FDA Curbs Enthusiasm on CBD Products

Among the many facets of the cannabis industry, the last few years’ wave of investments on the CBD niche (which is growing to become less and less ‘niche-y’) seemed to be able to finally rest on safe grounds. In December 2018, the Farm Bill was signed into law by the U.S. President; in this context, among other things, the industrial cultivation of hemp was ruled as legal, including also hemp-derived CBD products. This step, in the course of the federal legalization of cannabis products, did in fact reassure investors about their bets on CBD-related stocks and entrepreneurial moves.

However, on March 5^th, 2020, the FDA Commissioner Stephen Hahn made clear what stance they take on CBD. In the most recent update to the organization’s official website’s, in the section regarding cannabidiol, the opening statements iterate that the only CBD-based product that received FDA-approval so far is GW Pharmaceuticals’ medicament named Epidiolex. It is reinforced that no other product containing cannabidiol has underwent the necessary trials and testing procedures for it to be marked as safe according to the Food and Drug Administration’s standards. Furthermore, we can find some unsettling remarks about the current state of scientific research on CBD and on its implications. We quote from the website:

1. CBD has the potential to harm you, and harm can happen even before you become aware of it.
2. CBD can cause side effects that you might notice. These side effects should improve when CBD is stopped or when the amount used is reduced.
3. There are many important aspects about CBD that we just don’t know.

These three points are articulated into a series of observations made about the effects of cannabidiol consumption and correlated risks, ranging from the way it alters alertness and mood, to the damages it may cause to male fertility, or the possibility of liver injury. The position Hahn took in regards to CBD, of course, questions the safety for human consumption of cannabidiol-infused products, like foods, beverages and cosmetics. To rationalize a bit of the political jargon of the FDA’s statement, let us look at its two main implications. On the one hand, a grey cloud of entrepreneurial uncertainty keeps on hanging above the head of CBD-related investments and companies, as far as the United States of America go. On the other, the organization implicitly reaffirmed that research on cannabidiol is, as of now, far from concluded and will be carried on.

In fact, during last February’s NASDA Winter Policy Conference, Mr. Hahn commented that, in the current state of affairs, the FDA’s approach will not threaten the CBD marketplace or the legality of CBD products but, rather, that the organization’s “decisions will be informed by a review of all the relevant research and data”. During this conference, Hahn gave his first public comments in regard to the issue of cannabidiol’s legality, declaring that it would be definitely unrealistic to now attempt tackling the issue with banning intentions. So, all in all, the very pragmatic, although quite pessimistic, approach that the FDA took on the issue means that investors can still look at the future from a (fairly) unalarmed perspective.

The road to the final approval from the FDA is still long, but the hopes for the CBD industry are far from being lost.