The global pandemic has affected not only how individuals work but also the way
companies supply food, how consumers shop, and how regulators try to alleviate
food shortages during the pandemic. Here are some of the biggest developments
thus far.

During the pandemic, demand for food products in the retail sector has grown dramatically while use of food products destined for foodservice locations—such as hotels, universities, and restaurants—declined precipitously. Regulatory agencies have recognized the
challenges posed by the pandemic’s disruption of food supply channels and implemented temporary policies to support food businesses and consumers.

From agriculture to food processing and retail, much of the food sector and its workforce have been designated as essential during the pandemic. Food businesses are employers and have employment law obligations. Federal agencies, including the FDA and OSHA, have issued guidance to food businesses to develop and assess COVID-19 control plans to assist the industry in protecting employee health during the pandemic.

Promoting the safe and efficient production of food during the pandemic has been a priority for both businesses and regulators. Among other things, the FDA and USDA have issued temporary policies allowing: many foods not labeled for retail sale to nonetheless be sold
directly to consumers; minor product formulation changes to adapt to supply shocks; and temporary relaxation of mandatory menu labeling requirements for chain restaurants.

Food insecurity rates have significantly increased during the pandemic. The USDA has expanded the use of SNAP (food stamp) benefits for online grocery purchases, which is likely to lead to permanent changes in how shoppers use such benefits.

Regulators, businesses, and consumers are adjusting to the realities of the COVID-19 pandemic, and some of the changes implemented during this emergency period may lead to long-term shifts. Based in part on temporary policies during the crisis, the Consumer Brands Association has identified 10 policy areas ripe for change in a post-pandemic environment, such as expanding digital disclosure of product information and maintaining flexibility in food labeling to facilitate transfer of food products between the retail and foodservice channels.

On October 27, 2020, the New York State Department of Health issued proposed regulations regarding cannabinoid hemp products. These proposed regulations (available here) are open for public commentary until January 11, 2021. They would change how products containing hemp-derived cannabinoids, including cannabidiol (CBD), are manufactured and sold in New York State. While the industry continues to await federal guidance from the FDA, these proposed regulations offer a glimpse into what actions the federal government might take with regard to CBD. Read the full article on our sister blog Cannabis Legal Highlights: The 411 on 420.

Despite the COVID-19 pandemic and limitations on court operations, food litigation filings continue to exceed numbers seen in prior years.  As our Food Litigation colleagues wrote in Law360 (sub. req.), food litigation filings are anticipated to surpass 2019’s record numbers by nearly 20%, even though general commercial litigation filings across all industries have decreased significantly. Continue Reading PC Food Litigation Index: Q3 2020

A recent putative class action regarding edible cannabidiol (CBD) products reminds potential plaintiffs of the importance of pleading with particularity.

On behalf of a putative class of consumers, a purchaser alleged that Bhang Medicinal Chocolates contained a smaller quantity of CBD than the product advertised. Plaintiff asserted that he had independent lab testing to support this claim. On this basis, the purchaser alleged violations of California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”), and Consumer Legal Remedies Act (“CLRA”), and he also lodged claims of breach of express warranty, fraud, and negligent misrepresentation. Read the full article on our sister blog Cannabis Legal Highlights the 411 on 420.

A new rule from the U.S. Drug Enforcement Agency (DEA) has caused considerable concern within the cannabidiol (CBD) industry. The rule relates to the distinction made in the 2018 Farm Bill that removed certain cannabis products, such as industrial hemp and those containing hemp-derived CBD, with levels of THC not exceeding 0.3% by weight from the federal controlled substances list. THC is the psychoactive substances most associated with a marijuana “high.” DEA’s interim final rule appears straightforward at first glance: cannabis products containing more than 0.3% by weight are subject to DEA enforcement as controlled substances. The rule appears to mean, however, that THC levels can never exceed 0.3% at any point during the product’s manufacturing process, even if the final product offered for sale had THC at appropriate levels. Continue Reading New DEA Rule May Threaten CBD Manufacturing

On July 28, 2020, the U.S. Securities and Exchange Commission (SEC) accused six individuals and their companies with securities fraud in connection with two cannabis-related businesses in California that raised $25 million in an unregistered securities offering. The SEC’s complaint was filed in the Central District of California and seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties. Read the full article on our sister blog White Collar Briefly.

California’s Attorney General (AG) releases annual summaries of Proposition 65 settlements. This settlement data provides important insight into Proposition 65 litigation trends. Here are some of the most important takeaways from the 2018 data.

First, the average settlement amount was $42,424.52. According to the state AG’s report, there were 829 settlements in calendar year 2018. Many of these settlements also entailed injunctive relief, such as the addition of new labeling or reformulation of the products. Continue Reading Proposition 65 Settlements: Lessons from 2018 Data