Even after Congress legalized hemp at the federal level, the FDA still caused some confusion about the legal status of CBD. Danny Brody takes a look at what the FDA’s concerns are, and how CBD companies can alleviate those concerns and create a fortune in the process.
The Farm Bill, which passed in December of 2018, unleashed a massive wave of growth of hemp-based CBD products.
But even with all that growth, there remains a lot of confusion around what’s legal, what’s not legal, and why.
When the Farm Bill passed, it removed hemp as a Schedule 1 drug in the Controlled Substances Act, making it fully legal under federal law and establishing hemp as an ordinary agricultural commodity.
It opened up traditional farm benefits such as crop insurance, research, and marketing, creating a fair playing field for low-THC cannabis in the high-CBD market place.
But just as Congress told the nation hemp was federally legal, the U.S. Food & Drug Administration (FDA) stepped in and muddied the waters.
Today, I want to explain what the FDA is concerned about.
Immediately after the revised Farm Bill was passed, FDA commissioner Scott Gottlieb reminded would-be producers and retailers that Congress explicitly preserved the FDA’s current right to regulate products containing cannabis- or hemp-derived compounds under the Pure Food and Drug Act.
This allowed the FDA to enforce the law and protect consumers and the public while providing legal regulatory pathways for products containing cannabis and cannabis-derived compounds.
The U.S. CBD market is exploding, outpacing medical cannabis growth, and it is expected to hit $22 billion by 2022, so there is significant interest in the U.S. CBD market by both consumers and companies vying for market share.
The FDA treats products containing cannabis-derived compounds the same as any other product it regulates, meaning they’re subject to the same requirements as any FDA-regulated product.
There are two main concerns for the FDA.
First, the FDA requires all products with health claims of therapeutic benefits to be approved for their intended use before they are introduced to the market, so naturally, when health claims are made without approval, it becomes a concern.
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Second, FDA approval was granted to several drugs with active cannabinoid ingredients, making those ingredients subject to clinical trials before approval and marketing as foods or dietary supplements. So it’s illegal to introduce those “drug ingredients” into other products and mark them as “dietary supplements.”
The GRAS Solution
The first of the FDA’s concerns is easily overcome – reputable companies are avoiding specific health claims that might trigger the FDA’s interest and letting the media educate consumers about CBD’s benefits. This method is fueling the massive growth of CBD in tinctures, lotions, and the like, and even CBD for pets.
But putting CBD into food products is a more difficult hurdle to jump.
While the FDA has said they will “advance new steps to better define public health obligations related to CBD,” it has not yet been clarified. Right now, you can legally buy a beverage containing THC in California, but not a beverage containing CBD.
However, there are certain pathways companies can go down and still receive FDA approval. Some foods derived from hemp that may not contain CBD or THC are a prime example. Some foods are classified as “Generally Recognized as Safe” (GRAS). Attaining GRAS status clears the substance to be used in foods and beverages without fear of regulation.
Self-affirmed GRAS is when a company, rather than the FDA, does research on a food product and shares their evidence with the FDA. If the FDA doesn’t question the self-affirmation, the company may assume that the food is GRAS until it is told otherwise.
Some companies have already achieved a self-affirmed GRAS determination regarding the non-CBD containing parts of hemp, like the seeds, oils, and proteins.
CV Sciences (OTC: CVSI) claims that it has achieved self-affirmed GRAS for a CBD product. It is the only CBD company to have done so, though I believe that Charlotte’s Web (CSE: CWEB, OTC: CWBHF) is close and other companies will follow.
Aside from GRAS certification, the FDA has scheduled a public hearing for May 31, 2019 to allow the public to comment, share their feedback, and discuss any foreseeable challenges with CBD-related products.
The main thing they’re after is information and data related to the safety of CBD products. My belief is that with no “intoxicating” effect, and only positive comments from the public about the effects of CBD-infused products, this should be fairly straight forward.
With the FDA’s commitment to protecting consumers, I believe companies will be required to go through the approximately 12-month and nearly $1 million process to achieve GRAS affirmation before they’ll be able to sell any food or beverage products, though the FDA or Congress could speed up matters if either chooses to do so.
With these products soon to be legally marketed in human foods without approval, it’s going to open up an entirely new wave of fully FDA-legal, fully FDA-compliant products in the CBD space, paving the way for significant new opportunities.
In the meantime, as we see with the big retailers getting into CBD, there are plenty of opportunities with the tinctures, creams, lotions, and other non-food CBD products to produce enormous growth for the industry.
You can be sure that Greg and the NICI team will be working tirelessly to deliver you the best opportunities to secure your retirement fortune.
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10 responses to “Hemp, GRAS Affirmation, and the FDA”
May 24 2019