Hemp Week 2019: More Regulation May be Good Thing for Booming CBD Market

The FDA could take years to settle its official position on CBD including any formal regulations limiting production and sale, according to Ecofibre’s chief science officer Alex Capano, leaving consumers with few assurances about product quality in the meantime.

Normally, farmers are viewed as being opposed to regulation. Ask any row crop producer or cattle grazier about how laws pertaining to things like water quality, food safety, and animal health affect their operations for better or for worse and you may be in for an earful.

But in the case of hemp producers, who recently scored a major win in the 2018 Farm Bill with the legalization of industrial hemp, regulation could be their salvation, particularly when it comes to the booming market for CBD products.

Cannabidiol, or CBD, is derived from the hemp plant but does not cause the psychotropic effects associated with cannabis containing THC. CBD is offered in a range of products from supplements to creams, to promote health and wellness. It’s particularly popular for its potential to reduce anxiety.

The Farm Bill paved the way for industrial hemp, redefining the previously outlawed plant as an industrial crop encompassing any cannabis sativa plant that contains 0.3% or less of THC, which is the compound in the plant that creates a psychoactive effect. But it made no mention of the rapidly-growing CBD product segment. This includes a myriad of health and wellness products from CPG infusions to topical creams touted as providing benefits like pain relief, mood stabilization, and anxiety suppression.

“Unfortunately, due to the lack of regulation, it really is the wild west,” Dr. Alex Capano, chief science officer at Ecofibre, told AFN. “Technically, only CBD that is derived from US-grown hemp is legal under the Farm Bill but there’s CBD that is imported from other countries on a lot of shelves. That hurts consumers and American farmers. The Farm Bill is supposed to protect them and to provide them with this business opportunity. But there’s no way to regulate foreign grown hemp, which may have been produced with pesticides or dangerous chemicals, from coming into the US.”

Ecofibre has had its hands in several aspects of the hemp industry for over two decades, maintaining numerous business lines built around the plant a CBD company focused on hemp production, education, and legalization Ananda Hemp, food-grade hemp ingredients maker Ananda Food, sustainability-focused hemp textile maker Hemp Black, and hemp-based pharmaceutical product maker Ananda Professional.

Last week, the FDA conducted its first hearing to explore a potential stance on regulating hemp-derived CBD products consisting of 10 hours of testimony. At the outset of the hearing, acting commissioner of the FDA Ned Sharpless noted some doubts about the compound’s efficacy.

“There are real risks associated with [THC and CBD] and critical questions remain about the safety of their widespread use in foods and dietary supplements,” Sharpless said. “While we have seen an explosion of interest in products containing CBD, there is still much that we don’t know. What if someone applies a topical CBD lotion, consumes a CBD beverage or candy, and consumes some CBD oil? How much is too much?”

As countless farmers convert their acreages to hemp production so that they can meet the booming demand for CBD products, the FDA’s uncertain position posts a serious threat. If the FDA decides to restrict the sale of CBD products or poses other severely limiting regulations, then newly founded hemp farmers could find themselves in quite a bind.

Consumers are also facing an unsettling level of uncertainty when it comes to the quality and content of CBD products. Statista estimates that CBD product sales will reach a staggering $1.8 billion by 2022 and that it could be a $23 billion industry by 2025. This creates a major incentive for companies to get to market with their CBD products and to stake out their territory in the ever-increasing “green rush.”

Mainstream drugstores like CVS, Walgreens, and Rite Aid all carry CBD products while luxury retailer Neiman Marcus announced earlier this year that it will start stocking an assortment of CBD products. In the cannabis space more broadly, there are at least 23 industries looking to capitalize on the growing legalization of marijuana.

This is clearly a case of industry outpacing regulation, but it may be a long time before we see the FDA’s final decision on the future of CBD.

“I think that the FDA has a lot of decisions to make so it is going to be a long road before we get any definitive ruling,” Capano says. “In the meantime, we need to self-regulate as an industry as best we can.”

In the spirit of transparency and quality control, Ecofibre has enacted a serious set of protocols aimed at assuring buyers that they are getting high-quality goods and that they understand what’s inside the product. The company performs a variety of third-party lab tests to test for contaminants and to verify potency, for example, and links each product back to the test results through a lot number provided on the product labels.

“The consumer can then match the product with the lot number and see those test results online. That could become the industry standard if consumers demand that level of transparency and it will weed out the bad apples while bringing companies that are trying to do this the right way to the top.”

Next to its strict transparency standards, Ecofibre’s next best way of cutting through the fray in the unregulated CBD market is through education. Instead of targeting consumers, who seem to be largely aware of the potential benefits of CBD, Capano has found a better audience to promote the brand’s wares.

“So many healthcare providers have a knowledge gap when it comes to CBD and its therapeutic potential, its safety, and potential drug interactions. It’s an unprecedented situation because doctors often have patients who are more educated than they are about CBD,” she adds.

One thing that would boost education and awareness among the healthcare industry would be more research regarding hemp, but laws have made it difficult to conduct the necessary studies, Capano says. Like so many others in the industry, she’s hoping that the red tape will soon be addressed so that the full potential of CBD can be explored.

“If the FDA determines the CBD is not safe then I think you would have a lot of disappointed and maybe even angry people. I am hopeful that won’t happen. I think there may be some regulation such as certain CBD products that are not available over-the-counter like a very high dose of CBD that’s prescription only,” she explains. “And if they don’t regulate it there will end up being a black market that will only make consumers more vulnerable because they will have no testing, quality assurance, or transparency. We’re actually hoping for some regulation.”