In a recent interview with Food Navigator USA, Partner Bill Acevedo discusses the recent lawsuit against Unilever that alleges the company misleads customers by representing Ben & Jerry’s ice cream products as being made with milk from “happy cows” in a Caring Dairy Program. The lawsuit states that only a small percentage of the milk and cream used in these products comes from these “happy cows and that the majority originates from regular, mass-produced dairy operations.

Bill looks at the possible strategies Unilever could undertake to defend itself in the lawsuit. He offers one possible defense: “show that the prospective class is undermined by the predominance of individual issues,” questioning whether every customer purchased the product because its milk and cream came from “happy cows.” As Bill says, maybe the customer really likes the ice cream flavor.

To read the full article, please visit Food Navigator USA.

“Krümel Monster Muffins” by Xitu is licensed under CC BY-SA 4.0

The regulatory status of a food ingredient is governed by certain bright line rules.  Any substance that is reasonably expected to become a component of food is a food additive.  A food additive is subject to premarket approval by the Food & Drug Administration (FDA) unless the substance is generally recognized as safe (GRAS) among experts qualified by scientific training and experience to evaluate its safety under the conditions of its intended use, or it otherwise satisfies some other exclusion from the food additive definition in section 201(s) of the Federal Food, Drug, and Cosmetic Act (Act). Any food additive that is intended to have a technical effect in the food is deemed unsafe unless it either conforms to the terms of a regulation prescribing its use or to an exemption for investigational use.  Any food that contains an unsafe food additive is adulterated under section 402(a)(2)(C) of the Act.

However, when it comes to CBD, this regulatory framework gets lost in the minds of many businesses looking to gain a toehold in the marketplace.  In December, I wrote a word of caution regarding the passage of the Farm Bill and its meaning (or lack thereof) for CBD in food and dietary supplements.  The intervening months since the Farm Bill’s passage have proven to be interesting.  Confusion, whether caused by ignorance of the applicable laws and regulations or denial about the limitations of those controlling rules, seems to be the norm when it comes to CBD in food and dietary supplements. 

Whenever I tell an interested manufacturer or distributor that CBD is not an authorized ingredient in either category, I routinely hear familiar protests: “Well, how come I see other products proudly marketing CBD as an ingredient?  What about the Farm Bill – what if the CBD is from hemp?”  The short answer, of course, is that while the FDA has been facing calls to update its regulations in light of the Farm Bill, CBD is still not authorized by any federal law or regulation to be used in food or dietary supplements, which then informs state law and regulations, which are largely modeled on the Act.  The longer answer, though, is because cannabis study has been greatly controlled and stymied by the federal government, because regulators may not understand CBD and how it can be derived, and because the FDA has not begun to meaningfully crack down on CBD products apart from a few Warning Letters pertaining to unsubstantiated CBD claims, policing the market place has fallen upon individual states.  The absence of consistent policing efforts to date, in turn, may give the impression that CBD use in food and dietary supplements is acceptable.   That should not be the takeaway.  As policing efforts are picking up steam, a quick rundown of what is happening in a few nationally influential states might be helpful in clearing up what seems to be so commonly misunderstood:  CBD is not an authorized additive or ingredient in food and dietary supplements.

California

While a liberal state in many regards, California is following the FDA’s lead.  California Health & Safety Code Section 109935 defines “food.”  Excluded from that definition are products containing cannabis.  Thus, as a threshold step, California is not classifying edibles as food; rather, such products can only be sold at licensed cannabis dispensaries.

Additionally, the California Department of Public Health has squarely addressed whether industrial hemp-derived CBD can be used in food or dietary supplements:

California incorporates federal law regarding food additives, dietary use products, food labeling, and good manufacturing practices for food . . . . Currently, the United States Food and Drug Administration (FDA) has concluded that it is a prohibited act to introduce or deliver for introduction into interstate commerce any food (including any animal food or feed) to which tetrahydrocannabinol (THC) or CBD has been added. This is regardless of the source of the CBD – derived from industrial hemp or cannabis.  Therefore, although California currently allows the manufacturing and sales of cannabis products (including edibles), the use of industrial hemp as the source of CBD to be added to food products is prohibited. Until the FDA rules that industrial hemp-derived CBD oil and CBD products can be used as a food or California makes a determination that they are safe to use for human and animal consumption, CBD products are not an approved food, food ingredient, food additive, or dietary supplement.

New York

New York City regulators just took a bite out of the Big Apple’s CBD restaurateurs.  The New York Times recently reported that the Department of Health and Mental Hygiene confiscated one bakery’s CBD-infused goods, raw ingredients and CBD powder, and it has ordered all restaurants under its jurisdiction not to sell any food products containing CBD.  Although the bakery claimed that there was “a general lack of clarity” around the use of CBD in food, ignorance of the law is what really seems to have resulted in that uncertainty on the part of the bakery.  The regulators, on the other hand, seem clear eyed.

Texas

No, no, no.  Well, maybe.  That’s pretty much sums up Texas, which is considering legislation that would establish regulations regarding hemp cultivation.  Even so, Texas (like California) is following the FDA’s lead and it does not allow CBD in any food, dietary supplement or cosmetic.

Colorado

But – wait!  What about Colorado?!  Well, it is true that the Colorado Department of Public Health & Environment does allow use “of all parts of the industrial hemp plant” as a food ingredient “in Colorado.”  However, Colorado is not saying that CBD, in general, can be used as a food additive, nor is it suggesting that its policy is consistent with federal or other state law, and its permissive attitude regarding industrial hemp comes with strict conditions. 

In order for food to contain industrial hemp, a manufacturer must be able to demonstrate the following:

• All parts of the hemp plant utilized in food must come from a state that has an established and approved industrial hemp program or a country that inspects or regulates hemp under a food safety program or equivalent criteria to ensure safety for human consumption.

• The producer/grower must be in good standing and compliance with the governing laws within the state or country of origin.

• The industrial hemp must conform to the standard of identity established in C.R.S., §35-61-101(7) of no more than three-tenths of one percent delta-9 tetrahydrocannabinol (THC).

• The use of other parts of the hemp plant other than seed and its derivatives (seed meal, flour, and oil), must be lab tested to establish that THC levels are not above the allowable limit of THC.

• The product must be labeled in conformance with state and federal labeling laws, including:
  • clearly identify hemp as an ingredient;
  • clearly identify CBD and the amount of CBD if added as an isolate;
  • include the statement “FDA has not evaluated this product for safety or efficacy” and;
  • not contain any health or benefit claims.

• The producer must be able to document that the finished product does not contain more than three-tenths of one percent THC.

Colorado’s conditions are thoughtful, particularly as they relate to testing and identification, but they do nothing to insulate a manufacturer or distributor from the policies of other states.  What goes in Colorado does not mean that it will be accepted in other jurisdictions. Indeed, police in Idaho and Oklahoma have started seizing products being transported across state lines that they deem to be cannabis over the protests of the transporters who claim that the products are actually hemp and, thus, protected from such seizure.  But, that is a story for another post…

Given this brief overview of what some states are doing, I hope that everyone will please keep in mind that the Wild West-approach is better suited for movies.  No manufacturer, distributor or retailer should act with impunity or out of ignorance to the legal restrictions surrounding CBD and its use in food or dietary supplements.  While there are many people and organizations working to enact sensible policies, we just are not there yet. Until we are, we need to work within the law in an effort to cultivate the legitimacy necessary for the cannabis industry to thrive and grow.

[Special thanks for this guest blog from Wendel Rosen insurance attorney Gary Barrera.]

Last month, a California federal court held that a food manufacturer’s insurers had no duty to defend or indemnify the insured for claims arising out of the manufacturer’s alleged false advertising of its product because the claims were based on the manufacturer’s intentional and deliberate decisions regarding the content of its advertising.

In West American Insurance Co. v. Nutiva, Inc., a class action lawsuit was filed against Nutiva arising out of its alleged misrepresentations about the health effects of its coconut oil products. Nutiva marketed its coconut oil products with statements such as “100% less cholesterol than butter,” “better than butter” and “0g trans fats.” The class action plaintiffs alleged that, contrary to Nutiva’s advertising that coconut oil is healthy, consumption of coconut oil causes adverse health effects, including impaired endothelial function.

Nutiva’s insurers filed a declaratory relief action seeking a judicial declaration that they had no duty to defend or indemnify Nutiva because there was no potential for coverage under their respective general liability policies. The policies insured Nutiva for damages because of “bodily injury” or “property damage” caused by an “occurrence,” which the policies defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The insurers did not dispute that the class action plaintiffs’ allegation of “impaired endothelial function” constitutes “bodily injury,” but argued that the injuries alleged by the plaintiffs arising out of Nutiva’s false advertising of its coconut oil products were not the result of an “accident,” which California courts define as “an unexpected, unforeseen, or undersigned happening or consequence from either a known or an unknown cause.” In response, Nutiva argued that the plaintiffs’ alleged injuries were the result of an “accident” because “an additional, unexpected, independent and unforeseen happening,” such as diabetes, hypertension or smoking, could have been an intervening event that produced the “impaired endothelial function.”

The court held that the insurers had no duty to defend or indemnify Nutiva because the false advertising claims did not arise from an “accident,” but rather, from Nutiva’s “deliberate marketing decisions.” The court reaffirmed that under California law, “accident” in the general liability insurance context refers to the insured’s conduct, and if the insured intends to perform the acts resulting in the alleged injury or damage, there is no “accident” even if the insured did not intend to cause injury. Since the class action complaint alleged that Nutiva intentionally marketed its coconut oil products with positive statements about its products’ health benefits, and these statements misrepresented the products’ health effects, the court held there was no “accident,” regardless of whether Nutiva did not intend the alleged adverse health effects from the use of its products.

The court also rejected Nutiva’s argument that the alleged health effects could have been caused by unintended problems in the manufacturing process that rendered the products defective. The court opined that although Nutiva speculated that its products might have been defective, it did not identify any supporting evidence, nor did it contest that it intended to advertise and sell its coconut oil products as healthy. Since no allegations in the class action complaint raised the possibility that Nutiva’s actions in labeling, advertising, and selling its coconut oil products were accidental, the insurers had no duty to defend or indemnify Nutiva.

The Nutiva case serves as a lesson to product manufacturers and especially food manufacturers that bodily injury or property damage claims arising out of the manufacturer’s alleged false or deceptive advertising of its product will not be covered under a general liability policy if the manufacturer intended to label and advertise its product in a certain manner, even if the manufacturer did not intend to cause injury to its customers via the sale or marketing of its product. Food manufacturers should carefully scrutinize the content and accuracy of their advertising in order to minimize their potential exposure for bodily injury or property damage claims based on false advertising, and scrutinize their insurance policies for possible lack of coverage for such exposure.  It is also critical for food manufacturers to routinely review their coverage with an experienced insurance broker to ensure they have the maximum scope of coverage possible.

Wendel Rosen partner Bill Acevedo was recently asked by Natural Products Insider to weigh in on the recent lawsuit filed against Nestlé USA and its use of a NO GMO Ingredient symbol on some of its food packaging.  While the Food, Drug & Cosmetic Act prohibits labeling that is false or misleading in any particular, it is not at all clear that Nestlé USA has run afoul of this threshold requirement. Check out the article, which was first published on the Natural Products Insider website on August 16, 2018, to learn more about Bill’s take on this latest class action filing.

[Author note: this post was written by Wendel Rosen attorney Wendy Manley.]

Just weeks after a court determined that a Proposition 65 (Prop 65) warning is required for acrylamide in coffee, a California appellate court ruled a warning is NOT required for acrylamide in breakfast cereals.  Acrylamide is listed as a carcinogen by the State of California and, consequently, a warning must be provided before exposing California consumers to acrylamide.

Warning exemption pending for acrylamide in coffee 

Not surprisingly, the coffee decision created a high degree of confusion and disbelief among dedicated coffee drinkers who, just months earlier, embraced the good news that coffee may protect against certain cancers.  In June, the International Agency for Research on Cancer (IARC) released a monograph that reviewed more than 1,000 studies of coffee and cancer.  IRAC concluded that coffee is associated with a reduced risk of liver and uterine cancer and there is inadequate evidence that coffee causes cancer.  In other words, the scientific studies show that while acrylamide causes cancer, coffee — which contains acrylamide — does not.

Recognizing that the Prop 65 warning requirement cannot be reconciled with the science, OEHHA (the Office of Environmental Health Hazard Assessment) immediately proposed a new (and still pending) regulation exempting coffee from Prop 65 warning requirements with respect to acrylamide and certain other chemicals.  The proposed rule states: “Exposures to listed chemicals in coffee created by and  inherent in the processes of roasting coffee beans or brewing coffee do not pose a significant risk of cancer.”  In its Initial Statement of Reasons supporting the rule, OEHHA identifies other Prop 65 chemicals formed in the brewing of coffee that would be encompassed by the exemption, including acetaldehyde, furfuryl alcohol, formaldehyde, naphthalene, and several chemicals with polysyllabic, tongue-twisting names.

The coffee research highlights a gap in Prop 65’s science: the mere presence of a chemical known to cause cancer (even at levels above what is believed to be safe), does not necessarily equate to a risk of cancer from exposure to an item that contains that chemical.  Most products, unlike coffee, have not been exhaustively studied for cancer risk, and few manufacturers either have or are willing to expend the resources necessary to undertake a comprehensive risk assessment to determine whether a product containing a Prop 65 chemical in fact presents a risk of cancer or reproductive toxicity under Prop 65.  As a result, many warnings are not supported by science, and some may not be supportable were the research performed.  To add further uncertainty, OEHHA has not established “safe harbor” levels for most of the more than 900 chemicals listed under Prop 65, making it even more difficult for manufacturers to complete a risk assessment.

OEHHA will hold a hearing on the proposed coffee warning exemption on August 16, 2018, and will accept comments through August 30, 2018.  Follow developments on the OEHHA website.

Warning requirement for acrylamide in breakfast cereal preempted

In another recent decision, a court determined that Prop 65 warnings are NOT required for breakfast cereal.  The basis for the decision was the principle of federal preemption: states cannot implement laws that conflict with federal laws.  The court found that Prop 65 poses an obstacle to the accomplishment and execution of a policy under federal law in which the Food and Drug Administration (FDA) promotes whole grain foods in the American diet.  When there is no express preemption provision in federal law, the court examines the entire scheme of a federal statute for implied preemption, and if the court determines that its purpose and operation are frustrated by the state law, then the state law is preempted.  In Post Foods v. Superior Court, the court found Prop 65 is an obstacle to the accomplishment and execution of the FDA policy of promoting whole grain foods in the American diet.

Although most cereals contain acrylamide at a level that would require a Prop 65 warning, whole grains are a significant source of important vitamins, minerals and fiber.  Based on research demonstrating the health benefits of whole grains, the FDA established a policy to promote the consumption of whole grains.

FDA described its policy in two letters to OEHHA and the Attorney General in 2003 and 2006 advising against acrylamide warnings on food.  FDA was concerned that labeling foods with warnings about dangerous levels of acrylamide would confuse and potentially mislead consumers, both because the labeling would be so broad as to be meaningless and because the risk of consumption of acrylamide in food is not yet clear.  FDA also worried the warning would dilute its messaging about healthy eating, mislead consumers into thinking acrylamide is only a hazard in store-bought foods, and ultimately cause consumers to avoid grains (specifically breads and cereals), potentially increasing their risks of disease from less fiber and other beneficial nutrients in their diets.  FDA concluded that Prop 65 warnings on foods would “conflict with FDA’s ongoing efforts to provide consumers with effective scientifically based risk communication to prevent disease and promote health.”  FDA’s advised that Prop 65 warnings for acrylamide should not be placed on foods, including breakfast cereals, unless and until the science supports such a warning.  FDA noted that even if acrylamide warnings became warranted, FDA may require manufacturers (as it does with trans fats) to identify foods containing acrylamide and the amount based on quantities consumed.

The Second District Court of Appeal found FDA’s letters thorough, consistent, and containing persuasive reasoning why Prop 65 acrylamide warnings on whole grain cereals would mislead consumers and lead to health detriments.  Prop 65 warnings, it concluded, conflict with a clear federal program to encourage healthy eating by consumers, and so is preempted.

Under the Post Foods case, breakfast cereals are now exempt from Prop 65 warnings (pending any potential appeal).  The exemption should extend to other grain products such as bread and granola bars, and arguably to other foods encompassed by FDA’s letters, but it is not generally felt that the decision will discourage all Prop 65 food claims based on acrylamide.  The decision may also invigorate other defendants to pursue federal preemption arguments, given appropriate supportive facts.

My favorite Megan Mullally quote, and there are many, is her ode to coffee: “I’ll quit coffee. It won’t be easy drinking my Bailey’s straight, but I’ll get used to it. It’ll still be the best part of waking up.”

Wendel Rosen attorney, Wendy Manley, recently wrote about the new labeling requirements for coffee. As she noted, a California court recently determined that coffee must bear a warning under the state’s Safe Drinking Water and Toxic Enforcement Act (aka “Prop 65”) regarding acrylamide, a carcinogen found in low levels in coffee due to the roasting and/or brewing process. As it turns out, things may not be so dire after all, and coffee lovers may soon raise a mug to celebrate California regulators.

On Friday, June 15, the Office of Environmental Health Hazard Assessment (OEHHA) proposed to add a new section of the California Code of Regulation, stating that no significant risk of cancer is presented by drinking coffee. OEHHA is the lead state agency that implements Prop 65 and has the authority to promulgate and amend regulations pertaining to it. Citing to the International Agency for Research on Cancer (IARC) in its press release, OEHHA justified its proposed regulation, in part, on the IARC’s conclusion that drinking coffee does not present a significant risk of cancer. Thus, while acrylamide is designated as a probable human carcinogen, a cup of joe is not considered to be, according to IARC research.

This conclusion isn’t surprising to the coffee industry. In 2016, the cancer agency of the World Health Organization removed coffee from its “possible carcinogen” list, and there have been numerous published studies touting the potential health benefits of drinking coffee over the years.

OEHHA maintains that its proposed regulation will benefit “the health and welfare of California residents by helping to avoid cancer warnings for chemicals in coffee that do not pose a significant cancer risk.” One can’t help but wonder, though, if this regulatory about face is intended to benefit Prop 65, too. As reported in Law360 (a subscription is required), a bipartisan group of members of the U.S. Senate and the U.S. House of Representatives may be looking to undermine labeling requirements on the federal, state and local levels, and in particular, Prop 65, by requiring that labels clearly identify potential cancer risks of products based on the “best available science.”

The proposed legislation, H.R. 6022 and S. 3019, would require labeling warnings that are supported by science that is based upon objective scientific practices, which includes findings and data that are reliable and peer reviewed when possible. According to Rep. Adam Kinzinger (R-Ill.), the proposed federal legislation is intended to counter state laws that may cause some products to be “incorrectly labeled with warnings about harms that do not exist.”

To be sure, the fight over coffee and the scope of Prop 65 will not end soon. Public comment on the proposed regulation will be open until August 30, 2018, likely fielding comments for and against the regulation. Should OEHHA’s proposed regulatory change pass, it is also likely that it would be challenged in court. And, given the detractors of Prop 65 both in and outside of California, a challenge to OEHHA’s proposal may be the least concern. Congress rarely agrees on much these days, but they definitely seem jittery over the recent efforts to regulate their morning cup. So, we’ll continue to monitor this potential food fight and keep you posted.  For now, just “sip” back and relax.

With adult use of cannabis now legal in California as of January 1, 2018, some food companies may be considering adding “edibles” – cannabis-infused products that are intended for human consumption – to their product lines.  According to Forbes, edibles may account for more than half of the growth in the booming cannabis industry, as high-end food products infused with cannabis and cannabinoids are growing in demand for the discerning consumer who cares not only about the high, but also taste and quality.

But with legalization comes regulation, and the California Department of Public Health has issued emergency regulations detailing what is and isn’t allowed in manufacturing and selling edibles. Among the regulations are stringent requirements for THC content per serving and per package, and packaging and labeling requirements.

Here are some key things to know about manufacturing and selling edibles under the new California regulations.

Prohibited Products

There are certain things that you just can’t make into and sell as edibles.  Alcoholic beverages, dairy products, meat (other than dried meat) and seafood are out.  Products that have to be kept below 41° Fahrenheit to make them fit for human consumption are also out, as is juice that is not shelf-stable.  Products with additives such as nicotine or caffeine that would increase potency, toxicity or addictive potential, or that would create an unsafe combination with psychoactive substances, are prohibited.  But a product that has naturally-occurring caffeine, like tea, coffee or chocolate, is fine.  You can’t add cannabinoid concentrate or extract to commercially available candy or snack food with no further processing, and products that are easily confused with commercially available food products that do not normally contain cannabis are prohibited.

Don’t Make Them Appealing to Children

A big concern addressed by the regulations is preventing children from accidentally ingesting cannabis edibles.  To that end, manufacturers of cannabis edibles can’t make products that might be attractive to children.  Edibles that are shaped like a human, animal, insect or fruit are specifically prohibited.  If you are going to make cannabis gummies, for example, don’t make them look like gummy bears and don’t call them “candy.”    The terms “candy” or “candies” can’t be used.  The label and packaging can’t contain content that imitates candy packaging or labeling, or include anything that might appeal to children, such as cartoons or other images, characters, or phrases popularly used to advertise to children.  Finally, the packaging itself has to be child resistant and can’t look like packaging used for products typically marketed towards children.

THC Content and Servings

The regulations limit the amount of THC (tetrahydrocannabinol, the chemical compound in cannabis responsible for a euphoric high) that can be in edibles. Edibles may not contain more than 10 milligrams of THC per serving and 100 milligrams of THC per package.

Edibles have to be packaged so that a consumer can accurately identify a single serving.  Products that contain more than one serving have to be scored or delineated to indicate a single serving, if it is in solid form.  If it is not in solid form, it has to be packaged in such a way that a single serving is readily identifiable. For example, if selling a cannabis-infused drink, you may want to include a dosage cup similar to what comes with cough syrup. Each serving in a multi-serving package has to contain about the same amount of THC.

All product ingredients or components, other than the cannabis, cannabis concentrate, or terpenes, must be permitted by the U.S. Food and Drug Administration (FDA) for use in food or food manufacturing (Everything Added to Food in the United States).

Packaging Requirements

The packaging for edible cannabis products must:  (1) protect the product from contamination, (2) be tamper-evident, meaning that it is sealed so that it cannot be opened without obviously breaking the seal, (3) be child-resistant, (4) not imitate packaging for products typically marketed to children, (5) be opaque, and (6) if containing more than one serving, be re-sealable so that child resistance is maintained.

Labeling Requirements

If you are a food manufacturer, you know that making sure your labels are compliant with FDA regulations is important.  It is no different under the California regulations for edible cannabis products.  The labeling on packages of edibles must have two components:  a primary panel and an informational panel.

The primary panel must include:

1. The identity of the product in a text size reasonably related to the most prominent printed matter on the panel, and the words “cannabis-infused” immediately above in a text size larger than the text size used for the identity of the product;
2. The universal symbol as shown below, printed conspicuously and legibly, not less than a half inch by a half inch;
   
3. Net weight or volume of the contents; and
4. THC and CBD (Cannabidiol, the non-psychoactive cannabis compound) content of the package, as well as the THC and CBD content per serving, all expressed in milligrams.

The informational panel must include:

1. Name and contact number or website address of the manufacturer;
2. Date of manufacture and packaging;
3. The following statement in bold print: “GOVERNMENT WARNING: THIS PRODUCT CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. CANNABIS PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF CANNABIS PRODUCTS MAY BE DELAYED UP TO TWO HOURS. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION.”
4. If for medicinal use, the statement “FOR MEDICAL USE ONLY”;
5. A list of all product ingredients in descending order of predominance by weight or volume;
6. If the product contains a major food allergen, the word “contains” followed by a list of such allergens;
7. The names of any artificial food colorings contained in the product;
8. The amount, in grams, of sodium, sugar, carbohydrates, and total fat per serving;
9. Instructions for use, such as the method of consumption or application, and any preparation necessary prior to use;
10. The product expiration date, “use by” date, or “best by” date, if any; and
11. The UID (the unique identifier for use in the track-and-trace system established by the Department of Food and Agriculture) and, if used, the batch number.

The label can’t contain any claims that the cannabis was grown in a California county if it was not actually grown there and can only name the California county in which it was actually grown.  The label can’t have any false or misleading information, and can’t make any health-related claims that are untrue or misleading. However, the label can include a statement of effects – information on the characteristic anticipated effects if the manufacturer has substantiation that the information is truthful and not misleading, as long as there are no claims of health benefits.

Other Considerations

It’s important to note that cannabis is considered a controlled substance under the federal Controlled Substances Act, and despite legalization in California, trafficking in cannabis, including the manufacture and sale of  edible cannabis products, remains illegal under federal law.  Possible negative consequences, including federal criminal prosecution and tax liability, still exist. Along with the requirements outlined here, there are other requirements under California law with regard to obtaining a manufacturing license, testing, advertising, distribution and sales of edible cannabis products. It’s a brave new world of legalized cannabis in California, but before jumping in, it is important to first seek legal advice and to proceed with caution.

Wendel Rosen’s Food and Beverage Practice Group provides a full range of services to producers, manufacturers, distributors, suppliers, growers, retailers and investors, as well as to the broader consumer packaged goods industry. Heading into 2018, we believe that food and beverage companies should keep the following considerations in mind:

1. Regulatory Oversight. It is still not clear what the Food and Drug Administration’s (FDA) focus will be with regard to its regulatory enforcement strategy under the Trump administration. While the FDA rolled back certain regulations to allow for greater time for industry compliance (ex. new Nutrition Facts Panel and restaurant nutritional disclosure regulations), the FDA will likely pay more attention to enforcing the Food Safety Modernization Act regulations. Therefore, a focus on your company’s compliance with food safety regulations is a must.
2. Changing Consumer Preferences. Staying on top of shifting consumer preferences is essential for relevant food and beverage companies. Healthy snacking options and increasing convenience in both food packaging and delivery are gaining significant traction in 2018. The lack of time for meal preparation continues to drive an increase in convenient foods, but consumer awareness also demands that such foods be nutritious and delicious alternatives to the home-cooked meal. While every trend may not apply to your business, prudent food and beverage companies should prioritize analyzing available market data to ensure they  understand the driving preferences behind consumer purchasing decisions.
3. Recalls. Recalls are time consuming and costly events. Since 2011, Class I and Class II recalls have steadily increased. Food and beverage companies should continually review their food safety programs to effectively educate and train employees, conduct internal audits, and improve their food safety/quality systems. In doing so, they will greatly reduce the risk of a voluntary market withdrawal or a mandated recall.
4. Social Media. The genie is out of the bottle, and food and beverage companies must have a strategy to retain control of their brand image in our increasingly digital world. Food and beverage companies should proactively develop strategies to effectively communicate about their products and manage user engagement to maintain a positive consumer expression about their brands.
5. Mergers and Acquisitions. Mergers and acquisitions will continue to serve as a growth strategy for companies looking to bring new, on trend products to the marketplace. Acquisitions of smaller companies who are leading market food and beverage trends can be done at a lower cost than spending the time and resources in experimenting with new products.
6. E-commerce. With Amazon’s acquisition of Whole Foods, e-commerce will continue to grow in 2018 as busy consumers will likely show increasing interest in quicker and/or home delivery.  Consumers will continue to integrate ordering from their mobile devices into their monthly routine of in-store shopping.  Food and beverage companies should look to find ways to expand their direct-to-consumer sales and/or third-party e-commerce platforms to increase their sales and market position.
7. Technology. Technological change will accelerate in our food systems from the way food is grown to the way it is purchased and delivered. At this year’s Fancy Food Show we saw how the supermarket of the future may look, as well as how technology can provide consumers with greater transparency and more complete information that they can use to inform their purchasing decisions. Food and beverage companies need to understand what such transparency could mean for their brands and how they can meaningfully communicate with consumers.
8. Disruption. From plant-based foods challenging “traditional” food concepts in the meat and dairy categories to hydroponic farmers challenging what foods can be certified organic, disruption continues to intensify. It is no longer enough to consider “how” something is done, but also “why” it is done. Entrepreneurs are emerging who are looking to explore the beneficial intersection of food science and technology to advance the sustainability and health of our global food supply. Food and beverage companies clinging to the status quo, beware.
9. Plant-based foods. The consumer diet is shifting to accommodate more plant-based foods. According to the market research firm Mintel, the preference for natural, simple and flexible diets will continue to drive an array of vegetarian, vegan and other plant-based food products.
10. Have fun!  While food safety and food quality are serious concerns of any responsible food and beverage company, don’t take yourself too seriously. The food and beverage industry still affords you meaningful consumer engagement opportunities, access to innovative technologies, and the venue to introduce exciting products that will be on supermarket shelves and in consumer pantries. Throw in the industry trade shows, networking opportunities, and professional growth opportunities and you quickly realize that the industry is FUN. (So, get out there and start enjoying it – we’re right here when you need us.)

Is it odd for a lawyer to write a blogpost about how to avoid lawyers?  Not at all. We hate to see claims of misrepresentation made against our clients by plaintiff’s class action attorneys. Typically, their claims have little merit and mean only wasted time, money and energy.

The goal of the class action attorneys is to extract the largest ransom with the least work. Anyone with a computer can generate rafts of “cut and paste” demand letters and complaints. They usually try to exploit vagueness in the law, often using professional plaintiffs who show up in scores of copycat lawsuits.

Enough diatribe! Your New Year’s resolution should be to stay away from class action attorneys in 2018. Here are some guidelines that will help you do that. We’ll have more posts on the subject as the year progresses.

Prop. 65: California Prop. 65 requires that you make disclosures on your labels if your product contains more than specified limits of identified chemicals. If you are selling in California, look at the list of chemicals on the Prop. 65 list. Now find a qualified lab that can test samples of your product runs for Prop. 65 chemicals and get the testing done. I can assure you that if your product category (chocolate – for example) is known for having trace elements of Prop. 65 chemicals, there are plaintiff’s lawyers who are testing your product. You should know the results of those tests before they do. If your product does have amounts of these chemicals that require Prop. 65 notices, it may be cheaper to put notices on your packages than it is to reformulate. It will certainly be cheaper than settling a class action claim for failure to include a Prop. 65 notice.

“Natural”: “Natural” is an accepted term to describe the marketplace. The largest industry event is “Natural Products Expo West.” The main retail publication is the “Natural Foods Merchandiser.” Food stores, whether independent or parts of a chain,  are referred to as “Natural Food Stores.” However, just because “natural” is used by the industry and the public to describe minimally processed foods does not mean it should have a home on your label. There’s no legal definition of “natural.” In 2015, in response to industry requests, the FDA asked for comment about whether “natural” should be defined and, if so, how. After receiving many comments, the FDA did nothing then. Last year, FDA Commissioner Dr. Scott Gottlieb said that the FDA is now looking at how to define “healthy” and “natural” more uniformly. “Natural” claims are one of the largest source of class action suits. Until “natural” has a clear legal definition and you are sure that your product meets it, don’t put the word on your label. It’s as simple as that.

“Healthy”: Is your product healthy? Of course it is. Would you be selling a food product that is unhealthy?  Of course not. Would you be advertising “Now, Even More Unhealthy In Convenient Family Pak?” Of course not. Unlike “natural,” the FDA does have a definition for “healthy.” However, the definition must be used carefully. It is out of date, contrary to current nutritional science and is under review. The FDA is reconsidering the definition and, last year, agreed that KIND bar could continue using “healthy” on its labels even though KIND bars exceeded the amount of fat allowed in the FDA definition. Our best advice is not to use the word “healthy” until there is a new definition. However, it you feel compelled to use it, find out if your product satisfies the requirements.

That’s it for now. I hope this New Year’s resolution comes true for you. See you at the Specialty Food Show or EXPO West.

On September 22, 2017, the U.S. Food & Drug Administration (“FDA”) issued a warning letter to Nashoba Brook Bakery for what it puts into its granola: love. The FDA was not impressed, coolly advising that “love” is not a common or usual name of an ingredient. Now, before you write the FDA off as a “hater,” let’s consider the role that food labels serve.

The primary role for food labels is to provide consumers meaningful information about a food so that they can understand what they are about to put into their bodies. Mandatory label statements include the name of the food, the amount of product in the package/container, the name and address of the manufacturer, packer or distributor, the ingredient list, nutrition labeling and any required allergy disclosure. To ensure that a consumer can readily understand a food’s attributes, the FDA requires that manufacturers always list the common or usual name for ingredients unless there is a regulation that provides for a different term.

The FDA’s strict stance on fastidious compliance with food labeling, though, should not be dismissed as an example of bureaucrats with no senses of humor. The FDA’s mission (one might even call it a passion) is to protect consumers’ health and safety. Even a cursory review of the warning letter to Nashoba Brook Bakery clearly reveals that listing “love” as an ingredient was just one of many other serious violations, including the failure to maintain the bakery in a sanitary condition.

In truth, with a better understanding of the regulations applicable to food labeling, love is not lost for Nashoba Brook Bakery. Food labels can, and often do, carry optional statements known as “romance copy.” (You didn’t see that coming, did you?)  Romance copy is comprised of the statements extolling the virtues of a product, or providing the backstory on the manufacturer. If there is any place on a label for an expression of love, that’s where this food attorney recommends food manufacturers make it. Put “Made with Love,” “Filled with Imagination,” “Packed with Magic,” or “Created with Passion” in the romance copy, just don’t list love, imagination, magic or passion as an ingredient.