CBD (cannabidiol) has emerged from the shadows of its more popular and “troublemaker” older brother THC (tetrahydrocannabinol). One of at least 113 cannabinoids identified in cannabis, CBD is non-hallucinogenic and said to be carrying significant health benefits. However, until recently it was relegated, along with all other cannabinoids and cannabis, to the penalty box as a Schedule 1 drug. This classification, shared by players such as heroin, cocaine, and methamphetamines, make significant investment and research by public companies into the health benefits of CBD all but impossible. And without funding for clinical studies into the health benefits, commercial opportunities will be fragmented and well below the industry projections; Brightfield Group estimates that CBD could be a $22 Billion business by 2022.
CBD’s coming out party was fueled by the passing of the Farm Bill in the U.S. in late 2018. This bipartisan legislation moved hemp – the cannabis plant containing less than 0.3% THC – from Schedule 1 (a harmful & illegal drug) to Schedule 5 (an agricultural product). There have also been positive rumblings coming out of the World Health Organization (WHO) that would help shift the regulatory landscape across the globe. However, the Food & Drug Administration (FDA) still maintains the authority to regulate cannabis and cannabis-derived products in the U.S. and is, in theory, the last hurdle to universal availability of CBD in drugstores, grocery stores, or any place you might find a natural health product.
As of April 2019, the FDA announced that it would start public hearings and will form an internal agency group to explore potential pathways for products containing CBD to be marketed. At the same time, they reminded the industry of their concerns, and their authority, issuing warning letters to three companies in response to their making unsubstantiated claims relating to dozens of CBD products.
So, is CBD in a regulatory holding pattern? It doesn’t look that way in the marketplace. CBD-infused products, in many formats, are readily available at most national U.S. food & drug store chains, in addition to the independent health food stores that have been stocking CBD-based products for awhile now. With the allure of this high margin and newsworthy category, we are likely to see national retailers continue to jump into the fray, despite the warnings from the FDA about selling “unapproved” products.
It’s my belief that the FDA will turn a blind eye to CBD-based products, especially at the national retailers, as long as the manufacturers do not make unsubstantiated therapeutic claims. Egregious, over-the-line claims will continue to raise the ire of the FDA. The products listed at places like CVS, Walgreens and Wegman’s will likely not carry any firm health claims – and they may not need them. CBD is in the news every day and social media is full of anecdotal stories touting the benefits of this new “wonder drug.”
The CBD “horse” may have already left the barn, and the FDA may have a difficult time closing the barn door.