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HIGHLIGHTS
  1. Hemp-derived CBD industry needs clarity on permitted products from U.S. government
  2. U.S. lawyer says therapeutic claims on CBD products will earn companies unwanted FDA attention
  3. FDA has sent 15 warning letters to companies making health claims on CBD products

The U.S. Food and Drug Administration is expected to soon clarify legalities around cannabidiol (CBD) products, but this much-needed information may not be as friendly to the market as many hope for the burgeoning industry that some estimate will balloon above US$20-billion in annual sales.

“We all want more certainty in this space. It’s just not clear to me if it’s going to be the most CBD-friendly policy,” said Jonathan Havens, co-chair of the Cannabis Law Practice, adding that he expects the U.S. Food and Drug Administration (FDA) will clarify CBD manufacturing legalities in 2020.

“I think the FDA is looking for uniformity in standards. At a minimum, I think the FDA is making sure people don’t make aggressive claims about their products. I do believe the FDA wants to have an even playing field for like-products.”

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For now, American companies touting therapeutic claims on their cannabidiol (CBD) products could soon have regulators “knocking on your door,” while those selling it in dietary supplements rather than food will have a better chance at staying off the government’s radar, the U.S. lawyer told a room full of industry representatives at MJBizCon in Las Vegas last week.

“The FDA will not be as aggressive going after supplements as conventional food,” Mr. Havens predicted.

“Anything you say about your product needs to have substantiation. If you’re not making therapeutic claims, you’re not going to hear from the FDA. The only firms who have received warning letters to date have made … aggressive therapeutic claims.”

Some companies have made claims for their CBD products, such as a treatment for specific diseases that have not been proven in clinical trials.

The FDA recently sent warning letters to about 15 companies it says are selling CBD in ways that violate the Federal Food, Drug, and Cosmetic Act. When the 2018 U.S. Farm Bill legalized industrial hemp at the federal level, it did not provide details on hemp-derived CBD. With CBD products fetching steep premiums for manufacturers and retailers, U.S. businesses have jumped on the opportunity to sell the cannabinoid in an array of mediums ranging from beverages to lotions to pet food, even as they await the FDA’s clarification on the products’ legal standing.

“The biggest misconception coming out of the U.S. Farm Bill is you can do whatever you want with CBD,” Mr. Havens said.

But in November, the FDA stated: "Based on a lack of scientific information supporting the safety of CBD in food, the FDA is also indicating today that it cannot conclude that CBD is generally recognized as safe.”

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While some analysts expect CBD retail sales to reach more than US$20-billion by 2022, Jefferies Equity Research pegs it at US$3.5-billion as the FDA strikes a “very cautious tone” on CBD product safety.

“I predict Congress will paint FDA into a corner on over-the-counter CBD products with small amounts of CBD,” Mr. Havens said, adding the vaping crisis could cause federal and state regulators to further restrict CBD products.

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