FDA Cracks Down On CBD Sales: What This Means For Your Favorite Brands

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14 August, 2019 By Savannah Hasty

Millions of consumers—even those who aren’t 420-friendly—are discovering the incredible benefits CBD has on health, mood, and management of illness. Now that CBD is available to a mass market, the FDA is cracking down on the industry and setting new expectations for CBD brands to follow.

The cannabis and hemp industry is growing, and the CBD niche within that market is growing even faster. Brightfield Group recently conducted a study on the cannabis industry and estimates U.S. gross CBD sales to surpass $22 million by 2023. That number offers a potential compound annual growth rate of over 100%, a remarkable figure for an industry that is just starting to reach its potential. That also makes CBD the best niche for cannabis investors in the coming years.

However, despite obvious growth and ongoing research in the field, the FDA is cracking down on the sale and marketing of some of the largest CBD retailers in the U.S. On July 22, 2019, they sent a letter to CBD giant CuraLeaf, claiming that their CBD products were “misbranded drugs” and in violation of the strict rules the FDA has in place regarding sale of CBD and the overall supplement market.

The letter stated that the company is “illegally selling unapproved products containing cannabidiol (CBD) online with unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases.” These are serious accusations, as any supplement company that makes claims of these nature are in direct violation with the FDA standard. CuraLeaf has 15 days to correct the packaging claims on their products or they risk being shut down entirely.

This PR crisis caused CuraLeaf to tentatively lose their distribution deal with CVS Health, putting a major dent in their estimated revenue for the year. However, CuraLeaf isn’t the only CBD brand under fire. Several smaller brands received similar warnings to correct their packaging claims or risk suffering severe legal consequences.

This action is in line with talks deputy commissioner Dr. Amy Abernethy of the FDA had with Congress at the end of July. She spoke to the Senate Agriculture Committee and offered warnings to lawmakers that the regulation of CBD should be enforced more strictly now and in the future. In her testimony she stated, “We are concerned that widespread availability of CBD in products like foods or dietary supplements could reduce commercial incentives to study CBD for potential drug uses, which would be a loss for patients.”

The FDA’s primary concern is that if CBD is widely available as an over-the-counter supplement (an industry which can legally provide no substantial health claims), that pharmaceutical companies will rapidly decrease research in the area. Abernethy continued, “CBD cannot be marketed as a dietary supplement, and foods to which CBD has been added cannot be introduced into interstate commerce.” The FDA’s strict policies are expected to remain, and soon other CBD brands may be receiving similar warning letters against their marketing claims.

Currently, the FDA only recognizes two medical conditions which can be treated with cannabinoids., specifically the drug Epidiolex. No other CBD or cannabis-derived extract can be marketed as a medication or supplement under the FDA.

What Does This Mean For The Future Of CBD?

As the FDA puts its foot down on the marketing practices of CBD manufacturers, companies will have to raise their standards and provide thorough information regarding CBD and its uses. CuraLeaf should have no problem bouncing back from this discrepancy; however, they should serve as a warning to other CBD brands to be vigilant in their marketing practices as the FDA becomes more stringent in their enforcement of certain regulations.

Though the use of CBD is still under scrutiny from the FDA, research institutes and consumer anecdotes are slowly changing the minds of lawmakers on its benefits. As an understanding of cannabinoids develops in our governing bodies, the hope is that CBD can be used in medications as well as dietary supplements, with accurate information provided to consumers about its effectiveness.

Written by

Savannah Hasty