The Modernization of Cosmetics Regulation Act of 2022 (better known as MOCRA), it’s the first time cosmetic rules have been updated by Congress through the Federal Food, Drug, & Cosmetics Act since it was passed in 1938. Other aspects of the law have been updated many times over as we’ve seen evolutions of technology, science, product safety, and responsible resourcing advocacy. Still, none of those expressly addressed makeup laws until MOCRA.

Prior to these changes, makeup companies didn’t legally have to test their products or the individual ingredients to ensure safety. Businesses didn’t have to register their production facilities with the FDA, abide by good manufacturing practice rules, or notify the government when there are adverse reactions (even life-threatening ones). Additionally, the FDA didn’t have the power to recall cosmetic products – even those that could be deadly. MOCRA rectifies all this and grants the FDA authority to oversee regulation of makeup products. (Small businesses may be exempt from certain requirements, depending on the specific circumstances.)

Cosmetics are defined not just as makeup, but those products intended for application to human bodies for cleaning, beautifying, altering appearance, or promoting attractiveness. Any product that promises to treat or prevent a condition or disease or alters some bodily function is classified as a “drug” by the FDA. It’s worth noting that CBD products can fall into both categories, but we’re specifically here just talking about CBD-infused cosmetics – though many do promise anti-inflammatory properties. These can include products like:

• Lip balm and lip gloss
• Moisturizers
• Under eye serums
• Hair creams
• Scalp oil
• Skin cleansers
• Face masks
• Deodorant
• Mouthwash
• Concealer/color corrector
• Mascara

What Does This Mean for CBD Cosmetics Companies?

Companies that produce makeup or other cosmetic products with CBD (hemp-derived) or other cannabinoids are now bound by MOCRA requirements with respect to the following practices:

• Product listing.
• Product registration.
• Facility registration.
• Good manufacturing practices.
• Record-keeping.
• Product recalls.
• Safety substantiation.
• Adverse event reporting to the government.

While states might have their own laws pertaining to cosmetics, MOCRA supersedes those.

It’s worth noting that federal prohibition on cannabis could make complying with certain provisions tricky. For example, if CBD cosmetic products are sourced from a larger cannabis producer, those facilities might not be able to be registered with the FDA due to marijuana’s ongoing classification as a Schedule I narcotic. That said, states are free to pass their own requirements for product and facility listing that align with MOCRA. We suggest companies consult with an attorney to ensure they are in compliance with the law.

As our Los Angeles CBD lawyers can explain, manufacturing CBD cosmetic products may ultimately be more expensive because they’ll have to acquire and maintain proof of their safety and ingredients. On the other hand, the ability to bolster consumer confidence in product safety is important for just about every product maker – particularly those in newer markets like CBD cosmetics. Beyond that, a “substantiated cosmetic use” for CBD products could go a long way in reducing the odds the FDA will object to these products – and possibly even reduce the risk of product liability litigation. It establishes a legitimate, legal reason for CBD to be included in makeup and cosmetic products.

Certain provisions of MOCRA don’t go into effect until the end of next year, and we expect there will be some state-level rules developed in the meantime.

If you have questions about how to make sure your production, record-keeping, registration, reporting, and sales of CBD products are aligned with state and federal rules, contact an experienced cannabis business lawyer for insight.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Modernization of Cosmetics Regulation Act of 2022, March 27, 2023, U.S. Food & Drug Administration

But what will it mean for the CBD side of things when/if marijuana products of all (or at least higher) THC levels becomes legal? Specifically, we’re talking about legalization of recreational marijuana. Here in California, as well as in 17 other states, Washington, D.C. and Guam, that’s already the reality. Yet CBD businesses continue not only to operate, but to thrive.

Our CBD business lawyers recognize the retail landscape may inevitably shift once recreational marijuana becomes legal, but we also believe in the strong likelihood the two can co-exist. Not everyone wants high-THC products – specifically in the realm of pet products, beauty topicals, and cosmetics. Plus, there are a fair number of people who aren’t heavy users of THC, but may still want to indulge occasionally in a way that is safe.

Recent analysis reveal that the legal recreational marijuana market dwarfs the CBD market – $50 billion to $8 billion. Still, neither sector’s size is anything to sneeze at.

In shops that sell high-THC cannabis products, CBD product sales have fallen in recent years (at least so far as California goes). But it’s our theory that when adult use recreational marijuana becomes legal, there will be an increase in sales for both – particularly in mature markets.

The question is how the merge will occur: Will we be more likely to see low-THC products in marijuana stores primarily selling high-THC products – or visa versa. Even if high-THC retailers are the ones to thrive, it’s likely to be CBD retailers who excel in digital sales.

Beyond this: What will be the role of any dispensary when/if marijuana becomes legal at the federal level? Would anyone go to a dispensary if they could purchase quality CBD or cannabis at a gas station? It’s true that cannabis-specific retailing is hyper-centralized as a result of regulation, but our thinking is that there would still be a need for CBD and cannabis dispensaries – just as sales of alcohol have continued at liquor stores and wineries.

Cannabis companies of all stripes may want to start thinking of ways to protect their future by investing in brand development. This approach would include:

• Diversifying product offerings.
• Carving a name for yourself in the customer service sphere.
• Providing valuable education to new and existing customers.
• Offer a premium quality product.

Think about it like pizza. It’s easy enough to make, and you can find a pizza joint in virtually any city in America – not to mention in the grocer’s freezer section. But quality pizza? Wood-fired pizza? Premium ingredients? An Italian dining experience? These are all things that people seek out – and it’s how some restaurants have managed to differentiate themselves, even in crowded markets. You build up your brand value, brand loyalty, and brand base. This is true for both CBD and high-THC retailers.

Every step of the way, it will be crucial for companies to consider the legality of their branding, their business practices, and their growth. Our dedicated Los Angeles CBD lawyers are here to help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

As more states legalize marijuana, CBD retailers face an identity crisis, April 29, 2022, By Kristen Nichols, Hemp Editor, Marijuana Business Daily

As our Los Angeles CBD business attorneys can explain, the key points in the emergency action are as follows:

• Hemp product manufacturers will be granted different types of registrations, licenses, and/or authorizations from the CDPH, depending on the type of product they make. Those that make many different types of hemp/CBD products may need numerous registrations.
• Out-of-state hemp/CBD manufacturers that want to import products to California will need to register with the CDPH.
• “Enrollment and oversight authorization” is required at each location, lasts one year, and cannot be transferred.
• Applicants requesting oversight authorization must provide detained information about not only the type of product, but its sources, extract methods, etc. These must be signed under penalty of perjury.
• Fees are based on gross revenue accrued in the 12 months prior. New applicants will need to estimate their fees, and the formulas for calculating them are a bit complex. The fee structures for CBD product types and extract manufacturers are different.

These are just the primary points of the emergency action. It’s imperative that anyone in the CBD business or hemp business in California consult with their business attorney to make sure all registration, oversight, and licensure paperwork is properly drafted and timely submitted.

We expect that there will soon be more in-depth regulatory guidelines issued for things like advertising and marketing, as well as consumer sales. But the promising takeaway for CBD manufacturers – despite coming four years after the passage of the 2018 Farm Bill – we finally have some movement on this front in California.

In addition to establishing a registration requirement for manufacturers of hemp products, AB-45 requires independent laboratory testing of hemp extracts in its final raw form, to ensure it doesn’t exceed the maximum allowable amount of THC, as well as to make sure the product is uncontaminated. Further, hemp products that are food, beverages, or dietary supplements will require:

• Labels with a scannable barcode, website URL, or QR code linking that will provide analysis certificates showing each batch’s THC content.
• Expiration and best-by dates.
• Statements stipulating that children and pregnant/breastfeeding people should avoid using the product without talking to a doctor.
• A statement saying the product should be kept out of children’s reach.
• Statement indicating the FDA hasn’t evaluated the product for either safety or efficacy.

The emergency action by the CDPH is currently awaiting a 30-day public comment period. Any CBD or hemp product maker should be reaching out to their legal department/contracted attorney to discuss the appropriate next steps to ensure their operations are properly aligned with the law.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

DPH-22-002E Industrial Hemp Fee, April 25, 2022, California Department of Public Health

Los Angeles CBD shop attorneys understand that while these little stores are outnumbered by the full-service cannabis dispensaries in the city hundreds-to-one, these store owners say they were drawn to the business primarily for the health benefits and variety of products (salves, tinctures, creams, edibles, soft gels, tinctures and more), but also for the reduced legal risk and ease in securing insurance and funding. One in L.A., for instance, sells only hemp-made CBD oil expressly for this purpose Shops that sell only CBD aren’t required to have the pricey licensing, as is required by legal cannabis dispensaries in California.

Such stores have also opened in Missouri, Texas, Kansas, Arkansas, North Carolina, Minnesota, Louisiana, Florida, Georgia, Mississippi and Ohio. What the Farm Bill, signed in December by the president, did was remove hemp from the list of controlled substances, allowing states to freely allow permanent cultivation programs, and farmers can be eligible for crop insurance and grants.

There are only trace amounts of TCH in CBD, and it’s even proven effective for some people with epilepsy, cancer, chronic pain and PTSD. The U.S. is also well-known to be the No. 1 importer of hemp products globally. Costs on those items may fall. Our L.A. CBD business attorneys expect these new stores may now start growing like weeds, particularly where access to the drug may be limited to medicinal use.

Meanwhile, some companies have taken to selling these CBD oil products online, particularly in states where cannabis is not legal. However, with no testing regulations in place for CBD products, though the U.S. Food and Drug Administration has issued warnings with regard to making false claims on the medicinal properties, potency and effectiveness of the product they are selling. So long as the the CBD oil is hemp-derived, it is likely to be legal per the provisions of the 2014 Farm Bill and the updated version in 2018, but it’s a good idea to speak with an L.A. CBD shop attorney before launching your online venture – particularly if you plan on shipping out-of-state sales.

Having worked in California’s medicinal and legal cannabis from the start, we have seen the expansion of CBD oil from high-quality medicine to essentially a social commodity. Many companies are rushing to invest their dollars in various sectors industry-wide. Knowing exactly what you are diving into – and ensuring you are following all legal guidelines and required administrative processes. You don’t want to be ensnared in a battle with local or state government officials because paperwork wasn’t properly filed before a hard opening. We can help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

CBD-Only Stores Start Popping Up Like Weeds, Sept. 7, 2018, By Joanne Cachapero, MGretailer.com

More Blog Entries:

First Church of Cannabis Lawsuit: Marijuana “Rites” of Faith Falter in Court, Jan. 6, 2018, Los Angeles CBD Business Attorney Blog