Complying with Current Good Manufacturing Practices (CGMP) for Dietary Supplements is required for any nutritional supplements that are prepared, packed or stored by a manufacturer or distributor. This is about producing safe products that are consistently manufactured, tested and labeled for sale and the procedure and record-keeping for making that happen. If there is ever a product recall, regulatory agencies need to be able to trace and detect problems so they can be addressed. This is done by reviewing a manufacturer’s production procedures and actual batch production records and samples. Some of the requirements for Complying with Current Good Manufacturing Practices (CGMP)are described below and can be a checklist of things your business needs to do if you are preparing and selling CDB ingestibles or bitters.
For each unique formulation, you need a specification and procedure for its batch production. This is an exact recipe/formula that is used each and every time to ensure consistency batch to batch.
There must be a master manufacturing record with specifications for each point or stage in the manufacturing process where control is necessary to ensure quality of the end product. It needs to be documented that the product was produced in a controlled environment (clean room). Two people should sign off at each step being performed that the step was completed in accordance with written procedures. The written procedures must provide detailed instructions, precautions to be followed, and what to do to investigate an issue or remediate a problem.
Each component used must have a procedure for identifying it and ensuring its purity, strength and composition. This needs to be tamper-proof. There needs to be minimum standards for quality/contamination that are adequate to ensure the efficacy and quality of the final end product. If you rely on the certificate of analysis coming from the supplier, you need to independently verify it and do periodic random testing to qualify the supplier. (This is generally done by sending it to a testing lab to analyze and send you a report. 3 times are necessary for a supplier that does its own testing to verify and qualify it as reliable. If the supplier does not do its own testing, you will need to test every batch purchased.) If your herbalists can pass test proving they can reliably identify raw herbs accurately by taste/smell/sight, they can substitute for laboratory tests to identify what the component is.) However, that would not suffice for testing its purity and to guaranty the plants did not contain bacteria or heavy metals. Lab tests would be needed for that. You also need a written procedure for being sure a certificate is present with each supply delivery, it is reviewed, and it is stored and recorded in your system for each supply delivery. You also need a written procedure for how each supply is quarantined (not contaminated), stored and labeled at your facility. You need to keep a representative sample of each shipment and record it in your system.
If water is an ingredient or used for filtering, it needs to be tested and records maintained of the water source and how it meets water quality standards.
There must be quality control testing during the manufacturing process for each component. Is it being stored and used under conditions (cleanliness, temperature, light, humidity, etc.) that uphold its integrity and efficacy? How do you ensure it is not being contaminated? For example, you need a written procedure for:
Grinding herbs or powders to finer consistency
Blending herbal powders
Mixing herbal liquid blends
Pressing herbs during liquid extraction
There must be specifications for product packaging materials and quality control testing during the packaging process for each component. Are all products, labels and containers being stored and used under conditions (cleanliness, light, temperature, humidity, etc.) that uphold its integrity and ensure the product is not contaminated? How do you ensure it is not being contaminated? How do you ensure how much is being placed in each package? How do you ensure what is being placed in each package? How do you audit and test?
There must be specifications for product packaging and shipping. Are containers damaged? Seals broken? Labels incorrect or missing? Is there the right amount of product in each shipment? Is it being stored and used under conditions (cleanliness, temperature, light, humidity, etc.) that uphold its integrity and ensure the product is not contaminated? How do you ensure what packages are being placed in each shipment? How do you audit and test?
There must be a procedure for validating the packaging and labelling complies with the laws and regulations. How do you do that? Do you have a checklist you use? Do you outsource the review? What records do you retain as proof it was done? How do you control the label access and use? How do you ensure that the right label is used on each batch? Do you ensure each label for each batch is recorded and a sample of the label is retained?
You need an extraction control sheet worksheet for each batch that contains:
Equipment used and processing lines used
Date & time of all maintenance, cleaning and sanitization of the equipment and processing lines or a cross-reference to separate records with this information
Date & time & employee for all testing for in-process quality control or a cross-reference to separate records with this information
Date & time & employee for all testing for final product quality control or a cross-reference to separate records with this information
Date & time & details for all reprocessing or a cross-reference to separate records with this information
Batch numbering (unique identifier for each batch) or a cross-reference to separate records with this information
Sample label used on the batch or a cross-reference to location and separate records with this information
Sample of each batch or a cross-reference to location of such samples
Representative samples must be maintained under good organization and storage conditions. They must be maintained for one year past shelf-life/expiration date or 2 years past distribution of last batch associated with the sample.
You need written quality control procedures and how the testing will be recorded. It also needs to state what happens in the case of a failed inspection. These can include analysis for color, residue, transparency/clarity and other observations to ensure quality).
You need written laboratory procedures that detail the methodology and equipment used, as well as the record keeping of each analysis.
You need written procedures for handling product complaints and how the person reviewing them is qualified.
You need written procedures for calibrating measuring equipment and how the person performing the calibration is trained and qualified. Results must be recorded with date, time and employee.
You need written procedures for inspecting electronic, automatic and mechanical equipment and how the person performing the inspection is trained and qualified. Results must be recorded with date, time and employee.
You need written procedures for cleaning, sanitizing and maintaining equipment, tools, utensils and surfaces and how the person performing the task is trained and qualified. Each time must be recorded with date, time and employee.
You need written procedures for handling product return and what happens to the returned product.
You need written procedures for qualifying and training employees for each task they are assigned to perform.
You need written procedures for documenting and reporting “serious adverse events” to the FDA.
You should have data supporting any expiration dates listed on product packaging.
You need written procedures for handling product recalls.
You need records to detail where every batch was supplied/distributed and how to contact the buyer in the event of a product recall.
This list is not meant to be exhaustive, but it does include the most important requirements for complying with good manufacturing practices as required by the FDA. Contact our team if you need assistance with regulatory compliance issues for your CBD manufacturing business.
There are two exemptions that tend to apply. The first requires no filing, just that your records document you qualify if inspected. That exemption is for businesses selling less than $50,000 annually of foods or dietary supplements or less than $500,000 in total gross sales annually.
The second requires an annual registration of your qualification, which can be done on-line at the FDA website.This exemption applies to businesses with less than 100 full-time equivalent employees or those businesses producing less than 100,000 units of the product for sale annually.
Statements like those below on nutritional supplement labels and websites have received FDA regulatory enforcement for being unapproved new drugs because the nutritional supplements were sold as therapeutic agents intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease of the human body. The FDA is especially concerned about products offered to treat conditions not amendable to self-diagnosis by individuals who are not medical practitioners. In the eyes of the FDA, instructions for use by a layperson would not be adequate for self-diagnosis and such nutritional supplements will be deemed “misbranded drugs.” While it supposed to be okay to say things like “good for digestive health” as long as you don’t say things like “cures stomach cancer,” the actual disciplinary records show that the FDA tends to cite for almost any health claim. See actual examples below:
May be beneficial for [health conditions or ailments]
May be beneficial in improving conditions of [health conditions or ailments]
Providing safe and significant antimicrobial action
Strengthens immune system
For assistance with harmful bacteria
Stimulates production of white blood cells
Aids in digestion
May be effective for alleviating depression
Great for people who have [health conditions or ailments]
Helps with discomfort from [health conditions or ailments]
It can assist those who suffer from [health conditions or ailments]
Modern science affirms that ….
Studies have demonstrated the effectiveness of….
It is a powerful antimicrobial or antiparasitic agent
Boosts immunity against colds and flu
Beneficial for a wide range of conditions related to pain and inflammation such as menstrual cramps
Used to relieve temporary aches and pains
Quicker healing from minor sprains, strains…
Importance of [herb or mineral] is….
Disorders treated with [herb or mineral]
All natural formula that works to relieve insomnia and anxiety
All natural formula that works to relieve hayfever, allergies ad sinus problems
What does an employer do when an employee reports that he or she was being shoved at work by another employee and that it is a recurring situation that has been going on for a while? The question raised by the facts described is whether it would be deemed workplace bullying, something that does not subject the employer to liability for illegal actions, or whether the situation has risen to a situation of harassment and hostile work environment. It is important that the situation be addressed and records be created to demonstrate the employer’s efforts to address the complaint and prevent further incidents.
Harassment is unwelcome conduct that is based on race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. Harassment becomes unlawful where 1) enduring the offensive conduct becomes a condition of continued employment, or 2) the conduct is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive. Anti-discrimination laws also prohibit harassment against individuals in retaliation for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or lawsuit under these laws; or opposing employment practices that they reasonably believe discriminate against individuals, in violation of these laws.
Cases of hostile work environments are extremely subjective and fact-specific, and complicated by the fact that evidence is pretty much a “he said-she said” situation. Thus, the case is proven through the sum of the circumstances. The courts consider all aspects of the situation, including the frequency and severity of the allegedly hostile behavior and the overall situation. In most cases for a hostile work environment to be illegal, the actions that create the hostility are pervasive and long-lasting and not limited to one or two remarks or acts. In extreme situations, severity outranks longevity and one single event is enough to create a hostile environment. A court will use objectivity to measure pervasiveness by asking: Would any ordinary employee in similar circumstances find that this behavior creates a hostile work environment?
The employer is automatically liable for harassment if it knew, or should have known about the harassment and failed to take prompt and appropriate corrective action. Liability arises in the context of a labor law claim or unemployment insurance liability. Liability for the harassment results from a negative employment action such as termination, failure to promote or hire, and loss of wages. If the harassment results in a hostile work environment, the employer can avoid liability only if it can prove that: 1) it reasonably tried to prevent and promptly correct the harassing behavior; and 2) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer. However, it can also arise where an employee quits because of the situation.
This is the recommended course of action for the employer:
Advise the offending employee about her actions and create a disciplinary record of the incident.
Do a full and complete investigation of the incident and the alleged pervasive behavior by the offending employee.
Develop a written employee policy or code of conduct about no tolerance for this type of behavior and a procedure for handling such complaints. Distribute the policy to all employees and have them sign that they received it.
Hold an employee meeting to discuss the policy, the change in workplace culture and your procedures for handling complaints like this. Employees should be given the opportunity to report any issues they’re having with other colleagues, and they should feel confident that their complaint will be taken seriously.
Train managers, supervisors, and HR professionals to handle the complaint, investigate and to enforce the no tolerance policy.
These situations can leave employers exposed to significant risk. There are many consultants and attorneys experienced in employment and labor law. It is generally a good idea to discuss the situation with an experienced professional to mitigate liability and costs.
Tara Leo wrote an interesting article for the Craft Brewing Business blog entitled “Here’s a quick overview on the process of extracting cannabis to infuse in beer.” (It was published on April 17, 2019.) It answered some common questions about the process for making a quality beer with cannabis. I’ll summarize some of it here, but I encourage you to read the article.
Currently, there are 3 components in cannabis that are being infused into beer. Each has a different purpose. THC is infused for its psychoactive effect. (However, this is not legal in most places.) CBD is infused for its medicinal benefits, primarily its “chill effect.” Terpenes are infused for their flavor profile. Terpenes give cannabis/hemp its unique flavor. Whichever component is used, they must extracted using professional processes that satisfy regulatory standards for food and beverage manufacturing. To be clear, simply tossing some buds into the brewing process won’t do the trick. You need to extract the components, usually cannabidiol oils from hemp. For concentrates, a closed-loop extraction system must be used. The two most popular extraction methods are butane hash oil and supercritical CO2 extraction. It may be best to purchase your supply from a quality manufacturer of CBD extracts and oils.
There is an art and science as to when to add CBD during the brewing process. And as you might imagine, not all artisans and researchers agree on what is optimum. One school of thought is to add it to the wort while it is boiling. This is not only effective for production but also can reduce the flavors and aromas of the CBD in the final product. CBD has a distinct earthy flavor that not all people will want in their beer. However, if the CBD flavors are a desirable quality, CBD oil or tinctures can be added to cooled wort or even to the fermented beer right before bottling. The best part is that there is an opportunity for innovation and experimentation.
Currently CBD is illegal as an additive to food and beverages. I am a realist and know this isn’t stopping everyone from doing it anyway, especially given the desire to cash in on the hot trends. If you are taking some risks, it might be a good idea to discuss them with your attorney and understand if there are things you can do to mitigate the risks and the “worst that can happen” if you are the subject of regulatory compliance proceedings.
The United States Patent and Trademark Office (USPTO) refuses to register marks for goods and/or services that show a clear violation of federal law, regardless of the legality of the activities under state law. Since cannabis is still a Schedule I listed drug (controlled substance), any use of terms related to cannabis in connection with the use of cannabis or any of its extracts by humans, especially for ingestion, cannot as a matter of law be legal. Thus, until cannabis is removed from the controlled drug schedule, brand owners will not be able to seek federal protection of these marks.
However, on May 2, 2019, the U.S. Trademark Office issued examination guidelines providing a way that certain hemp products, and products made with CBD derived from hemp, can be registered. Under the 2018 Farm Act, the definition for hemp removed it from the controlled substances law, making it legal to grow and use. As long as the trademark application makes it clear that the goods and services are not controlled substances, the mark may be registrable. When filing a trademark application, the identification of goods and services must specify that they are derived from hemp and contain less than 0.3% THC on a dry-weight basis. However, marks used on goods and services for foods, beverages, pet treats or dietary supplements containing CBD or cannabis still remain unprotectible. Trademarks for topicals containing CBD appear to be protectable. If you have a pending trademark application for products using CBD, a new trademark guideline issued May 2, 2019 may provide a path for registration of your mark. You may request to amend the filing date of your application to December 20, 2018.
For applications that recite services involving the cultivation or production of hemp with less than 0.03% THC, the examining attorney will inquire about the applicant’s authorization to produce hemp. Applicants will be required to provide additional statements for the record to confirm that their activities are legal and under license or authorization by a state, territory, or tribal government in accordance with a plan approved by the U.S. Department of Agriculture (USDA) for the commercial production of hemp.
Insider secret: If your brand is used with food, beverages, nutritional supplements or pet treats, protect your brand with respect to legal products and services (apparel, consulting, website) until cannabis is removed from the controlled substances law. This is a good “plan B” and can be the basis for unfair trade practices, common law trademark, desceptive advertising, and other cause of action if a competitor usurps your brand.
Consulting an experienced trademark attorney can help you evaluate the data and make informed decisions before adopting your new business name or brand. Undertaking this due diligence can avoid liability for trademark infringement and needless costs for rebranding. With all of the money you are investing in launching a new business, it is a good use of your resources to lay a solid foundation for your business and the name it could have for decades.
Patents on illegal goods and services are not precluded from patent protection in the same way that federal trademarks are unavailable. Patents simply do not face this restriction and are not by their very nature beyond the reach of goods or services that are federally restricted. In fact, did you know that the federal government applied for and obtained a cannabis-related patent? The USPTO issued US Patent No. 6,630,507, which claims methods of treating diseases comprising administering cannabinoids. That certainly lends credibility to the value of these new cannabis technologies and the potential business opportunities.
In order for an idea to be patented, the idea must be new, non-obvious, sufficiently articulated by the inventor, and provide a certain threshold of utility to society. Patent law prohibits patent protection for naturally existing products under 35 U.S.C. §101. That make sense. If something already existing in nature, the inventor did not invent anything new. Sure, he or she discovered it, but we can’t award him or her a monopoly on something that existed in nature. However, we can award a patent for a novel use or application of the plant and its components such as methods of treating or ameliorating diseases or symptoms of disease (e.g., epilepsy or chronic pain) or compositions (e.g., topical creams or smoking products). We can also award a patent for novel ways of processing the naturally existing plant to derive component parts that can be included in other products such as methods of selecting cannabis strains or extraction and processing improvements. We can even award a patent for novel devices and apparatus used in the cultivation, processing, dispensing and using of cannabis and CBD (e.g., vaporizers or, nebulizers). We can even patent new cannabis strains or modified cannabis. Plant patents “may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant.” “Asexually propagated plants” are defined by the USPTO as “those that are reproduced by means other than from seeds, such as by the rooting of cuttings, by layering, budding, grafting, inarching, etc.
Living subject matter is patentable if it undergoes a sufficient amount of genetic altering and engineering.
Multiple types of patent protection for a single product are also available. For example, design patents may be obtained to protect the ornamental features of a new and non- obvious design for bottles, delivery devices, or packaging.
If you are a cannapreneur with innovations in the cannabusiness section, contact our patent team to discuss whether patents can be strategically leveraged for your business. This is big business and there are opportunities everywhere. Opportunity is knocking at your door? Will you answer?
The U.S. Department of Labor on Friday issued an update bulletin that rescinded prior guidance known as the “80/20 rule.” However, this won’t apply to New York employers because state labor laws are still in effect and still have enacted the 80/20 rule. New York’s hospitality wage order has an 80/20 rule that is even stricter than former federal Labor Department standard, forbidding employers from using the tip credit for an entire shift if a worker performs non-tipped tasks more than 20 percent of the time.
On the federal level and in some states, there is no longer a specific ratio for tipped employees who spent a portion of their working hours on non-tipped duties — like setting tables, rolling silverware or prepping salads. It is now clear that tipped workers can be paid the subminimum wage for that time if performed contemporaneously with direct customer-service duties or for a reasonable time immediately before or after performing such direct-service duties. The handbook update said Department of Labor’s Wage and Hour Division “will no longer prohibit an employer from taking a tip credit based on the amount of time an employee spends performing duties related to a tip-producing occupation.”
While states have different laws on labor and wage issues, so do large cities like New York City. This can make it complicated for businesses with multiple locations that may be subject to varying rules.
Employers who are unsure of applicable labor laws to their business can benefit from professional guidance from trade groups, labor department bulletins and employment lawyers. This should be reviewed on an annual basis as well. Politicians change the rules often and each new administration brings new interpretations and policies to their enforcement agenda.
Restaurants and bars in NYC may not discriminate on the basis of natural hairstyles or hairstyles associated with Black people. Employers will not be allowed to maintain policies that punish or prohibit employees or customer from wearing natural hairstyles (ie. cornrows, twists, braids, locs, Bantu knots, fades, etc.) or mandate that employees alter their hair through straightening, relaxing, or other manipulation to conform to grooming standards. Employers can still require the use of legitimate sanitary or safety hair solutions such as ties or hairnets, as long as the same rules are applied across hairstyles, not only for natural hair styles.
Cases of discrimination will be reported to the Commission on Human Rights, via 311, and will be investigated and prosecuted by the Commission in accordance with NYC Human Rights Law.
Businesses that have liquor licenses are often charged with having a disorderly premises. In cases involving violence, a disorderly premises charge can lead to a summary suspension and eventual revocation of the license. These can be very difficult cases to fight because the State Liquor Authority’s burden of proof is very low. A 2018 case, In the Matter of Last Train Stop, Inc. v. New York Liquor Authority, 161 A.D.3d 867 (2018), explains what must be proven, and the burden of proof in these cases.
The State Liquor Authority does not have to prove that the licensee knowingly suffered or permitted disorderly conduct. It merely has to show that there was noise, disturbance, misconduct or disorder on the premises as adequate to that is related to its business operations, or conduct of its patrons, that affects the local inhabitants. And in making that showing, its standard of proof is “substantial evidence” and means that a given inference of the Authority is reasonable and plausible, not necessarily the most probable. The relevant proof must merely be sufficient for a reasonable mind to accept what the Authority concludes. That burden is much, much less than the standards that apply in other courts and cases such as a preponderance of the evidence, overwhelming evidence or beyond a reasonable doubt.
If you find yourself on the wrong end of a disorderly premises violation, you would benefit from professional guidance in resolving the matter to avoid potential loss of your valuable liquor license asset.