Updates on SB 54: CalRecycle to Take a Second Stab at Implementing Regulations
On 7 March 2025, Gov. Gavin Newsom sent the Department of Resources Recycling and Recovery (CalRecycle) back to the drawing board on proposed regulations to implement the state’s Plastic Pollution Prevention and Packaging Producer Responsibility Act (SB 54). Senate Bill (“SB”) 54 is one of many state extended producer responsibility laws that seek to make product manufacturers responsible for the environmental burden associated with single-use packaging and similar materials. Newsom signed SB 54 into law in 2022, and CalRecycle has been working to implement the law since 2023.
SB 54 targets single-use plastic packaging and food service ware (Covered Materials) and has the lofty goals of achieving by 2032 making 100% of Covered Materials recyclable or compostable, reducing the use of Covered Materials by 25%, and actually recycling Covered Materials at a minimum of 65%.
SB 54 mandated CalRecycle to propose permanent regulations for SB 54 by 8 March 2025. The recently rejected proposed regulations were originally released for public comment in February 2024 and underwent two rounds of public comment. After two public comment periods, CalRecycle arrived at the proposed permanent regulations that Newsom declined to accept. Newsom declined to adopt CalRecycle’s proposed regulations due to the unacceptable burdens and costs the proposed regulations would have imposed on businesses. CalRecycle will have to convene another series of stakeholder meetings and develop new regulations, but CalRecycle’s timeline for proposing these new regulations is not yet clear.
In addition to monitoring the updated rulemaking process for California’s SB 54, our firm is keeping up with several other proposed and enacted state regulations impacting food packaging and food-contact material producers, including the following:
Expected release of CalRecycle’s final “material characterization study” required under SB 343 by 4 April 2025; the report will determine what materials are considered “recyclable” for purposes of “chasing arrows” symbols and SB 54.
Introduced 16 January 2025, Minnesota’s Senate File 188/House File 44 would require food-packaging manufacturers and brand owners to test for and report ortho-phthalates. If enacted, the law would take effect 1 July 2026.
On 20 February 2025, California introduced the Safer Food Packing Act of 2025 to regulate antimony trioxide, bisphenols, and ortho-phthalates in food packaging.
Introduced 3 February 2025, Illinois House Bill 2516 will prohibit the sale or distribution of any cookware and food packaging that contains potentially added per- and polyfluoroalkyl substances (PFAS). If passed, this regulation will take effect 1 January 2026.
Introduced 13 February 2025, Hawaii SB 683 will prohibit the sale or distribution of any cookware and food packaging that contains potentially added PFAS. If passed, this regulation will take effect 1 January 2028.
A Final Rule Bites the Dust: Federal Court Rules FDA Lacks Authority to Regulate LDTs
The order is in, and the LDT Final Rule is out.
In May 2024, the U.S. Food & Drug Administration (“FDA” or the “Agency”) published its Final Rule establishing its regulatory framework over laboratory developed tests (“LDTs”) as medical devices and, in effect, announced the end to decades of enforcement discretion by the Agency. The deadline to comply with the first phase of the Final Rule was set for May 6, 2025. On Monday, March 31, however, a federal judge in the U.S. Eastern District of Texas ordered that “FDA’s final rule exceeds its authority and is unlawful” and that “[t]herefore, consistent with controlling circuit precedent, the proper remedy is vacatur of the final rule and remand to FDA for further consideration in light of this opinion.”
Epstein Becker & Green’s Life Sciences Team is continuing to review and digest this order and its impact on the clinical lab industry, and we plan to release a more fulsome analysis in the coming days.
In the meantime, we draw stakeholders’ attention to a few key takeaways from the order—namely, the judge’s statement that (1) “the [federal Food, Drug, & Cosmetic Act]’s relevant text is unambiguous and cannot support FDA’s interpretation” and (2) “FDA’s asserted jurisdiction over laboratory-developed test services as ‘devices’ under the FDCA defies bedrock principles of statutory interpretation, common sense, and longstanding industry practice.”
These findings—along with other elements of the district court’s legal analysis—arguably leave little to no room for FDA to salvage its effort to regulate LDTs, absent either a successful appeal of the court’s order or congressional action.
FDA Can’t Stop, Won’t Stop – Navigating the New Administration [Podcast]
In this episode of Food & Chemicals Unpacked, we dive into the current adjustments experienced at the U.S. Food and Drug Administration (FDA) so far under the Trump administration. Keller and Heckman Partner George Misko joins us to discuss the future of food safety regulations, including the downsizing of HHS under Secretary Robert F. Kennedy Jr., potential changes to the GRAS process, and FDA’s ongoing post-market review program.
We Never Know How High We Are Until We Are Called to Rise: Protecting Alabama’s Medical Cannabis Program
There’s a great scene in the movie Wall Street when the up-and-coming Charlie Sheen (pre-Tiger Blood and now that I think about it maybe the precursor to the “winning!” mantra that seems to resonate today) is playing the role of Bud Fox, an eager trader looking to land a job with the biggest whale of them all, Gordon Gecko (played perhaps only as peak Michael Douglas could). Right before his one and only shot at impressing Gecko, Bud looks into the mirror, straightens his tie, fixes his hair, and says “life comes down to a few moments; this is one of them.”
At the risk of being slightly melodramatic, I’m reminded of that scene when I take stock of Alabama’s medical cannabis program as it sits at the intersection of a narrowing legislative window and a judicial proceeding on the brink of success (or failure).
A brief recap of where we stand at this moment. First, on the court side:
Earlier this month, the Alabama Court of Civil Appeals ruled that the Montgomery County Circuit Court lacked jurisdiction to hear the complaints of Alabama Always – an applicant for a medical cannabis license that has not been awarded a license during any of the three rounds of awards – because Alabama Always (and, presumably by extension, any other disappointed applicant for an integrated facility license) had not exhausted its administrative remedies before filing suit. As a result, the Alabama Court of Civil Appeals instructed the circuit court to lift the injunction prohibiting the AMCC from issuing integrated licenses.
And to the Legislature, we recently wrote:
As has become an annual tradition as the medical cannabis program has been in existence, there are a number of proposals currently pending in the Legislature that purport to fix what ails the program.
Sen. Tim Melson has introduced a substitute to Senate Bill 72. As a reminder, the original version of SB72 would have, in relevant part: (1) expanded the total number of integrated licenses from five to seven; (2) shifted the authority of issuing licenses from the AMCC to a consultant; and (3) shielded the decision from any judicial review. And, just as important, licenses wouldn’t be issued until well into 2026, assuming there was no litigation – an assumption I defy any serious person to tell me with a straight face is valid.
After unanimous public disapproval of the proposal, Sen. Melson introduced a substitute bill that would change the agencies tasked with appointing the consultant and would allow for the Alabama Court of Civil Appeals to review the award of licenses if the award was arbitrary or capricious or constituted a gross abuse of discretion. It would also move up the time to issue licenses, but it would still be in 2026, again assuming no lawsuits. While the substitute is a small step in the right direction and an acknowledgment of the flaws in the original bill, I still do not see it as the right path forward.
And here’s why: I reject that Alabama’s medical cannabis program requires a “legislative fix.” I believe that the original medical cannabis law, passed four years ago, isn’t broken.
In light of the Court of Civil Appeals’ decision, we may be mere months away from issuing licenses to dispensaries and integrated facilities.
Once a single dispensary license is issued, Alabama doctors can begin obtaining certifications to qualify patients for medical cannabis and Alabamians with qualifying conditions can begin to obtain medical cannabis cards. So, if you believe that the appellate court offers a path forward that may allow medical cannabis in 2025, why would you press for a bill that would ensure that it isn’t? Put simply, if it ain’t broke, don’t legislatively “fix” it.
Loyal readers of Budding Trends will recall that multiple proposals were voted out of the same committee last legislative session and did not become law. They will also recall that it took more than one legislative session to pass a medical cannabis law in the first place. Is past prologue or is this another example of reform taking time?
Sometimes the hardest course of correct action is inaction. I don’t blame anyone who looks around at Alabama’s medical cannabis landscape and thinks that something (anything) has to be done to fix what they see as a broken program. But I think they are wrong.
I believe that any efforts to engage in any sort of purported compromise legislation, no matter how well-intentioned those proposals may be, is doing a disservice to all applicants and the patients seeking access to medical cannabis in Alabama. The reasoning is simple: If both sides propose legislative changes, then both sides are at least implicitly agreeing that something needs to be done by the Legislature. I reject that premise. I think we are currently on the precipice of launching a medical cannabis program. The appellate courts appear unwilling to abide any further delays from the lower court, and investigative hearings should begin soon. That would allow for the possibility of all licenses being issued in 2025, when the so-called legislative fixes being proposed push us into 2026 at the earliest. Hold the line. Stay the course. And let’s get this program launched. Onward. Forward.
As always, thanks for stopping by.
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FDA’s New Transparency Tool Addresses Chemical Contaminants
Recently, the Food and Drug Administration (FDA) introduced a new online resource called the Chemical Contaminants Transparency Tool (CCT Tool) which allows the public to search for information about different chemical contaminants that may be found in human food. This online, searchable database provides a consolidated list of contaminant levels such as tolerances, action levels, and guidance levels used to evaluate potential health risks in human foods. This tool is part of the FDA’s efforts to modernize food chemical safety and has been launched as part of the administration’s Make America Healthy Again initiative.
Key Features and Objectives of the Transparency Tool
Prior to launch of the CCT tool, tolerances, action levels, guidance levels, derived intervention levels, recommended maximum levels, and advisory levels were to be found (or defined) in 21 C.F.R. parts 109 and 509, and also in guidances for industry. The CCT Tool consolidates this information into one resource, with the goal of making it easier to find information about the contaminants by commodity type.
Here is a snapshot of some data available through the tool:
The levels above show the safety limits for contaminants in food, but do not imply that the presence of these chemical at the specified level is necessarily permissible. FDA’s prior guidances on these chemicals remains an important resource to understand the levels shown in the chart. As explained by acting FDA Commissioner Sara Brenner, M.D., M.P.H., “While it’s ideal to have no contaminants in our food, they can sometimes occur. Eating a variety of nutrient-rich foods from all major groups – vegetables, fruits, grains, dairy, and protein – can help minimize exposure.”
The introduction of the CCT Tool is a useful reminder of the importance of compliance for food manufacturers and distributors. It also highlights the new administration’s focus on transparency for and within the food system, and could be a harbinger of new tools that FDA may develop as part of the new administration’s goals.
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FDA Announces “Operation Stork Speed”
On March 18, 2025, FDA announced that, at the direction of Health and Human Services Secretary Robert F. Kennedy Jr., it is “taking steps to enhance its efforts to ensure the ongoing quality, safety and nutritional adequacy” of infant formula products as part of a broader review of the U.S. food supply, in what is being referred to as “Operation Stork Speed.”
Key measures include:
Nutrient Review: FDA will soon issue a Request for Information to begin a comprehensive review of infant formula nutrients.
Increased Testing: There will be increased testing for heavy metals and other contaminants in infant formula and other foods consumed by children.
Encouraging Innovation: FDA is urging companies to develop new infant formulas and improve transparency in labeling to better inform consumers and will collaborate with the National Institutes of Health on researching the long-term health outcomes associated with formula feeding of infants.
The announcement comes as part of a broader effort to stabilize the supply of infant formula following severe shortages in 2022. FDA has since implemented a national strategy to increase the resilience of the U.S. infant formula market, including measures to prevent future shortages and improve the integrity of the supply chain. Operation Stork Speed builds on these efforts, aiming to ensure that families have access to safe and nutritious formula for their infants.
New Guidelines Establishing the Requirements and Procedures That Must Be Observed to Obtain Permission to Advertise Prepackaged Food and Non-Alcoholic Beverages
Following our newsletter dated March 31, 2020 “The new Mexican Official Standard for the labelling of pre-packaged food and non-alcoholic beverages” and other newsletters regarding labelling of products, after five years of the publication of this Mexican Official Standard, on March 11, 2025, the Guidelines regarding advertising of prepackaged food and non-alcoholic beverages were published in the Official Gazette and entered into force on March 12, 2025.
These Guidelines appear to now restrict the advertising of these types of products, imposing advertisers, advertising agencies and media, the obligation to obtain a permit/approval for advertising the products on open television, restricted television, movie theaters, internet and other digital platforms.
Any product is subject to approval by the Federal Comision Against Sanitary Risks (COFEPRIS) when their label includes one or more warning seals of the front labeling system.
The main restrictions, among others, are the following:
It is forbidden to use animated characters, pets or interactive games directed at children to promote the consumption of the products.
To compare the products with natural ones.
To compare with similar products regarding their composition or nutritional contents.
To suggest physical or intellectual abilities from its consumption.
To promote excessive consumption of the product.
To suggest that the products may modify body proportions.
The requirements for obtaining the permit/approval to advertise the products are to fill in a format, pay government fees and attach the “operation notice” (authorization) of the product.
Once submitted the application, COFEPRIS has a term of 20 working days to approve the advertisement and/or 10 days to issue a requirement. Applicant has a term of 5 days to reply or else, the approval will be dismissed.
Although, we consider all these requirements to be an unnecessary burden to the industry, this Guidelines provide definitions of terms such as, “pets”, “celebrities”, “children’s characters”, “digital downloads”, “cartoons” and “indirect advertising”, that were missing in the Mexican Official Standard for the labelling of pre-packaged food and non-alcoholic beverages.
APHIS Evaluates Petitions Reviewed under 2012 Process, Will Use Process Consistent with USDA Biotechnology Regulations Going Forward
The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) announced on March 27, 2025, that it will no longer use the process it outlined in 2012 for reviewing petitions seeking a determination that a modified plant should not be subject to the regulations for the introduction of organisms altered or produced through genetic engineering (modified organisms) that are plant pests or that there is reason to believe are plant pests. On March 6, 2012, APHIS announced that it would publish two separate Federal Register notices for petitions for which it prepares an environmental assessment. 77 Fed. Reg. 13258. The first notice would announce the availability of the petition, and the second notice would announce the availability of APHIS’ decision-making documents, providing two opportunities for public comment. According to APHIS’ March 2025 announcement, at the time, APHIS anticipated that enabling earlier public engagement on the petition would help scope the subsequent analyses, including whether the petition raised substantive new issues. After evaluating the 34 petitions reviewed under the 2012 process, APHIS states that it “found that the first comment period has not yielded comments that significantly impacted the scoping for APHIS’ evaluation.” Given this experience, APHIS will institute the following process consistent with USDA’s biotechnology regulations:
Once APHIS deems a petition to be complete, it will publish a Federal Register notice that will begin a 60-day comment period on the petition and APHIS’ draft evaluation documents; and
After the comment period closes, APHIS will review the comments and any other relevant information it receives during the comment period, complete its evaluation documents, and make a final determination. APHIS will either approve or deny the petition and publish a Federal Register notice announcing the regulatory status of the modified plant and the availability of the regulatory determination and final supporting documents.
HHS Job Cuts: FDA, CDC, NIH and CMS Impacted Amidst Significant Restructurings
On March 27, 2025, the United States Department of Health and Human Services (HHS) announced a “dramatic restructuring” that will result in a reduction in agency workforce combined with significant internal restructuring.1 The department plans to cut approximately 20,000 positions, bringing its headcount in line with HHS’s pre-2002 level of around 62,000 employees. The anticipated restructuring involves consolidating 28 divisions into 15, citing prior budget and staffing increases of 38 percent and 17 percent, respectively.2
In connection with this restructuring, the Administration announced the following changes:
Creation of the Administration for a Healthy America (AHA), which will consolidate the Office of the Assistant Secretary for Health (OASH), the Health Resources and Services Administration (HRSA), the Substance Abuse and Mental Health Services Administration (SAMHSA), the Agency for Toxic Substances and Disease Registry (ATSDR) and the National Institute for Occupational Safety and Health (NIOSH);
Transfer of the Administration for Strategic Preparedness and Response (ASPR) to the Centers for Disease Control (CDC);
Creation of a new Assistant Secretary for Enforcement to oversee the Departmental Appeals Board (DAB), Office of Medicare Hearings and Appeals (OMHA) and Office for Civil Rights (OCR);
Merging the Assistant Secretary for Planning and Evaluation (ASPE) with the Agency for Healthcare Research and Quality (AHRQ) to create a new Office of Strategy to provide research enhancing HHS’s various initiatives;
Reorganizing the Administration for Community Living (ACL) programs that support older adults and people of all ages with disabilities into other parts of HHS; and
10 HHS Regional Offices will be consolidated into 5.3
These cuts and restructurings follow the February 11, 2025, Executive Order which placed much of the federal government’s human resource management under the purview of the Department of Government Efficiency (DOGE)4 and the February 12, 2025 termination of “Fork in the Road,” a deferred resignation program for government employees.5 This latest announcement adds to the growing number of federal staff reductions—62,000 jobs were cut across 17 different agencies in February alone.6 With HHS’s designation of a new Assistant Secretary of Enforcement to combat purported fraud, waste and abuse across its divisions, more job cuts could be on the horizon.
As a result of this latest announcement, the anticipated amount of job cuts and resulting reduced employee pools are as follows: the U.S. Food and Drug Administration (FDA) will cut 3,500 employees (about 20 percent of its workforce); the Centers for Disease Control and Prevention (CDC) will cut 2,400 employees; the Centers for Medicare and Medicaid Services (CMS) will cut 300 employees; and the National Institutes of Health (NIH) will cut 1,200 employees. These cuts, along with another 2,600 employees slated for dismissal, amount to a total of 10,000 HHS jobs cut. These cuts, combined with another 10,000 employees who have left the agency due to buyouts or other voluntary resignations, add up to the 20,000 total employee reduction.7
Potential Impacts
The sweeping job cuts, department re-organization and consolidation are in line with Secretary Kennedy’s vision of “doing more with less” resources, while a former HHS employee anonymously expressed concerns that “the cuts will weigh heavily on caseworkers and account management teams,” ultimately leading to a declination in “[s]ervice standards for Medicare Advantage beneficiaries,” due to both “a reduction in the people that handle their cases” and “diminished oversight of the Medicare Advantage plans.”8
Healthcare providers and other organizations that rely on regular interaction with HHS and its subagencies should be on the lookout for disruptions or delays in service as HHS implements these cuts and departmental reorganizations. For example, several senior FDA drug reviewers have already announced their resignations, and more are expected, raising the distinct possibility that the FDA’s ability to perform its public health functions will be impaired.9 The full impact of the March 27th announcements will not be known for some time, but potentially impacted stakeholders should keep a watchful eye over the coming months as HHS implements the announced changes.
[1] U.S. Dep’t of Health and Human Servs., HHS Announces Transformation to Make America Healthy Again (Mar. 27, 2025), https://www.hhs.gov/about/news/hhs-restructuring-doge.html.
[2] U.S. Dep’t of Health and Human Servs., Fact Sheet: HHS’ Transformation to Make America Healthy Again (Mar. 27, 2025), https://www.hhs.gov/about/news/hhs-restructuring-doge-fact-sheet.html.
[3] Id.
[4] Exec. Order No. 14,210, 90 Fed. Reg. 9669 (Feb. 14, 2025); see also Exec. Off. of the President, Implementing The President’s “Department of Government Efficiency” Workforce Optimization Initiative (Feb. 11, 2025), https://www.whitehouse.gov/presidential-actions/2025/02/implementing-the-presidents-department-of-government-efficiency-workforce-optimization-initiative/.
[5] U.S. Off. of Pers. Mgmt., Fork in the Road: Program Closed, https://www.opm.gov/fork/ (last visited Mar. 27, 2025).
[6] Janet Nguyen, Federal workers’ salaries represent less than 5% of federal spending and 1% of GDP, Marketplace (Mar. 6, 2025), https://www.marketplace.org/2025/03/06/federal-workers-salaries-represent-less-than-5-of-federal-spending-and-1-of-gdp/.
[7] Phil Taylor, HHS plans 10,000 more job cuts, taking target to 20,000, pharmaphorum (Mar. 27, 2025), https://pharmaphorum.com/news/hhs-plans-10000-more-job-cuts-taking-target-20000.
[8] Meg Tirrell et al., HHS cuts 10,000 employees in major overhaul of health agencies, CNN (Mar. 27, 2025, 6:46 PM), https://www.cnn.com/2025/03/27/health/hhs-rfk-job-cuts/index.html.
[9] See @steveusdin1, X (Mar. 27, 2025, 4:54 PM), https://x.com/steveusdin1/status/1905377827836624915.
Nebraska Considers Sales Tax on Candy and Soft Drinks
Earlier this year lawmakers in Nebraska proposed a bill (LB170) which would end the state’s sales tax exemption for soda and candy. Currently, all food and beverages except prepared foods and vending machine items are exempt from the sales tax.
The proposed bill defines candy as a “preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces” but excludes “any preparation that contains flour or that requires refrigeration” to avoid discouraging consumption of healthier snacks like granola and protein bars. (See Deep Dive: Nebraska Legislature committee to discuss ‘Sugar Tax’). Soft drinks are defined as “nonalcoholic beverages that contain natural or artificial sweeteners” but excludes “beverages that contain milk or milk products, soy, rice, or similar milk substitutes or that contain greater than fifty percent of vegetable or fruit juice by volume.”
The bill is intended to reduce the state’s budget deficit. It is opposed by affected industry including the Nebraska Beverage Association.
Illinois Moving Forward with BVO Ban
Illinois is moving forward with the Illinois Food Safety Act to ban brominated vegetable oil (BVO), potassium bromate, propylparaben, and Red No. 3, despite FDA’s BVO ban that went into effect in July 2024 with a one-year compliance period. We previously blogged about Illinois’ bill and the FDA revocation of BVO.
According to Illinois Secretary of State Alexi Giannoulias, FDA’s ban left enforcement gaps, including lingering sales of BVO-containing products. The Illinois bill would ensure that “families aren’t stuck with unsafe leftovers while the feds catch up.” The Illinois ban is intended to enforce the BVO ban at the retail level and “tackle additional chemicals, potentially setting a precedent for stricter state oversight.”
Illinois is not the only state pushing for stricter food additive bans. California banned four additives in 2023, and other states including New York and New Jersey have proposed similar laws. According to the Environmental Working Group, states are “tired of waiting” for FDA to review additives and are “forcing the FDA’s hand.” However, states could face lawsuits claiming federal preemption for the banned chemicals.
FDA Announces a “Chemical Contaminants Transparency Tool” to Evaluate Potential Health Risks of Contaminants in Human Foods.
On March 20, 2025, the Food and Drug Administration (FDA) announced the availability of a Chemical Contaminants Transparency Tool, a database intended to provide users with a list of contaminant levels in the food supply.
Contaminant levels, such as tolerances, action levels, and guidance levels, are used by FDA to evaluate potential health risks in food. If contaminant levels exceed the permissible threshold, FDA will deem the food to be unsafe.
The database compiles existing information from several sources, including compliance policy guides, guidance for industry, and the Code of Federal Regulations, into a single reference. Information includes the contaminant’s name, commodity, contaminant level type, level value, and its reference source. There are currently 301 records available on the database.
According to the news release, under the direction of Secretary Kennedy, the Chemical Contaminants Transparency Tool is one new initiative intended to modernize chemical safety. The intention behind the database is to offer the American public “informed consent about what they are eating.”