Because of the chaotic news-cycle of the last few years, it’s hard to believe that it was only three years ago that former President Trump signed the 2018 Farm Bill into law. That was a huge moment for the CBD industry as it explicitly legalized CBD (and other minor cannabinoids derived from hemp).
It may seem like the CBD industry is blazing ahead, and that’s because in some ways it is. Certainly, the industry has been making money. According to Statista, US CBD consumer sales are expected to reach around 1.8 billion US dollars by 2022- a significant increase from around half a billion dollars in 2018.
But there remains significant uncertainty about the future of CBD in the US. At stake is not CBD’s legality, which has already been enshrined in law. What remains in question is how the FDA will regulate CBD as a consumer product.
It’s hard to believe that while CBD has been federally legal for three years, the industry has yet to receive any guidance on what is (and is not) allowed when it comes to CBD products. This means that companies are investing huge amounts of money in developing products before they even know how these products will be regulated in the future.
As you can imagine, the uncertainty makes finding financing difficult as well. Investors are leary of putting large amounts of cash behind into a product line which could end up being worth nothing if the FDA decides that CBD can’t be used in certain ways.
For example, products like CBD-infused edibles and drinks remain a huge question since the FDA holds that any substance (like CBD isolate) that has been used in a pharmaceutical can’t be used in food.
The lack of federal regulation means that customers don't know which CBD companies are legitimate and which are best avoided. The uncertainty also makes it hard for CBD businesses to find funding for their businesses.
The FDA has not enforced this rule, though, and the result is that we currently have a confusing patchwork of state-level regulations on CBD-infused food and drink. Some states have chosen to completely outlaw any CBD in food or beverages while others have passed state legislation that explicitly legalizes it.
The lack of regulation also perpetuates the idea that the CBD industry is the “wild west” of wellness products. Legitimate companies that work hard to maintain high standards of quality and transparency see their products sitting beside dubious ones. And how are consumers to know the difference?
FDA agency heads have long cited the lack of scientific research on CBD – especially regarding its safety profile – as the primary reason that they have held off on publishing regulatory guidance. But the CBD industry is growing weary of that excuse, and some companies are taking the cost of scientific research on themselves in an effort to move things along.
One example of this is a recent study on the long-term safety of CBD, funded by Canopy Growth (the company that brought us Martha Stewart’s CBD product line). CV Sciences is another major CBD company that has funded research into the safety of their CBD products.
These studies may have moved the needle for the FDA, but according to an article written in January by Trump’s outgoing FDA Commissioner Dr. Stephen Hahn, it’s not enough:
“We are encouraged by the many groups that are interested in helping to develop better data on the use and safety of CBD products, but also note that existing efforts generally are not adequate to fill the outstanding knowledge gaps.”
The day after Biden’s inauguration, the FDA withdrew their proposed CBD enforcement plan, which had been waiting in limbo in the White House, pending review. This is probably not a surprising move, since the new administration may decide to take a different approach to the substance.
At any rate, the new FDA commissioner will need to review the proposed regulations before deciding to move forward or revise them as needed. To date, Biden’s acting FDA Commissioner, Dr. Janet Woodcock has given no indication of when we can expect to see those proposed regulations.
It’s possible that a new FDA Commissioner will decide to take the regulations in a different direction entirely. Either way, the CBD industry remains hopeful that Biden’s administration will speed up the process of regulating CBD, providing desperately needed stability for investors and safety regulations for consumers.