FDA Announces Changes in the CBD industry
According to forecasts, the CBD industry was waiting for considerable changes in 2019. In October 2018, the government of Canada permitted to sell CBD-containing products.
Trump signed a farm law, which led to the authorization of the industrial production of cannabidiol. Also, this law allowed non-specialized shops to sell CBD products.
CBD industry is increasing. Annual turnover increased from $ 600 million to $ 23.7 billion, according to Brightfield Group. However, on November 25, the FDA issued amendments to the law, according to which the CBD industry could be affected.
The study on the usage of cannabinoids found side effects that can occur later. For example, there is an anticonvulsant drug Epidolex, which hurts the liver.
There are some essential parts of the new law can be distinguished.
1. The FDA is actively fighting companies that misinform the consumer about the effects of CBD on the human body. For example, they issued a warning to Curaleaf Holdings (OTC: CURLF). The company responded to the comment but signed a contract with CVS Health.
2. Consumers and investors should not wait for adding of CBD to food and drinks soon. According to Scott Gottlieb, who headed the agency until March 2019, the development of a regulatory framework is usually carried out for three years. In the case of CBD, it may take more time because of the complicated classification of hemp.
3. The amendment will not affect other products containing cannabinoids, such as oil and infusion preparations. Despite all the bans, Charlotte’s Web network continues to grow and increase the number of retail stores from 3,680 to 9,000 per year. We can conclude that the CBD industry is developing, despite the timing of the adoption of the law.
4. The Canadian market does not suffer from laws that are enacted in the United States. Recall that last week, Nana Anheuser-Busch InBev (NYSE: BUD), together with Tilray (NASDAQ: TLRY), released a tea line with CBD in Canada.