I know this thread is super old, but SWIM just received a great email from the TTB (Alcohol & Tobacco Tax and Trade Bureau) regarding “drawback” on alcohol tax from hemp processing.
You have expressed interest in using alcohol to make extractions from hemp.
We must consider if your intended operation will be allowable under federal law.
For processes that require undenatured industrial alcohol, Industry Member’s producing a federally allowed product generally will purchase that alcohol taxpaid from an approved Distilled Spirits Plant and will need no TTB approval. As discussed in Title 27, Code of Federal Regulations, Part 17, if using an approved formula the Industry Member may file a claim with TTB to recover much of the tax that was paid on the purchased alcohol.
The 2018 Farm Bill amended the definition of marijuana under the Controlled Substances Act (CSA), 21 U.S.C. § 802(16), to exempt “hemp,” which is defined in section 10113 as follows:
“The term ‘hemp’ means 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.”
TTB understands this to mean that extracts containing CBD, as long as they do not contain more than 0.3% THC, have been exempted from the CSA. However, the law explicitly preserved FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the Food, Drug, and Cosmetic Act (FD&C Act). After enactment of the 2018 Farm Bill, FDA Commissioner Scott Gottlieb, M.D., issued a statement noting that it remains unlawful under section 301(ll) of the FD&C Act to introduce or deliver for introduction into interstate commerce any food to which CBD or THC has been added. FDA also updated its website to include FDA Regulation of Cannabis and Cannabis-Derived Products: Questions and Answers. Among other things, the updated Questions and Answers explicitly state that THC and CBD products may be sold neither as dietary supplements, nor in interstate commerce as food.
TTB Regulation 27 CFR 17.136, Compliance with Food and Drug Administration requirements, establishes that a product is not a medicine, medicinal preparation, food product, flavor, flavoring extract, or perfume (in other words, not an eligible nonbeverage product) if its formula would violate a ban or restriction of the FDA. Section 17.137 states that a formula may be disapproved for drawback either because it is fit for beverage purposes or because it is “neither a medicine, a medicinal preparation, a food product, a flavor, a flavoring extract, nor a perfume.”
TTB’s current view is that CBD oil is subject to such a ban or restriction by the FDA and TTB is not approving such products for drawback. You should contact FDA if you have questions regarding the regulatory status of your product. If you were able to provide a written determination from the U.S. Food and Drug Administration (FDA) indicating that the intended use of cannabidiol (CBD) is in compliance with the Federal Food, Drug, and Cosmetic Act, that could potentially affect our position on drawback.
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