As of Monday, cannabis stocks were mostly low, thanks to the reports from the first-ever hearing on CBD conducted by the U.S Food and Drug Administration. The hearing was conducted throughout Friday and involved researchers, advocates, manufacturers, health professionals, and opponents. The reports are pushing investors to rethink about making money through the CBD industry.
With the 2018 Farm Bill officially legalizing hemp, there was a surge of CBD-based products sold in stores as well as online, but without any regulatory supervision. Popular opinion dictates that CBD has wellness properties, including pain, anxiety and inflammation treatment, but since CBD is considered a drug, instead of being included in the federal ban removal, it was placed under FDA’s regulatory substances. The reason being GW Pharma’s Epidiolex, a treatment for some forms of epilepsy, which contains CBD as the key ingredient, and is the only cannabis-infused drug that got FDA approval.
FDA and the Food Industry
The FDA added that CBD cannot be used in food, drinks or dietary supplements, but since the public opinion supports the use of CBD in wellness treatments, it will provide pathways that ensure CBD regulation. According to Evercore ISI analysts, the hearing showed how CBD products were used without clear evidence of benefits, standardization and safety profiles. The hearing also highlighted the instability of the cannabis industry. Although there were inconsistent claims made during the discussion, it was favorable for GW Pharma. The FDA mentioned that it wants the substance to undergo continuous clinical research. An analyst mentioned that now that CBD products are spreading like wildfire, it could become difficult for the FDA to regulate and monitor the CBD industry without adequate resources.
A speaker during the discussion pointed out that there is an increasingly strong demand for products containing CBD, as more than 65 million Americans have tried them, and 63% showed satisfaction with the results. Americans are more concerned about the pricing of these products than safety. Furthermore, the World Health Organization published a report that found CBD to be non-psychoactive and safe for use; however they did acknowledge the need for further research.
Other speakers in the hearing emphasized the importance of quality assurance and safety profiles, as products currently in the market may contain substandard or incorrect amounts of CBD as well as THC, it’s the intoxicating counterpart. These products may also contain harmful bacteria and pesticides. In the coming year, more clarity can be expected from the FDA according to the analysts.
Gov. J.B Pritzker actively worked for the legalization of adult recreational cannabis, allowing Illinois to become the 11th state to legalize cannabis. A bill was passed on Friday, which is expected to be signed by Pritzker soon. Sales may start sometime within January 2020. Analyst Aaron Grey from Alliance Global Partners said that the state achieved hemp legalization via legislative means, which may pave pathways for other states such as New York, Connecticut, New Jersey, New Hampshire, and Maine, to not go through the ballot process. If Illinois sales go well, it could create a massive impact on the cannabis industry. According to Grey, sales could reach more than $2.9 billion within five years. This could push other states to create similar bills and achieve success like Illinois.
Analysts note that 29% of the population now lives in states where adult recreational cannabis is legal, while 70% of the population resides in states offering legal medical cannabis. The disparity between federal and state laws can be seen through these murky regulations placed upon cannabis products and has caused widespread arrests and raids, shocking the general public. Only time can tell whether the situation favors the cannabis industry
Kamala Harris Jokes About CBD to Make a Serious Point on Cannabis Reform
Senator Kamala Harris (D-CA) joked about how entrepreneurs are promoting cannabidiol or CBD lotion be rubbed on the skin as a cure-all at the same time that people of color struggle to enter the cannabis industry due to being targeted by the nation’s war on drugs.
Harris firmly pointed out social equity as a need in the growing marijuana industry.
Stance on cannabis
When she was still a prosecutor, Harris opposed reform efforts on the cannabis market. As a 2020 presidential candidate for the Democrats, she now recognizes the necessity of legislation that fully legalizes it. She said in her Cosmopolitan interview that those under prohibition enforcement should be allowed participation in the burgeoning market.
Harris stated that America’s mass incarceration system is a source of shame and is the reason for the incarceration, in particular, of brown and black men due to the failure of the war on drugs. She said that this is why she supports the legalization of marijuana and wants an equitable market when it happens.
However, Harris also talked about the cannabis industry, and how CBD is poised as a miracle remedy that can cure every problem by simply rubbing it all over the body. She noted how sellers are making a lot of money selling weed, calling the industry a massive cash cow.
She went on to mention brown and black men who are tagged as felons by selling the same. She called it unfair and wrong and a travesty.
A reform plan for marijuana
Harris further laid out her reform plans for the cannabis market, citing previously incarcerated folks who were convicted of a felony be considered for expungement. She also plans to prioritize them should they want to return to selling cannabis. She added that they should be first in line if marijuana legalization will be realized.
The candidate has sponsored a Senate bill that moves to de-schedule cannabis federally and offers reinvestments and expungements for people and communities affected by the drug war.
However, Harris received criticism for being previously opposed to the marijuana reform. In a skit last September, Saturday Night Live featured the US’ “cool aunt” who gives out weed but later on arrests those who were holding the substance in their possession.
Representative Tulsi Gabbard (D-HI) also slammed Harris during a Democratic debate for being instrumental to the incarceration of low-level cannabis felons during her stint as a prosecutor.
Another presidential candidate, Senator Cory Booker (D-NJ), scrutinized Harris, for taking a swipe at her being a past user of cannabis.
Cannabis sativa L., the source plant species for marijuana and hemp variety, is where cannabidiol or CBD is extracted from. This active component is said to have therapeutic benefits and is marketed as an infusion to many products, including skincare, makeup, pet items, and more. There is a serious lack of studies and clinical trials to support the claims, but users patronize CBD due to its alleged effectiveness.
NYS CBD Regulation in Limbo as People Wait for Governor’s Signature
The United States Department of Agriculture (USDA) finally released its regulations on CBD to give more explicit federal guidelines on hemp cultivation that produces CBD.
In New York, however, lines are still blurry as the bill approved by the State Legislature that aims to regulate CBD across the state is yet to be enacted upon by Gov. Andrew Cuomo.
Wild West in CBD Market
Jen Metzger, the Senate bill sponsor, expressed her hope that the NY Governor will sign the bill soon. She sponsored the proposed legislation to regulate cannabidiol, a compound derived from the hemp plant variety of Cannabis sativa L.
It’s the same source plant as marijuana, which has high amounts of tetrahydrocannabinol or THC, the chemical responsible for the psychoactive effects of the illegal substance.
According to Metzger, who is Hudson Valley Democrat, it’s the Wild West in the CBD market since there is no regulation of the said product.
The bill proposes routine testing for CBD products sold across New York and observance of proper labeling to prevent confusion and misunderstanding about the product’s ingredients and additives. It also includes guidelines for New York farmers regarding hemp cultivation and profit share.
Risks of unregulated CBD
CBD is currently in a legal gray area. The 2018 Farm Bill essentially legalized hemp-derived CBD with less than 0.3% of THC content and is also federally allowed for sale.
However, CBD-containing beverages and food are still illegal for the market. The New York City Health Department stopped restaurants and eateries in the state from selling CBD edibles and drinks since consumables with CBD have not yet been approved as a safe food additive.
Recently, a mysterious THC-related illness affected thousands across the country and claimed dozens of lives due to the use of a particular vape product. Metzger stated that CBD is not a common vaping ingredient. She relayed her concerns about the lack of regulation causing more illnesses since products may bear unfounded claims in the packaging.
Metzger pointed out that worrying about CBD might be necessary due to a lack of quality standards.
CBD is commonly used to relieve stress and help in insomnia and anxiety. It has more claimed therapeutic benefits, and the FDA has approved a CBD-containing drug used to treat seizure disorders in children.
Calls for more CBD studies
Metzger encourages more research on cannabidiol and its alleged effects, whether positive or negative.
Metzger and co-legislator Donna Lupardo presented the measure during a 2019 legislative session as soon as they realized that the comprehensive bill being worked on was not winning an approval. This bill was supposedly for the legalization of adult recreational marijuana use.
Metzger and Lupardo are the chairperson of their respective agricultural committees.
Gov. Cuomo has allied with three neighboring states to work on a comprehensive bill about vaping and cannabis use, which could be up for voting in 2020. However, Metzger said a concrete CBD regulation on or before the year ends still necessary.
Chuck Schumer Calls for FDA to Hasten CBD Rules Issuance
Chuck Schumer (D-NY), Senate minority leader, speaks about his request to the Food and Drug Administration or FDA to expedite the issuance of guidelines regarding hemp-derived CBD and its lawful marketing.
Schumer made a statement during a press call last Wednesday to call for regulatory clarity that is currently hampering the growth of the cannabidiol industry. He also mentioned the federal legalization of hemp and hemp-derived products in the 2018 Farm Bill.
However, the FDA is yet to publish official rules that allow sellers to market their products. In New York, most hemp cultivators also produce cannabidiol, according to Schumer.
Appealing to the FDA
Schumer cited a letter that he and colleagues in the Senate addressed to Ned Sharpless, an FDA acting commissioner. They collectively asked to show the agency’s outline regarding its plans for an official CBD regulatory framework and the timeline of finalization and implementation of enforcement policies concerning the substance. The group asked for an answer within 90 days.
According to Schumer, the CBD industry is a potential billion-dollar market in New York, which could bring in countless jobs and improved the economy along with its rise. However, he also stated that for these to be realized, critical players in the industry, such as the farmers, producers, consumers, and sellers should have a strict set of rules to follow.
He called on the FDA to perform its duty promptly and issue the guidance on CBD and its classification, quality, marketing, labeling, and sales.
Schumer believes that the FDA regulations on CBD are critical in the development of the industry and to protect consumers by setting stringent quality control benchmarks.
FDA stance on CBD
The FDA has expressed its awareness of the Congress’ request for CBD regulation amid the legalization of hemp. However, the agency points out that there are specific regulatory challenges they are still working to overcome.
The Cannabidiol or CBD-containing product that FDA recognizes is the approved Epidiolex medication. It is a prescription drug used to treat intractable epilepsy. CBD edibles, on the other hand, are yet to be FDA-approved and may need alternative pathways for regulation.
Scott Gottlieb, a former FDA commissioner, stated in an interview that the federal government should include themselves in state marijuana program regulation. He suggested that congressional involvement may be needed to make CBD marketing lawful if they want to hasten the process of developing rules.
It’s not only Schumer that reached out to the FDA. Mitch McConnell (R-KY), Senate majority leader, called on the FDA to release guidelines on enforcement discretion so producers, manufacturers, and owners in the CBD industry can do business without worrying about being penalized. McConnel led the inclusion of hemp legalization in the said agriculture legislation.
FDA stated that they are particular about CBD companies that make baseless claims about the therapeutic properties of CBD, which the agency considers to be highly inappropriate. The FDA, along with the Federal Trade Commission, issued a warning notice to a particular CBD business that violated the standard.
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