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HIGHLIGHTS
  1. FDA gives Curaleaf 15 days to respond to CBD marketing warning
  2. Curaleaf shares sink more than 7 per cent
  3. FDA says concerned about proliferation of CBD products claiming therapeutic benefits

The U.S. Food and Drug Administration (FDA) on Tuesday warned Curaleaf Holdings Inc., which is on track to become the biggest legal cannabis company in the United States, for “illegally selling unapproved” CBD products with “unsubstantiated” health claims.

It’s the latest reputational challenge for a burgeoning industry that lacks scientific evidence regarding the cannabinoid’s effects on people and pets as the FDA enforces current U.S. laws with one of the biggest companies selling hemp-derived CBD.

The latest move by the agency comes as it works toward setting new regulations around the ingredient that was federally descheduled as a controlled substance in late 2018 with the passing of the U.S. Farm Bill. However, CBD derived from hemp remains a regulated substance under the auspices of the FDA, and would still be considered illegal if it was extracted from a hemp plant containing more than 0.3 per cent THC. CBD extracted from the cannabis plant remains illegal at the federal level.

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CBD, which is a non-intoxicating compound found in hemp and cannabis, has quickly become popular by consumers, many of whom believe it reduces inflammation, improves the look of their skin and calms their pets. Since recreational cannabis was legalized in Canada in 2018, many licensed hemp and marijuana companies use CBD products as a way to reach previously untapped demographics such as women and the elderly. CBD products such as topicals and drinks have also shot up in popularity in the United States, especially since the hemp-derived product became federally legal.

The FDA said it continues to be concerned at the proliferation of products asserting to contain CBD that are marketed for therapeutic or medical uses that have not been approved by the FDA. Still, CBD is widely associated with health and well-being, though few clinical trials on cannabinoids have been done.

“Selling unapproved products with unsubstantiated therapeutic claims – such as claims that CBD products can treat serious diseases and conditions – can put patients and consumers at risk by leading them to put off important medical care. Additionally, there are many unanswered questions about the science, safety, effectiveness and quality of unapproved products containing CBD,” said Acting FDA Commissioner Ned Sharpless.

“Today’s action demonstrates that the agency stands firm in its commitment to continue monitoring the marketplace and protecting the public health by taking action as needed against companies that deceive consumers and put them at risk by illegally selling products marketed for therapeutic uses for which they are not approved, such as those claiming to treat cancer or Alzheimer’s disease. Consumers should beware of purchasing or using any such products.”

A high-level internal working group within the FDA aims to find ways for CBD products to be lawfully marketed.

“The agency continues to be concerned at the proliferation of products asserting to contain CBD that are marketed for therapeutic or medical uses that have not been approved by the FDA,” the government agency said.

The only FDA-approved CBD product to date is Epidiolex, a prescription human drug that treats a severe form of childhood epilepsy. The approval of Epidiolex essentially committed the FDA to treating CBD as a pharmaceutical-grade drug, and has put the onus on industry to prove its health benefits.

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Curaleaf Holdings Inc., which is based in Wakefield, Mass., and trades on the Canadian Securities Exchange, and said it “will work collaboratively with the FDA to resolve all issues addressed in the agency’s letter” and that it is “fully committed to complying with FDA requirements.”

Curaleaf shares fell more than 7 per cent on Tuesday, after the FDA warned the company against illegally selling unapproved CBD products online that made unsubstantiated claims that they treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, as well as other conditions or diseases.

Last week, Curaleaf announced it plans to buy Grassroots, which would make it the biggest seller of legal cannabis in the United States.

Curaleaf’s CBD products, which range from vape oils to lozenges, are derived from hemp and meet the Farm Bill’s requirements, the company said in a statement.

This is not the first time the FDA has warned a U.S. company about its CBD products since industrial hemp was legalized in December, 2018. The agency has warned three other companies so far this year about their CBD products, but Curaleaf is by far the biggest company, according to the FDA website.

The letter was sent just days ahead of a U.S. Senate Committee hearing on Thursday, which will discuss hemp production and the 2018 Farm Bill.

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“I’ll be testifying Thursday before the Senate Committee on Agriculture, Nutrition & Forestry on the important topic of hemp/CBD and discuss the FDA’s commitment to expediting our work to evaluate the regulatory policies related to hemp & CBD products,” wrote Dr. Amy Abernathy, FDA principal deputy commissioner, in a tweet on Tuesday

Curaleaf has 15 working days to tell the FDA how its violations will be corrected and failure to do so could result in legal action, product seizure and injunction, the FDA stated.

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