Hemp Extracts and CBD Industry First FDA Hearing

2018 Farm Bill Hemp Manufacturing

Manufacturers in the hemp extracts and CBD industry are bracing themselves. The FDA will hold its first public hearing on hemp extracts and CBD based products.

The hearing will cover the use of CBD in food products, cosmetics, dietary supplements and drink products.

Why does this matter?

Because hemp extracts and the CBD industry is exploding so fast, people are getting ahead of themselves. But it’s about to catch up with them. Yesterday, I wrote about how a LOT of Hemp-Based CBD product vendors will be caught off guard by the coming storm of regulation crackdowns.

You see, hemp extracts haven’t been approved for use in food products. Yes, I know what you’re thinking. Food-based Hemp and Marijuana extract products are selling all over the country. But, according to the FDA and FTC regulations, you’re technically not even supposed to be advertising either as a food product.

Why are so many people getting away with it? Ask me that question in a year, and the answer will be painfully obvious. Those companies will likely be out of business. Sure, the FDA could soon approve hemp extracts as a food product. But this article explains why this isn’t as “flowery” as it sounds. Here’s why you’ll want to pay close attention to what the FDA says in this coming public hearing.

“Honeymoon” is About to End

Right now, no one is 100% clear on how strict, or lenient, the FDA will be in their coming regulations on hemp extract products. The other day, I read an interview (In Hemp Industry Daily) where Douglas Mackay, Senior VP of CV Sciences, said the FDA and USDA might be talking about their regulatory practices for hemp and CBD. Primarily, how CBD products might compare to FDA-regulated drugs.

The idea is that the Hemp and CBD industry might have “something to learn” from the regulation of other dietary supplements.  This language makes me extremely skeptical of their intent. It’s no mystery that the USDA and FDA have relationships (questionable ones) with lobbyists for these big drug companies. I can’t imagine these pharmaceutical giants are jumping up and down about competing with people selling CBD products.

Especially considering how many people are losing faith and turning to plant based products, such as hemp extracts. In my opinion, we shouldn’t be surprised to have the FDA impose stricter regulations on these products. And I fully expect all of us to suddenly find ourselves competing with deep-pocketed drug companies once they get their very own FDA approved CBD product.

Don’t mistake me. This is still an exciting industry with a TON of opportunity for small and medium sized companies who sell these products. But, here’s why we’d be naïve to assume that the Honeymoon period is about to end for all of us…

The Dark Side of “Patents”

Can you patent a natural products like hemp or CBD? If you answered “Heck no,” you might want to reconsider. Not only is it possible, it’s been done. 

I know, it sounds crazy. But anyone who has heard of Monsanto knows that there are disturbing loopholes in the United States Patent Laws. In case you’re unfamiliar, Monsanto literally patented a seed, on the claim that they had genetically engineered it. Which is true.

However, since then, we’ve seen them bully hundreds of other seed growers out of business on patent infringement claims. How could this be? In one case, a truck carrying Monsanto seeds had driven past some small, private farms, the Monsanto seeds blew off the back and into the other farmer’s fields. Guess what started growing in those fields just a few years later?

That’s right. Corn plants which had grown from Monsanto’s “patented” seeds. The agricultural giant then proceeded to sue these farmers for patent infringement. So, what does this have to do with the coming regulations on hemp extract products?

Case You’re Not Connecting The Dots, Ask Yourself This…

Can a drug company restrict other companies from using certain, NATURAL, hemp extracts? Sure they can. They’ve explicity told us such. For example, did you know that there’s a provision in the FDA cosmetic act that claims if an article has “been investigated for clinical trials,” and if the trials have been publicized, you can no longer introduce that item as a food, or a dietary supplement?

Imagine that. And even now, there is such an item under review. It’s more than 99% CBD too. Imagine what will happen if someone in the CBD industry tries to sell a product similar to this one. Don’t assume the FDA will play fair either. They have a track record of ruling against natural health vendors. Just look up the court cases involving lovastatin (monacolin K), and vitamin B6 (pyridoxamine).

Again, don’t mistake me. I’m not saying the party will soon be over for small and medium vendors. But we need to be ready for what’s coming next. And, in case you’re thinking innovation is the way out of this trap…

The Double-Edged Sword of Specialization

I know what you’re thinking. If the FDA puts a lockdown on a specific CBD formula, you can always innovate your way around it with a custom formula. But, what’s to stop them from simply challenging you on how “safe” your unique formula is? Again, nothing. And it wouldn’t be the first time they’ve pulled such a stunt.  

Again, not trying to be a party pooper. But my point is that there’s an obstacle in both directions.

If your product is too similar to one they’re monopolizing through the “we’re testing that one right now,” narrative, you’re blocked there. If you create something truly unique, expect to get slapped with the “yeah, well how safe is this new formula of yours?” Either way, you can be sure that the days of easy money in this industry are numbered.

The question is, what can you do about it? First, if you’re not staying up to date with what the regulatory bodies are planning for this industry, you’re already on your way out of business. The other day, one of our buddies got a surprise letter from the FTC about some “questionable statements” on one of his labels.

This was more than just a “friendly warning.” We’re talking about a six figure fine (nearly half a million actually), and a looming possibility of more than a year in jail. That’s enough to put most people out of business. We’re talking about someone who woke up one morning, grabbed a cup of coffee and starting thinking about what exciting new plans he had for his brand new business.

A few hours later, he was staring down a legal crisis that would tie him up for years and send his business the way of the Titanic. 

Major Disruption Around The Corner

Thankfully, you don’t have to end up in this position. But, I hope I’ve scared you into paying closer attention to the legal evolution of this industry. It could save your business.

The FDA is about to serve up a MAJOR disruption to this industry. Some of you will find yourselves on the right side of it. Others will be kicking themselves for not getting their act together sooner. If you want to be in the former group, we can help.

We’re one of very few hemp manufacturing companies that have been around since long before hemp-based CBD products become trendy. All of our private label and custom products are farmed and manufactured in an FDA approved facility. With our products on your shelves, you can be confident that you’ll be in business long after many of the “imposters” in this space are stocking shelves at Walmart.