Novice investors are worried that the FDA is trying to crackdown on the CBD industry. However, that’s not at all what is going on…
Earlier this week, I wrote a report about FDA Commissioner Scott Gottlieb resigning from his post. I encourage you to take a look at that if you haven’t already, as I explain that his resignation should not be a sign to sell your investments.
And it turns out that I was right…
The new acting FDA Commissioner is Ned Sharpless, who previously served as Director of the National Cancer Institute. In 2015, the Cancer Institute found in a study that cannabis killed cancer cells in mice and rats. While I don’t know Sharpless’s personal views on cannabis, we at least know that he is aware of studies that show the medicinal benefits of marijuana.
He is serving in an interim role for now, but I’m not going to lose sleep waiting for Gottlieb’s full-time replacement. As I’ve said before, 2019 is the “Year of CBD.” It doesn’t matter who takes the reigns as the FDA Commissioner.
However, I do understand that some comments from the FDA have a number of investors still worried about a crackdown on the CBD industry.
It’s true that there is going to be a discussion between the FDA and cannabis industry, but it’s not going to be the war that some are trying to make it out to be.
In fact, the FDA has shown that it’s ready to help the CBD market grow.
So if you have any doubts, don’t worry – I’m going to show you why CBD investments are still set to make you a ton of money…
What the FDA Really Wants
Producers, customers, and investors around the country were alarmed last month when the Food and Drug Administration (FDA) seemed to throw cold water on the CBD industry in the wake of the passage of the Farm Bill.
The FDA said two things. First, it said that CBD producers could not make specific health claims about CBD. That alarmed some novice investors, but most industry participants weren’t worried. The FDA says that about nearly every substance, and yet the nutraceutical is expected to exceed $102 billion in sales by 2021 – in the U.S. alone.
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However, the FDA’s second statement was more worrisome. It stated that because CBD was an approved drug, it could not be put into any food products.
Some industry analysts thought that would kill the growth of CBD being infused in food and beverages, which is expected to be a huge subsector of the CBD market moving forward. In fact, that’s why we’re recommending the top CBD stocks.
But here’s the thing…
CBD is a naturally occurring substance in cannabis plants, so how could the FDA prevent its use?
The truth is that in the FDA’s eyes, food and drugs should never mix. You can buy plenty of energy drinks with caffeine, but none with aspirin. There are no soups with cold-relief drugs mixed in.
So because it views CBD as an approved drug, the FDA had no choice but to assert itself.
But it does not want a war with the CBD industry, and it does not want to slow the growth of the market. It just wants to make sure its turf – and consumers – are protected.
The Truth About the FDA & CBD
In a speech last month, former FDA Commissioner Scott Gottlieb laid out the terms in which the FDA and the CBD industry would reach a peaceful coexistence without ever going to war in the first place. He set up meetings with the cannabis industry to seek their input.
In fact, he set up those meetings exactly because the normal regulatory process takes so long and he doesn’t want to slow the CBD market from growing.
He also committed to talking to Congress about alternative approaches – the very same Congress that passed the Farm Bill in the first place!
Now, I want you to know that Gottlieb’s resignation as FDA Commissioner will not slow this approach much, if at all. He had doubtlessly consulted with FDA regulators and scientists before making his speech.
The FDA will move forward regardless of who is in the Commissioner’s office.
How will this end?
There’s no question in my mind that the FDA will allow CBD in foods up to a certain amount and ban it beyond that amount.
For example, a typical CBD dose for a person seeking to treat medium pain might be 20 mg. At the U.S. average female weight of 76.4 kilograms, that comes out to a daily dose of .26 milligrams per kilogram of body weight. Even for a four-year-old who weighs 40 pounds (18.1 kilograms), they would receive a little more than just one milligram per kilogram.
Compare that to Epidiolex from GW Pharmaceuticals PLC (Nasdaq: GWPH), which has dosing of up to 25 milligrams per kilogram of body weight. The drug is 25 times as much CBD as the over-the-counter amount. And most food products will have far less CBD than that!
That difference leaves a lot of room for the FDA to maneuver.
It could set the maximum amount of CBD in a food product’s standard serving size at only 10% of the maximum dosage of Epidiolex, and it would still be more than double what most food and beverage companies are envisioning putting into their products.
So don’t worry about a war on CBD by the FDA. It’s not going to happen since the two sides are not hostile toward each other.
The whole discussion is very informative, though. It highlights the challenges regulators have with the compounds in cannabis.
It’s true that no food products have drugs in them, but there are also no drugs where you can go eat a plant and get a useful dose of a drug. I recently discussed this issue with Jenn Larry, President of CBD Advisory Group and a member of the National Institute for Cannabis Investors Advisory Board.
We agree that there’s a central question to all of this: Is cannabis a food or a drug?
In the case of CBD, I’m quite confident that the answer will be, “it’s both.”
Thank you for being such an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
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4 responses to “The Future of Cannabis & the FDA”
March 14 2019