the Office of Environmental Health Hazard Assessment (OEHHA) announced that it has adopted a final regulation eliminating the requirement for coffee to carry a Proposition 65 warning label. The regulation overturns a California State Court decision that found that coffee retailers failed to prove that the chemicals present in coffee, such as acrylamide, pose no significant risk of harm, requiring coffee to bear a warning.   Continue Reading California’s OEHHA Finalizes Regulation Rescinding Warning Requirement for Coffee

Since enactment of the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”), confusion has run rampant over when and where hemp or hemp produced cannabidiol (CBD) can legally be used. Animal food and feed are no exception. Developments at the U.S. Food and Drug Administration (FDA), as well as the actions taken by the Association of Animal Feed Control Officials (AAFCO), should be of particular interest to animal feed and pet food manufacturers interested in expanding into the so-called green rush.  Industry participants should take notice of these changes and evaluate the impact they have on their businesses. Continue Reading CBD in your Animal Food or Feed? Not So Fast.

The U.S. Food and Drug Administration (FDA) recently issued a draft guidance to advise food manufacturers of its intent to exercise enforcement discretion for the name “potassium chloride salt” in the ingredient statement on food labels as an alternative to the common or usual name “potassium chloride.” Potassium chloride is often used as a partial substitute for sodium chloride (i.e. salt) in many foods.

Continue Reading FDA Issues Draft Guidance Regarding Use of an Alternative Name for Potassium Chloride in Food Labeling

Today, the U.S. Food and Drug Administration held a meeting to discuss its regulatory approach to products that contain cannabis and cannabis-derived compounds, including cannabidiol (CBD). The public hearing was intended to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling and sale of products containing cannabis and cannabis-derived compounds. Along with holding the public meeting, FDA is accepting written comments through a docket on those topics until July 1, 2019.  Continue Reading At Public Meeting, FDA Requests Data on Dosage and Delivery Formats of CBD and Other Cannabis-Derived Compounds

Like most states, Minnesota has a three-tier system for distributing alcoholic beverages – the manufacturer sells to a wholesaler who sells to a retailer. Minnesota allows local wineries to apply for a farm winery license, which permits the holder to sell direct to both retailers and consumers.  The catch is that the winery must use more than 50% of its grape juice from grapes produced in Minnesota.  A winery may obtain a one-year dispensation from this requirement if it certifies that sufficient supplies of Minnesota grapes are impossible to obtain.

Two farm wineries sued the Minnesota Commissioner of Public Safety, who enforces the statute, alleging that it violates the dormant commerce clause by discriminating against out-of-state grape juice. The District Court granted the Commissioner’s motion for summary judgment.  The Court acknowledged that the statute caused plaintiffs injury in fact, because it interfered with their ability to expand their businesses.  But it reasoned that, if plaintiffs wanted to use more out-of-state grapes, they could apply for a wine manufacturing license, which imposes no such limitation.  Thus, the injury they sustained was the product of their own voluntary business decision.  The catch, however, is that a wine manufacturer must use the three-tier distribution system.  It cannot sell directly to either retailers or consumers.

Plaintiffs appealed. They argued that the District Court’s finding that the statute interfered with plaintiffs’ fiscal planning in and of itself established that the injury was fairly traceable to the statute.  According to plaintiffs, the District Court’s holding would force them to operate a different business than the one they prefer to.  They want to operate as farm wineries, due to the efficiencies in distribution that status allows, but the statute prevents them from doing so unless they use a majority of Minnesota grapes.  This theory, they assert, would allow states to discriminate against out-of-state commerce with impunity by authorizing an alternative, less desirable way of doing business.

The Commissioner argued that plaintiffs lacked standing for three separate reasons. First, the Commissioner argued that there had never been an enforcement action against a winery for using out-of-state grapes or threatened to do so.  She also claimed that her office had never denied an application for exemption.  Thus, she claimed that there was no credible threat of injury to the plaintiffs.

Plaintiffs responded that a history of enforcement or threatened enforcement has never been the standard for standing to file a pre-enforcement challenge. Rather, it is enough that there is a substantial risk of enforcement.  Here, plaintiffs have not faced a threat of enforcement because they have complied with a statute they believe to be unconstitutional.  The Commissioner has never renounced any intention to enforce the law.  And if she has no intent to do so, one wonders why she resists the lawsuit.

As for the exemption, it is limited to one year and it facially restricts exemptions to years in which plaintiffs cannot buy enough Minnesota grapes. Plaintiffs emphasized that they cannot rely on one-year exemptions, which may or may not be granted in future years, as a basis for planning their business.

The Commissioner’s second argument is that plaintiffs have not suffered any tangible economic harm as a result of the statute. The statute was in place when both plaintiffs began selling wine, so it did not cause them to terminate contracts or alter their business practices.  The Commissioner also claimed that Minnesota could constitutionally impose its three-tier distribution system, so plaintiffs’ inability to operate their business as they chose is not legal injury.

Plaintiffs respond that the statute has limited their ability to expand their business and plan for the future and that is sufficient economic injury to support standing. They acknowledge they have no right to be free of the three-tier system, but argue if Minnesota wishes to makes an exception to that distribution method it must do so in conformity with the Constitution.

Plaintiffs also assert that the Commissioner’s theory would authorize numerous forms of discrimination. A church would lack standing to challenge its exclusion from a state grant if it could obtain the necessary funds by private donation.  A public employee would lack standing to allege discrimination against her if she could find a comparable job in the private sector.

The Commissioner’s third argument is that whatever injury plaintiffs sustained is not fairly traceable to the statute because they could have obtained a wine manufacturer’s license that would allow unlimited use of out-of-state grapes. Plaintiffs respond that their injury – their inability to use non-Minnesota grapes within a farm winery license – is fairly traceable because, but for the statute, the injury would not exist.  They argue that they are facing a Hobson’s choice of continued compliance with an unconstitutional statute and risking prosecution.

On the merits, plaintiffs argued that the statute violates the dormant commerce clause, because it facially discriminates against out-of-state grapes – i.e., it prohibits farm wineries from purchasing more than 50% of those grapes.  The Supreme Court has long held that such discrimination is unconstitutional unless the state can establish a compelling state interest that cannot be satisfied by any lesser means – a very high standard that has rarely been met.  In proceedings before the District Court, the Commissioner acknowledged that she could not satisfy that burden.

The Commissioner had very little to say about the merits. She argued that there was no overt discrimination because the law only regulates wineries in the state of Minnesota.  As plaintiffs made clear in their reply, that is irrelevant, because the way in which Minnesota regulates those in-state wineries is limiting the amount of grapes they can procure from other states.  That is clearly discrimination against interstate commerce.

Based on the oral argument we expect the Eighth Circuit to reverse. The panel addressed virtually no questions of the plaintiffs.  The questions directed to the Commissioner clearly suggested that the judges thought the inability to expand plaintiffs’ businesses was concrete harm and it was directly related to the limit on out-of-state grapes.

The Statesman Journal reported on potential Oregon legislation that would allow farmers to sue for contamination from genetically engineered crops.

The LA Times discussed a California law outlawing a certain pesticide.

CBC discussed the plant-based protein business.

The Canadian Grocer discussed opportunities for cannabis-based food and beverages.

Food Dive reported on beef industry debut of a sustainability framework.

 

The Alcohol and Tobacco Tax and Trade Bureau (TTB) recently issued an industry circular which makes clear that cannabidiol (CBD), a product derived from hemp, is not permitted in alcohol beverages.

TTB generally consults with the U.S. Food and Drug Administration (FDA) when establishing whether an ingredient for use in an alcoholic beverage is safe. Last December, the Agriculture Improvement Act of 2018, which is commonly referred to as the 2018 Farm Bill, was enacted. The 2018 Farm Bill amended the definition of marijuana under the Controlled Substances Act to exempt “hemp”, which is defined as:

the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9-tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis. Source: 7 U.S.C. 1639 o(1).

Following passage of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb, MD, issued a statement in December noting that the use of CBD and delta-9-tetrahydrocannabinol (THC) in food is still prohibited. As explained in Commissioner Gottlieb’s statement and an accompanying FDA guidance document, Sections 301(ll) and 201(ff)(3)(B) of the Federal Food, Drug and Cosmetic Act prohibit foods and dietary supplements from containing CBD and THC because they are active ingredients in approved drugs. FDA has recently approved Epidiolex, a drug that contains purified form of CBD for the treatment of seizures for certain conditions, as well as Marinol and Syndros, drugs which include the active ingredient dronabinol, a synthetic form of THC.

TTB previously issued guidance in May 2018 that allowed the use of hemp ingredients, such as hemp, hemp seed, and hemp oil in approved alcoholic beverage formulas. This guidance was issued prior to both the enactment of the 2018 Farm Bill and FDA’s December 2018 announcement that it had no questions regarding the generally recognized as safe (GRAS) notices submitted by Fresh Hemp Foods Ltd. for the use of hulled hemp seed, hemp seed oil, and hemp seed protein powder in foods.

According to the industry circular, TTB will not approve any formulas that contain ingredients that are controlled substances under the CSA, even if the ingredient meets the new definition for hemp. However, certain alcohol beverages may still be legally marketed as containing hemp according to the circular, so long as those products contain only hemp seeds or hemp oil as both TTB and FDA have approved those ingredients as permitted food additives. For any formulas that contain hemp ingredients other than hemp seeds or hemp seed oil, TTB will return those applications for correction.

While TTB generally takes a conservative approach to labeling, TTB generally will permit graphics and terminology on the label that accurately and specifically identify the use of a hemp derived ingredient. TTB will generally not approve labels that create a misleading impression that the product contains marijuana or has similar effects to those of a controlled substance.

Public Meeting

The FDA is holding a public hearing on May 31, 2019, where it is seeking data and information regarding the safety of products containing CBD. Because TTB closely consults with FDA regarding the safety of ingredients, alcoholic beverage manufacturers interested in using CBD and hemp ingredients in their products should seriously consider monitoring this meeting and possibly testifying or submitting comments to FDA.

Contact Us

Husch Blackwell has experience working with alcoholic beverage companies on these types of regulatory matters. Our Cannabis, Alcohol and Beverage, and FDA lawyers are available to discuss the TTB announcement and upcoming meeting. Contact Adena Santiago, Seth Mailhot, Emily Lyons or your Husch Blackwell attorney.

The U.S. Department of Agriculture (USDA) Food Safety Inspection Service (FSIS) has proposed to eliminate requirements that certain meat and poultry products display net weights using a dual declaration format (i.e. requiring that some products declare weight in both pounds and ounces). The proposal would remove the dual net weight declaration for meat or poultry products in packages of at least one pound or one pint, but less than four pounds or one gallon. This rulemaking was proposed in response to the FSIS docket seeing public input on regulations that should be reformed or repealed, a part of President Trumps regulatory reform agenda.

As outlined in 9 C.F.R. Sections 317.2(h)(5) and 381.121(c)(5), these packages currently must bear a net weight label that declares the contents in both ounces and pounds or specific units for liquid products. However, under the proposal, one unit of measurement would be used on the product label, instead of using both measures. For example, a product would state “Net Wt. 24 oz.” or “Net Wt. 1.5 lbs.” rather than “Net Wt. 24 oz. (1.5 lbs.).”

If finalized, FSIS would permit meat and poultry product companies to exhaust existing dual declaration label inventory or to continue using the existing dual declaration label indefinitely.

In a statement issued with the proposal, FSIS Administrator Carmen Rottenberg said, “[i]t’s simply good government to review old regulations to see if they are outdated and burdensome. FSIS doesn’t believe that a duplicative labeling requirement helps consumers and sees it as an unnecessary requirement for industry.” This signals that FSIS is reviewing and acting on industry recommendations for regulations that are in need of change. FSIS-regulated entities should consider if there are additional opportunities for regulatory reform and submit such information to the agency.

FSIS is seeking comments on the proposal until June 17, 2019.

Contact Us

Husch Blackwell has experience advising meat, poultry and egg product processors on the regulation of their products. Our FDA lawyers are available to discuss the proposal and if adopted how it would impact their products’ labeling. Contact Seth Mailhot, Emily Lyons, or your Husch Blackwell attorney.