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Just one day after President Joe Biden was sworn into office Jan. 20, the U.S. Food and Drug Administration (FDA) withdrew its “Cannabidiol [CBD] Enforcement Policy,” a draft document many in the industry anticipated would have some guidance on regulating the cannabinoid.

While it was no surprise the FDA withdrew its proposal—a common practice when a new administration moves in—it was still unfortunate and disappointing, says Stuart Titus, Ph.D., the CEO of Medical Marijuana Inc., a California-based holding company with subsidiaries that make and sell a range of hemp-based products.

With 10-plus years of experience in the cannabis industry, Titus says the FDA has dragged its feet on carving a clear pathway for producers of CBD as a dietary supplement to grow in the marketplace, but the agency had been making some progress with the Trump administration.

Medical Marijuana

“Obviously, the FDA has approved a pharmaceutical version of CBD, known as Epidiolex, which [was] back in June of 2018,” he says. “Of course … many millions of Americans are using CBD more as just a dietary supplement, and many food processors are hoping to be able to use CBD as a food ingredient. This market has been developing for nearly 10 years now. And you would have thought that the FDA would have some kind of regulatory guidance set up for the dietary supplement version of CBD.”

The manufacturer of Epidiolex, GW Pharmaceuticals, as well as chain retailer General Nutrition Centers, reportedly met with the White House Office of Management and Budget (OMB) in September 2020 to discuss proposed rules on CBD. In 2020, GW Pharmaceuticals sold approximately $510 million of Epidiolex, according to its preliminary net products sales report.

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Titus says he believes Epidiolex has the potential to be a blockbuster drug, meaning it could generate a billion dollars a year in annual sales.

“So, certainly the pharmaceutical interests seem to be very well taken care of,” he says. “And it's just been a shame that those of us, thousands of producers of CBD, in terms of dietary supplement-type of products, are not being given equal footing, if you will, with regulations that the FDA could easily put in place.”

In May 2019, Titus traveled to the FDA headquarters in Washington, D.C., where he had the opportunity to speak before the FDA about CBD and its benefits as a dietary supplement, as well as the safety and efficacy of CBD, during a formal hearing that also included input from other doctors and industry leaders alike.

“The FDA has allowed the industry to develop, but they really haven't done any study and research on it themselves, where they haven't actually provided funding for those of us in the industry to do more study and research,” Dr. Stuart says.

In June 2020, seven companies—BoulderBotanical & Bioscience Labs, CBDistillery, CBD AmericanShaman, Charlotte’s Web, Columbia Care, HempFusion and Kannaway—formed an industry-wide study to measure the effects on the liver of daily use of full-spectrum hemp-derived CBD and CBD isolate by more than 700 healthy adults. The study was aimed at answering the FDA’s request for science-based data so it could confidently determine the appropriate regulatory path for hemp-derived CBD products.

The 700-plus consumers in the study went in for blood tests aimed at identifying any residual toxicity to the liver of the human body, specifically if they experienced elevated levels of potentially toxic liver enzymes, Titus says.

When it comes to CBD pharmaceutical use, especially for children, there’s a warning on the prescribing information for Epidiolex for doctors to watch for elevated levels of those toxic liver enzymes, he says.

“But it’s nice to see that the natural botanical products don't cause any of this residual toxicity,” Titus says. “This [700-plus] patient study that we're doing, we're going to be proving this to the FDA, that CBD is now safe. So, this study is now coming close to conclusion, and the FDA has now put a new onus on the industry that they want to see a similar study done with dogs and other animals, to make sure that there's no residual toxicity by using CBD to deliver to these animals, because a big market is now developing [for animals].”

Titus says he and his peers are happy to cooperate with the FDA in that regard, but the fact remains that CBD in the dietary supplement arena has been waiting for FDA regulations for more than eight years.

The FDA has made efforts to regulate some of the more unscrupulous CBD producers that make unsubstantiated medical claims, and certainly that type of enforcement is needed and necessary, Titus says.

“But for us in the industry to have a clear pathway, so that we can sell these wonderful CBD products currently like we are on the marketplace, we [need to] have a formal path cut out for this to be an approved dietary supplement, just like vitamin C is with a recommended daily allowance, if you will,” Titus says. “We really believe these non-psychoactive cannabinoids pose no harm or threat to society.” 

As millions of Americans use CBD, Titus says it’s “a little two-faced” of the FDA to look the other way in terms of it being a dietary supplement, yet the agency is approving the drug version. The hope is that, in the end, the science will prove itself, and the FDA will work with the Biden administration to advance appropriate regulations and policies to clear a path for legal over-the-counter CBD, he says.

In the meantime, Congress is on a path to taking action through the reintroduction of the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act with bipartisan support in the U.S. House of Representatives. First introduced in the last Congress as H.R. 8179, the act would create the first pathway for non-medical CBD products to be approved and regulated by the FDA, thereby promoting consumer safety.

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As millions of Americans are using cannabidiol (CBD) in dietary supplements, thousands of producers are still waiting on a clear pathway to market hemp-derived CBD through various sales channels. They have yet to receive approval from the U.S. Food and Drug Administration (FDA), but Congress could help open that avenue.

The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act was reintroduced Feb. 4 with bipartisan support in the U.S. House of Representatives. First introduced in the last Congress as H.R. 8179, the act would create the first pathway for non-medical CBD product to be approved and regulated by the FDA, thereby promoting consumer safety.

The reintroduced bill is sponsored by Reps. Kurt Schrader (D-OR) and Morgan Griffith (R-VA), and has support of 17 original cosponsors, including 12 democrats and five republicans.

Their backing of the bill is applauded by industry trade groups and major retail and farm organizations, including Consumer Healthcare Products Association (CHPA), a national trade association representing manufacturers and marketers of over-the-counter medicines, dietary supplements and consumer medical devices, with headquarters in Washington, D.C.

“We’re encouraged that this legislation was reintroduced so early in the new Congress and hope it remains a priority for lawmakers given the intense consumer demand and commercial interest in CBD-containing products,” says Scott Melville, CHPA president and CEO.

“The continued lack of regulatory clarity along with insufficient oversight around hemp and hemp-derived CBD has led to bad actors entering the marketplace, exposing consumers to potentially unsafe products that may lack consistency in product quality,” he says. “This bipartisan legislation would be an important step forward and is consistent with CHPA’s 2019 citizen petition calling on FDA to utilize its existing authority and establish a lawful regulatory pathway for responsible manufacturers to bring dietary supplements containing CBD to market.”

Movement on hemp regulations by the FDA came to a pause with the change of White House administrations last month, when the agency withdrew its “Cannabidiol Enforcement Policy,” a document it submitted to the White House Office of Management and Budget (OMB) in July. The specifics of that document were unknown, but some in the industry predicted—and hoped—it would provide guidance on over-the-counter CBD regulations.

Stuart Titus, Ph.D., the CEO of Medical Marijuana Inc., a California-based holding company with subsidiaries that make and sell a range of hemp-based products, says regulations from the FDA would help his company find the shelves in retail spaces like grocery stores and drug stores, among others.

Without regulatory guidance from the FDA, concerns remain about the inclusion of CBD products as a dietary supplement, he says. As a result, job creation associated with the industry is impaired as well as economic opportunity for farmers and small businesses.

“It’s nice to see that Congress is taking the lead, because they’re just sick of the FDA dragging their feet on this particular issue,” Titus says. “There were a couple of bills in [the last] Congress to potentially alleviate this and carve out that nice pathway that we in the industry wanted.”

In a Hemp CBD Coalition statement released Feb. 4, the nation’s leading hemp and dietary supplement industry trade groups, joined by major retail and farm organizations, including the National Association of State Departments of Agriculture (NASDA), united to express support of the reintroduced legislation.

In passing the Agriculture Improvement Act of 2018 (the 2018 Farm Bill), Congress made clear its intent to support the production and sale of hemp and hemp derivatives such as CBD, according to coalition’s statement. Moving the reintroduced legislation through Congress for passage wouldn’t only help ensure hemp-derived CBD could be lawfully marketed as a dietary supplement, it would also require manufacturers to comply with good practices to assure consumers that the products they purchase are safe, according to the statement.

“Reps. Schrader and Griffith have shown true leadership on this issue, and we anticipate support continuing to build as it progresses through Congress,” says Jonathan Miller, general counsel for the U.S. Hemp Roundtable, and spokesperson for the coalition. “The organizations working collectively to establish a trusted marketplace for ingestible hemp-derived ingredients applaud the bipartisan approach on this legislation.”

The coalition supporting the bill includes the American Herbal Products Association (AHPA), Alliance for Natural Health, Citizens for United Health, Consumer Healthcare Products Association (CHPA), Council for Responsible Nutrition (CRN), Hemp Alliance of Tennessee, Hemp Industries Association (HIA), Midwest Hemp Council, National Cannabis Industry Association (NCIA), National Association of State Departments of Agriculture (NASDA), National Grocers Association, Texas Hemp Coalition, United Natural Products Alliance (UNPA), U.S. Hemp Authority, U.S. Hemp Building Association, U.S. Hemp Roundtable, Wisconsin Hemp Alliance and We Are For Better Alternatives (WAFBA).

According to a January Hemp Benchmarks report, leaders in the hemp industry predict that the 2021 growing season will be characterized by more stability, along with an increase in the grain and fiber sectors. 

The price for CBD biomass continues to stabilize, as prices remained steady for January, according to the Hemp Benchmarks report, while rates for extracted CBD products decreased this month.

Further stability this year could be driven by the federal regulatory environment. Advocates of the industry suspect the Biden Administration may be more supportive of the developing hemp sector compared to previous administrations, which could create a more favorable regulatory environment for the hemp industry this year, Hemp Benchmarks said in an email.

Additionally, the USDA issued its final rule on hemp in mid-January, which also could create a sense of stability for the hemp industry. The report states the final rule contained changes that addressed several of the industry's concerns with the previous interim final rule. The final rule will replace the USDA's interim final rule and will take effect on March 22.

Other Pricing

The only product category in the report to see a consistent year-over-year increase is a calculated price for smokable CBD flower, which grew for the second straight month in a row, the report states. 

Additionally, the report shows prices for CBD and industrial hemp seeds and clones rose this month, ahead of this year's planting season; however, the prices for all genetics types were still reported lower compared to this time last year.

"Some market participants are reporting increased interest in CBD hemp from farmers this year, and at least one major grain hemp processor is looking to expand contracted acreage," Hemp Benchmarks said. "However, high prices for traditional row crops could entice farmers to plant more corn, soybeans, and wheat in 2021 and suppress acreage devoted to hemp.”

2020 Harvest Assessment

The report states that the harvest assessment consists of reports from state agriculture departments and cultivators regarding their final numbers for the 2020 growing season, which concluded that the total acreage licensed for hemp in the U.S. dropped by 30 percent from 590,000 acres licensed to 400,000 in 2020.

Based on this data, Hemp Benchmarks estimated that 85 percent of U.S. acreage was used for CBD and other cannabinoid production, which amounts to between 119,000 and 136,000 acres devoted to CBD and other cannabinoid hemp, the report states. 

"Hemp Benchmarks' preliminary estimate of CBD and other cannabinoid biomass production in 2020 is 50 million to 60 million pounds,” Hemp Benchmarks said. "We expect that the amount of biomass harvested successfully last year was higher, but that some will go to waste due to low CBD potency and storage issues. Our estimate of 2020 CBD/cannabinoid biomass production is just over half our estimate for 2019, which was 90 million to 112 million pounds."

Processing & Extracted Product Sales Update

According to the report, delta-8 THC currently appears to be the fastest-growing product in the hemp sector. Still, although the popularity of delta-8 THC is increasing, Hemp Benchmarks observed the prices are declining.

"Increasing demand for delta-8 THC is reportedly helping drive sales of some wholesale CBD products, delta-8 THC is frequently manufactured from CBD isolate, but trading volumes of delta-8 THC remain small relative to CBD product trading volumes,” Hemp Benchmarks said.

Transportation Updates

Hemp Benchmarks also found that international exports of smokable CBD flower have increased significantly since 2019, with most exports destined for buyers in Canada, Europe and some in the Middle East and Africa.

The majority of the Europe-bound smokable hemp exports are destined for Switzerland, the report states. 

"While exact prices were unable to be revealed by sources, Swiss buyers reportedly pay a premium relative to domestic rates," Hemp Benchmarks said.