The Food and Drug Administration has thrown some cold water on the hot market for cannabidiol (CBD) products.
In a revised consumer update released Monday, the FDA emphasized that it’s currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement. The agency said it can’t conclude that CBD is “generally recognized as safe” (GRAS) by qualified experts for use in human or animal food. What’s more, the FDA noted that CBD products marketed for therapeutic uses, including topicals, haven’t been approved and their claims and safety remain uncertain.
“We remain concerned that some people wrongly think that the myriad of CBD products on the market, many of which are illegal, have been evaluated by the FDA and determined to be safe, or that trying CBD ‘can’t hurt,’” Amy Abernethy, principal deputy commissioner for the FDA, said in a statement. “Aside from one prescription drug approved to treat two pediatric epilepsy disorders, these products have not been approved by the FDA, and we want to be clear that a number of questions remain regarding CBD’s safety, including reports of products containing contaminants, such as pesticides and heavy metals.
“And there are real risks that need to be considered,” she added. “We recognize the significant public interest in CBD, and we must work together with stakeholders and industry to fill in the knowledge gaps about the science, safety and quality of many of these products.”
Also on Monday, the FDA issued warning letters to 15 companies for illegally selling products containing CBD in ways that violate the Federal Food, Drug and Cosmetic Act (FD&C Act). Companies receiving the warnings included Koi CBD LLC, Pink Collections Inc., Noli Oil, Natural Native LLC, Whole Leaf Organics LLC, Infinite Product Co. LLLP (dba Infinite CBD), Apex Hemp Oil LLC, Bella Rose Labs, Sunflora Inc. (dba Your CBD Store), Healthy Hemp Strategies LLC (dba Curapure), Private I Salon LLC, Organix Industries Inc. (dba Plant Organix), Red Pill Medical Inc., Sabai Ventures Ltd. and Daddy Burt LLC (dba Daddy Burt Hemp Co.).
“CBD is marketed in a variety of product types, such as oil drops, capsules, syrups, food products such as chocolate bars and teas, and topical lotions and creams,” the FDA stated. “As outlined in the warning letters issued today, these particular companies are using product web pages, online stores and social media to market CBD products in interstate commerce in ways that violate the FD&C Act, including marketing CBD products to treat diseases or for other therapeutic uses for humans and/or animals. Other violations include marketing CBD products as dietary supplements and adding CBD to human and animal foods.”
What’s the Law, What Are the Risks?
Under the FD&C Act, the FDA defines a drug as any product intended to treat a disease or have a therapeutic or medical use, as well as any product — other than a food — intended to affect the structure or function of the body of humans or animals. The FDA noted that, unlike drugs approved by the agency, it hasn’t evaluated whether these CBD products are effective for their intended use, what the proper dosage might be, how they might interact with FDA-approved drugs, or whether they have dangerous side effects or other safety concerns. In addition, the manufacturing process of unapproved CBD drug products hasn’t been subject to FDA review.
Though scientific research on CBD in consumer products remains in its early stages, some of the available data raise serious health concerns, according to the FDA. Those include potential liver injury, interactions with other drugs, drowsiness, diarrhea, mood changes, possible interference with sexual development and function, cumulative use of CBD, and the impact on vulnerable populations like children and pregnant or breastfeeding women.
Acknowledging the rising consumer demand for CBD products, the FDA said it’s exploring potential pathways for various types of these offerings to be legally marketed.
“As we work quickly to further clarify our regulatory approach for products containing cannabis and cannabis-derived compounds like CBD, we’ll continue to monitor the marketplace and take action as needed against companies that violate the law in ways that raise a variety of public health concerns,” said Abernethy. “In line with our mission to protect the public, foster innovation and promote consumer confidence, this overarching approach regarding CBD is the same as the FDA would take for any other substance that we regulate.”
Retailers Move Cautiously
Even as various CBD offerings flood into stores, many retailers remain iffy about the regulatory framework regarding the sale, labeling and safety of hemp-containing products.
In July, the Food Marketing Institute submitted comment to the FDA on the commercialization of food, beverage and other products containing cannabis or cannabis-derived compounds, including CBD. FMI said food retailers need a “clear and comprehensive” regulatory framework for the marketing and sale of these products.
Still, grocery retailers large and small — such as The Kroger Co., Albertsons Cos., Southeastern Grocers, Whole Foods Market, Dierbergs Market, Earth Fare, Lucky's Markets, Fresh Thyme Farmers Market and Thrive Market — have begun carrying CBD products, primarily topicals.
Late last year, the federal government changed its classification of cannabis with the enactment of the Agriculture Improvement Act of 2018, or the Farm Bill. The legislation removed hemp — cannabis or derivatives with a very low content of psychoactive ingredient THC — from the Federal Controlled Substances Act’s definition of marijuana. That meant hemp was no longer a controlled substance under federal law, even though marijuana remains a Schedule I drug.
As the FDA reiterated in its update, CBD and THC can’t be added to a food or marketed as a dietary supplement under current federal law. The FDA maintains regulatory oversight of food, cosmetics, drugs and other products within its jurisdiction that have CBD, THC or the cannabis plant itself as an additive.
“Longer term, there will likely be a route to market for CBD products, with the FDA having already approved drugs with CBD as the active ingredient,” Jefferies cannabis market analyst Owen Bennett wrote in a research note Tuesday. “In our view, though, the safety risks as well as the spike in consumer interest will likely see heavy regulation, with companies having to support product launches with detailed reports, likely including clinical studies.”
CBD market projections
Nielsen has forecast that by 2025, sales of all legalized cannabis in the U.S. will reach $41 billion, including $35 billion from cannabis products and $6 billion from hemp-derived CBD products.
Meanwhile, CPG sales and marketing firm Acosta expects CBD product sales to consumers to hit an estimated $20 billion by 2024. Of consumers surveyed by Acosta, 28% now use CBD products on an as-needed (19%) or daily (9%) basis
“We currently model 2022 CBD retail sales of $3.5 billion, compared to some blue-sky estimates as high as $22 billion,” Jefferies’ Bennett said. “We believe this [FDA] update will be a catalyst to rebase the majority of these estimates, with risks now more visible and the FDA striking a very cautious tone on the safety of CBD products.”
Chicago-based Brightfield Group, a market research firm covering the legal CBD and cannabis industries, projects hemp-derived CBD product sales to climb from $5.1 billion in 2019 to $23.7 billion in 2023, a 47% compound annual growth rate. This year, growth will be an estimated 706%. Brightfield said key CBD product opportunities include topicals (mainly for pain relief), skin care and beauty, tinctures, capsules, gummies, CBD-infused foods and pet care.
“We’re expecting to see continued strong growth in CBD. We’re expecting that the FDA will issue a framework and allow CBD to be used in foods, beverages and dietary supplements and for even more chain retailers to get on board,” Virginia Lee, CBD research manager at Brightfield Group, said at PLMA’s 2019 Private Label Trade Show in Chicago last week. “As there’s more education, both on the manufacturer and retailer ends, some of the misconceptions about CBD twill go away and more consumers will feel comfortable purchasing CBD products.”