CBD is Booming, But Industry Players Face Legal and Efficacy Challenges


Attempting to restrict Americans from using cannabidiol (CBD) is a “fool’s game,” according to U.S. Food and Drug Administration (FDA) commissioner Stephen Hahn. 

“People are using these products. We’re not going to be able to say ‘you can’t use these products’,” he conceded during a speech at last week’s National Association of State Departments of Agriculture Winter Policy conference.

During his address, Hahn admitted that CBD might have “some medicinal value,” but said the FDA needs to “fill the information gaps” so consumers understand the associated risks of taking the non-psychoactive ingredient derived from cannabis.

“We need to understand what it helps with,” he said, adding that the agency is still working to “formulate” it’s official stance on CBD.

CBD advocates say that it helps with everything from anxiety to joint pain, but the efficaciousness of those claims is still unclear.

Nevertheless, a barrage of CBD products promising to help alleviate stress, improve sleep and even treat depression have hit the market following the passage of the 2018 Farm Bill, which removed hemp -- now defined as cannabis sativa plants containing less than 0.3 percent THC -- from the legal definition of marijuana. 

As a result, hundreds of companies aiming to capture a slice of a still-emerging category -- one that is defined by a murky regulatory framework and an immature body of scientific evidence -- have cropped up, infusing everything from beverages to bath bombs with CBD.

According to Alva Mather, a lawyer at McDermott Will and Emory who specializes in cannabis regulation, hemp-derived CBD is no longer a controlled substance but the 2018 Farm Bill “did not change the authority of the FDA to regulate these products under the Federal Drug and Cosmetics Act.”

So far, the FDA has only approved the use of CBD in the prescription drug Epidiolex – used to treat a rare form of epileptic seizures – and in cosmetics approved under the Federal Drug and Cosmetics Act.

"CBD cannot be included in food and beverage products; it cannot be advertised as a dietary supplement; it cannot be marketed and sold as a drug,” Mather said.

But these legal restrictions are not slowing the growth of the CBD market. According to Arcview Market Research and BDS Analytics, CBD sales in the U.S. are projected to top $20 billion by 2024.

The decriminalization of hemp alongside a lack of FDA approval has created what Mather referred to as an "open black market."

For its part, the FDA "recognizes the potential opportunities that cannabis or cannabis-derived compounds may offer and acknowledges the significant interest in these possibilities.”

However, the FDA is also aware that “some companies are marketing products containing cannabis and cannabis-derived compounds in ways that violate the Federal Food, Drug and Cosmetic Act (FD&C Act) and that may put the health and safety of consumers at risk."

Additional challenges for CBD companies come from a host of state-specific laws around CBD.

For instance, "California agrees with the FDA and will not allow CBD to be lawfully included in food and beverage products," said Mather. "But states like Colorado have made the opposite decision, allowing CBD to be included…but only if it meets state regulations."

Many in the CBD space understand that making or marketing products in a way that violates the Federal Food, Drug and Cosmetic Act is illegal. But there are still several CBD companies violating these laws, many of which have never faced the consequences for unlawful actions.

The FDA has done little other than “issue warning letters to companies that are selling products with health claims," said Mather.

Perhaps more problematic for CBD companies than the FDA is the influx of class action suits over labeling claims, a process that can be both timely and expensive for producers.

Amid the uncertain and unstable regulatory environment, CBD companies across the supply chain continue to operate, determined to establish a legitimate and organized industry. 

Growers like Calico Hemp, which has farms in both Colorado and California, continue to develop partnerships with companies hungry for CBD oil.

Calico Hemp CEO Ben Delanghe is a lawyer who worked in cannabis before focusing on CBD. He believes it's up to the FDA and other federal and state bodies to make a uniform model that addresses regulatory concerns while also protecting consumers.

But until that happens, Delanghe explained that he "will keep pushing internally to create what we think should be the gold standard…and hopefully, that aligns with the regulations that come our way."

Meanwhile, CBD product manufacturers like Medpharm continue to push ahead, overcoming legal and scientific hurdles.

Medpharm produces several CBD products, including Aliviar, one of the best-selling CBD tinctures in the U.S. The company makes no health-related claims on any of its CBD products and follows a strict process to verify ingredient content and guarantee the accuracy of labeling.

"There are multiple tests we conduct to ensure that each product has a consistent amount of cannabinoids, terpenes or other excipients," said Medpharm CEO Albert Gutierrez. "We use in house analytical equipment to verify ingredients and send our products to a third party for verification."

Like most companies that produce CBD products, Medpharm believes that CBD can help people with a host of physical and emotional conditions.

"While the research is limited -- and we intend to fix that -- we believe [CBD] can have quite an impact on things like anxiety, inflammation, pain management, and sleep," Gutierrez said. "More concrete evidence points to much bigger issues like epilepsy, chronic pain, dementia, and Parkinson's."

Medpharm's R&D process includes studying anecdotal reports and scientific articles that give strong evidence linking CBD to the treatment of specific conditions or disease states, explained Gutierrez. Medpharm also looks to research in places like Israel with a longer history of CBD testing and research.

Product manufacturers are not alone in what can be viewed as hopeful uncertainty in terms of CBD and it's medicinal benefits.

"There is a healthy amount of skepticism, especially as there is a lack of traditional clinical research about [CBD]," said Stacia Woodcock, director of education at the International Research Center on Cannabis and Health

Woodcock sees "great value in CBD as a therapeutic agent," but only if the patient has been "properly evaluated."

Epidiolex is still the only proven use for CBD with FDA approval. Nevertheless, Woodcock stated that preclinical studies had shown promise for inflammation and pain and as an anti-anxiety and anti-psychotic treatment.

For consumers looking to explore CBD products, the medical community suggests proceeding with caution.

"If a product is making claims on a label, I wouldn't use that brand," said Jessie Gill, an RN and board member of the American Cannabis Nurses Association. Additionally, Gill recommended that consumers must be sure that "a third-party lab is testing their CBD products."

CBD industry stakeholders are in agreement on major issues facing the industry. They see the potential for CBD but acknowledge the industry's lagging regulatory framework and lack of scientific evidence. Unfortunately, this puts the onus for responsible usage on the CBD consumer.

"The market surge has outpaced the ability of the government and medical community to ensure the safety of the patients purchasing it," Woodcock said.

So who should step up and regulate the CBD market?

"We need federal oversight," Gill said. "The individual state-specific laws surrounding hemp are extremely challenging for clinicians, consumers, and the industry in general."

Last month, the FDA said it was seeing a “significant increase” in the amount of CBD products hitting the market with claims to “treat serious or life-threatening diseases.” The agency requested $5 million as part of its 2021 budget to continue regulating and studying CBD, noting that funding would help it develop policy and “continue to perform its existing regulatory responsibilities including review of product applications, inspections, enforcement, and targeted research.”

Tags: Hemp, CBD

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