The impact of FDA regulation on CBD

Currently, inquiring into the regulatory status of CBD (Cannabidiol) compounds in supplements, food and beauty products in the UK will be met with limitations.

However, looking around at the sheer amount of CBD-infused products on the shelves, it would appear that companies have taken a green-light approach.

FDA Regulation

While the regulatory status of CBD in the UK remains unclear, the FDA in the US is currently seeking comments about how it can regulate the growing industry.

Cannabis and cannabidiol testing is necessary and vital in protecting consumer welfare and remaining clear on the potential effects on health, whether positive or negative. However, it also undoubtedly increases the cost of cannabis products which has effects on both the industry and consumers.

The Washington-based National Cannabis Industry Association (NCIA) has responded to the FDA seeking comments about CBD products.

“During this initial phase of cannabis implementation and development, increased costs could push price-conscious consumers back into the illicit market,” it stated.

“As such, it is vital that policymakers consider ways to ensure that testing is performed efficiently as well as effectively.”

Legality of CBD in the UK

Currently under UK law, Cannabis is a class B controlled drug under part II, Schedule 2, of the Misuse of Drugs Act 1971 (MDA 1971) meaning it is unlawful to possess, supply, produce, import or export it. CBD presently falls under the category of CBMP (‘Cannabis-based products for medicinal use in humans’) which is currently removed from designation under the Misuse of Drugs of 2015 order.

In a factsheet published by the UK home office, it is indicated that “licences may be issued for the cultivation of cannabis plants with a low tetrahydrocannabinol (THC) content for the production of hemp fibre for industrial purposes or the obtaining of seeds which are then pressed for their oil”.

The policy is only applicable when using parts of the cannabis plant that are deemed non-controlled such as the seeds, fibre and mature stalk. Even then there needs to be a proven commercial end use and only seed types with a THC content under 0.2% will be approved.

The lack of regulation and legislation in the UK presents a grave risk for start-ups looking to cash in on this emerging industry. The process of testing products is costly; this means that profit margins for start-ups will be slashed, making it less appealing to proposed CBD-related businesses.

It’s safe to say that the UK has followed the America’s lead on the regulation of CBD products. California spearheaded the charge for legalisation in 1996, when they allowed the sale cannabis products for medicinal use. In the UK, however, CBD has only been sold since 2015. This means that the FDA’s ongoing investigation into the regulation of the industry will be closely monitored by lawmakers in the UK.

How will FDA regulation effect the US market?

According to comments sent to the FDA, of which there were more than 4,000, the National Association of Chain Drug Stores claimed that there is “considerable confusion regarding many of these products being marketed for sale in the United States”.

They urged the FDA to “act swiftly”, while Pulak Sharma – co-founder of Kazmira – said that regulators must “clamp down” on operators manufacturing hemp oils with contaminants.

There were also comments that scrutinised the sale of CBD-products and their long-term health impacts. California-based Irwin Naturals said that “populations chronically exposed to high levels of CBD should be closely monitored to ensure long-term safety”. The American Medical Association reiterated those comments by stating: “Ongoing surveillance to determine the impact of cannabis legalisation on public health and safety will be critical.”

The variety of comments presents a key issue in the lack of regulation surrounding CBD products; confusion. In order to establish CBD as regulated health product in the US, the FDA need to act quickly to ensure uncertainty doesn’t needlessly spread to consumers.

Connecticut-based Plant Life Group believe that “it’s hard to envision a reduction in demand in the near-term. Applying existing FDA framework for NDIs (New Dietary Ingredients) to hemp products containing non trace levels of active cannabinoids would seem to be the logical path”.

With this in mind, the FDA could take the easy route of applying existing frameworks to CBD-products, or they could opt for a complete overhaul of CBD’s classification.

Arguably the most important thing is the wellbeing of consumers, not only the potential health issues but also the inevitably soaring costs of an overly-regulated industry.

Where will the CBD industry be in the future

The FDA held a preliminary public hearing on the subject of CBD on May 31 this year featuring researchers, farmers and manufacturers. Consumers and retailers however will not gain their much-awaited clarity until the FDA representatives have scoured through all of the comments made by attendees, before making a decision on what course to take the industry in the future.

At the core of the ever-growing CBD supply chain is the hemp farmers who enable the product to exist. A report from Nutrition Insight claims that “farmers are producing more biomass than can be processed by existing facilities, but even with the current limited production capacity, processors are likely producing far too much CBD.”

This signals a viewpoint that the CBD hype-train may be over before its even peaked. Sellers suggesting that producers should slow down at the start of a supply chain is a bleak sign.

Although this could just be a reactionary move as a result of the unnerving wait for the FDA to make a decision, in which the demand for produce and hemp farmers will be restored when a possible positive legislation is reached.

This could be seen positively as once the uneasy market has shaken out the trend driven, fad inspired, non serious companies, we will be left with only the passionate, committed and educated brands providing only the top quality products.

A recent market forecast produced by BDS analytics still projects that the collective market for CBD sales in America only will exceed 20 billion dollars by 2040, a significant increase on previous market reports, showing that although right now the market seems to be shrouded in smoke, the numbers prove that the industry is set to continue its train upwards.