Reed Smith Client Alerts

The federal government finally seems ready to acknowledge the potential advantages of medicinal CBD and marijuana-derived medication. The Food and Drug Administration (FDA) and Drug Enforcement Agency (DEA) approval of Epidiolex, a CBD medication, and the steady progress of the Medical Cannabis Research Act in the legislature seem to indicate that the tide is turning. Accordingly, increased opportunities for the development and research of federally compliant marijuana-based medications are on the horizon, and companies must stand ready if they want in on the action.

Authors: Adam D. Brownrout Claudia Z. Springer Cori Annapolen Goldberg

On June 25, 2018, the FDA approved for the first time a drug containing a purified substance derived from marijuana known as a cannabidiol (CBD). Epidiolex is a prescription medication for treating two rare and severe forms of childhood epilepsy. Nearly three months after the FDA’s approval of Epidiolex, the DEA reclassified approved cannabidiol drugs from Schedule I to Schedule V. This marks the first time the DEA reclassified a cannabis-derived product, which typically are classified as Schedule I controlled substances under the Controlled Substance Act (CSA). The new Schedule V classification means that Epidiolex is classified as a drug with a low potential for abuse. Schedule I is reserved for drugs viewed as dangerous, addictive and without any medical benefit.

CBD remains a Schedule I substance. The DEA reclassified only those drugs containing CBD that the FDA previously approved. In order to gain DEA approval, the CBD drug must 1) be FDA approved, 2) be derived from cannabis, and 3) contain less than .1 percent THC. Currently, Epidiolex is the only drug that meets those criteria. Although other CBD medications are sold in states that have legalized them for medical use through their regulated cannabis markets, Epidiolex will be the only CBD containing medication available through traditional pharmaceutical channels.

It is clear that the federal government is loosening its grip on cannabis regulation; however, challenges remain for cannabis companies entering the federally regulated prescription drug market. Research and clinical studies on drugs containing cannabis remains severely limited due to cannabis’s Schedule I classification, which requires difficult to procure research licenses from the DEA. This has resulted in a catch-22 because Congress cannot alter federal regulations without additional research into the effects of cannabis, but additional research cannot be conducted without changing the federal regulations.