Here’s what all of our members need to know about the FDA and cannabis…
Cannabis edibles and infused beverages are going to be a big part of the industry moving forward. For older individuals, one of the issues they have trying cannabis is that they don’t want to smoke it.
That means their first introduction to a cannabis product is going to be through something like a gummy or sports drink.
And that market is going to be huge.
By 2022, the cannabis edibles market could be worth $4.1 billion. Consider that total cannabis sales in North America last year were $10 billion. Canada has an early advantage in that sector of the market as edibles are expected to start hitting shelves in December.
Brands like Phivda Holdings Inc. (CSE: VIDA, OTC: PHVAF) and Plus Products Inc. (CSE: PLUS, OTC: PLPRF) that produce food and beverages are eager for the FDA to get moving and approve cannabis infused beverages and edibles in the United States.
On the surface, it seems like there should be a fairly easy answer on why the FDA hasn’t been able to make a decision. In reality, there are so many factors that go into making the decision.
One of our readers asked about the FDA, and I wanted to provide an answer, as I know a lot of you are wondering what’s going on.
Gary R. asks: “Dear Greg, could you or would you explain in laymen terms the process that the FDA attempts to use to determine limits for dosage, and what other rules and regulations could we expect?”
Great question, Gary. Unfortunately, I think the FDA itself is struggling with this issue and does not know exactly how it’s going to proceed in regards to CBD. Generally, for foods the FDA doesn’t set dosing limits.
There’s no legal limit on the amount of sugar the Coca-Cola Co. can cram into a Coke, and there’s not even a legal limit on the amount of artificial ingredients – like aspartame and food coloring – that can be used.
For substances classified as drugs, the maximum dosage in foods is zero. You can buy coffee with extra caffeine, but you can’t buy coffee with aspirin in it.
Ultimately, someone can sell tea with valerian root in it and say it will help you relax and fall asleep, but they may not say that the product cures insomnia.
I’ve got a pretty good idea of where the FDA wants to go on this issue, but no idea how they can get there. I think we’ll see something we previously haven’t seen, which is it’s okay to include the ingredient up to a certain dosage per consumable unit (per candy bar, or per bottle of water, etc.).
But it may require legislation to get to that point. In the meantime, it’s incredibly important that the CBD industry act responsibly.
That means no mega-dosing, no unsubstantiated claims for the product, and no marketing to children. As long as that responsibility by the industry keeps up, I’m confident the FDA will find a way to treat the product correctly.
With my expectations that the CBD industry will reach $2 billion this year, it’s a market you want to be in.
In the next comment, a member asks about recommended pricing…
Stephen G. asks: “I have not gotten into any of my positions at the price you have. It’s mostly over the recommended price. You also throw me off when you say, ‘Don’t pay more than XXX.’ But when I go to buy, the price is always more than that.”
Stephen, thanks for your comment.
What I know is our members are very excited to get in on a trade, but they often will not follow the limits I have in place. You can see the stock price go up very quickly after a recommendation, but then when things calm down, the price can go back down closer to where I originally recommended it.
I understand how it would be frustrating to buy later in the day after you first see the alert, pay a higher price, and then see the stock price fall after you may have bought at the top.
But if you are in this for the long term, one strategy you can look to do is invest a certain amount each week, month, or quarter so that you aren’t trying to time the market. For example, let’s say you first buy a stock when it is trading for $20 per share. Then the next month, it drops to $10 per share and you buy the same exact amount of shares.
That makes the average price you paid for your shares (minus fees) $15.
At that point, the stock price would just need to climb to $15 for you to get even as opposed to buying all your shares at once when it was $20.
It also works when stock prices are going up. If you bought in at $20 and then buy the same exact amount of shares at $30, your average cost is $25.
That’s part of why I say you need to be a tough and patient trader. Remember that you never have to spend your capital on one trade all at once.
Have a great weekend,
Executive Director, National Institute for Cannabis Investors
6 responses to “The FDA Is Still Struggling with Cannabis Regulations”
July 27 2019