Could the FDA Legalize CBD in Food and Drink?

Written by Jennifer Clark
Posted April 3, 2019

CBD, also known as cannabidiol, is going mainstream. Everyone is touting the wonders of this substance. And to be honest, I'm a believer.

If you’re not aware by now of what CBD is, let me explain real quick…

It’s a non-psychoactive compound in the cannabis plant that has the effect of relaxing the body like marijuana. However, CBD doesn’t contain THC, which is the psychoactive component of cannabis.

But it’s not entirely legal at the moment, which leaves business owners, who have started selling CBD products, very confused. The Food and Drug Administration has set its first public hearing on CBD for May 31, and it looks like the agency could be looking at legalizing the compound in food and drink.

The federal government legalized CBD that’s derived from hemp, but it prohibits companies and restaurants from adding it to food and beverages. Firm and clear regulations need to be put into place to make sure there is no confusion among business owners, manufacturers, or consumers. Last month on Capitol Hill, lawmakers called out FDA Commissioner Scott Gottlieb. They demanded that the FDA figure out a way to properly regulate CBD in food and drink because companies are already creating and selling products containing it.

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Hoping that regulations will soon change and become more specific, a bunch of start-ups have introduced CBD-infused seltzers, cookies, and lattes despite the FDA’s current guidance. There are a lot of profits to be made on CBD for both smaller and larger companies — and those companies are very aware of those profits. However, bigger consumer brands and retailers are standing back until the FDA has this meeting to discuss what is appropriate for the CBD market and its regulations.

According to a notice posted Tuesday in the Federal Register, the FDA needs and wants more data on CBD’s safety in food products, along with more feedback about how it can regulate manufacturing, marketing, and labeling.   

The agency said:

The goal of the hearing is to obtain additional scientific data and other information related to cannabis and cannabis-derived compounds, both from botanical and synthetic sources, to inform our regulatory oversight of these products.

FDA does not intend for this hearing to produce any decisions or new positions on specific regulatory questions, but this hearing is expected to be an important step in our continued evaluations of cannabis and cannabis-derived compounds in FDA-regulated products.

It's unlawful to use an ingredient in food or drink that’s under clinical research or is the active ingredient in a prescription drug; that's what CBD is. In this meeting, the FDA must figure out how CBD can exist as a drug product and a food product.

One solution Gottlieb suggests is that products with high concentrations of CBD be regulated as drugs and those with lower concentrations be categorized as food products. Decisions on CBD and how exactly it should be regulated won't be an easy process or even a quick one. Gottlieb has indicated to the public that the average rule takes two or three years for the FDA to draft, finalize, and then recommend to Congress.

GlobeNewswire reports that the global market for CBD hemp oil is expected to reach $1110 million by the end of 2025. The market will rise with a CAGR of 28.3% until 2025.

Without a doubt, CBD is going to be a massive industry, and it only makes sense that the government and its agencies will need to adjust laws while making it possible for the economy to benefit from this growing business.

Until next time,

Jennifer Clark
Pro Trader Today
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