The cannabidiol industry is set towards an impressive expansion. According to a research firm forecast, CBD sales could reach $20B by 2024, almost tenfold from 2018’s sales of $1.8B. It could be attributed to upward trends in the industry, and as well as the great reception to CBD being a safe option compared to marijuana due to its low tetrahydrocannabinol (THC) content. THC is the substance responsible for the high in weed.
However, the Food and Drug Administration (FDA) has issued a warning recently that stated how some CBD-based products could cause serious health problems. This statement might affect one of the leading CBD companies in the US, Charlotte’s Web Holdings.
CBD may not always be healthy
In a consumer update published by the FDA regarding CBD product use, the agency stressed that cannabidiol might be the cause for various health issues such as liver injury, change in mood, and alertness. CBD used with other depressants and alcohol may also cause drowsiness. The FDA added that the said side effects could happen even without the user noticing.
The agency also reiterated that the alleged therapeutic benefits of cannabidiol are mostly unproven, despite several sellers highlighting their products as having several health benefits such as anti-cancer and pain-relieving properties.
The FDA also reminded the public that there is still a lack of data as CBD’s effects on the body in the long term. It is something consumers should ponder about according to the agency.
Is Charlotte’s Web Affected?
Charlotte’s Web is one of the most well-known US-based cannabidiol companies in the country and abroad. It sells a variety of CBD-containing products such as capsules and oil. It claims the biggest US market share in the CBD industry, with its products selling at nearly 10,000 stores nationwide. Its strong retail presence aids in the expansion of the company’s market share. Can the FDA warning affect their numbers?
Most likely not, and Charlotte’s Web can still maintain its top market position. The FDA has sent out warning letters to companies selling CBD products with false promotional claims, but Charlotte’s Web was not included. In a conference call of Charlotte’s Web CEO Deanie Elsner regarding their third-quarter earnings, he specified that the company fully supports the FDA’s stance on unfounded claims and are working with their business partners to maintain the effort.
Elsner also mentioned that while the FDA has little issuance on regulations, Charlotte’s Web is ready to adapt as soon as new directives from the agency are released. He said that the company is currently progressing on its expansion plan, getting its infrastructure and capacity to catch up with its growth.
The company is rooting for the FDA to set a clear regulatory framework, especially for dietary supplements. Charlotte’s Web is positive that its product portfolio and distribution channels will expand as soon as it happens.
The CBD industry looks to persist despite the warnings, and the supply of products will unlikely dwindle. Charlotte’s Web and its growth will remain unaffected. For investors, it might be wise to keep in mind that the CBD legal landscape is still an unfinished course, so evaluating whether a company is worth purchasing shares from is important.