Recent CBD news is making the industry look like it can’t make up its mind.
With his last fateful steps onto a voyage never to be seen again, Sir Roger Tichborne left his many fortunes behind to his aristocratic family.
Over a decade later, a man claiming to be Roger finally came home to his grief-stricken mother.
It was a miracle. The son this mother had lost years of her life fretting over was back in her kitchen, sipping a cup of English breakfast as if he’d never left.
But when it came time to collect his inheritance, other family members raised questions about this new Roger.
He couldn’t speak french. The Roger the Tichborne family knew could wrap his tongue around a french sonnet as if it were melted brie spread on a fresh baguette.
After decades in prison, Roger accepted money to admit once and for all he wasn’t the real Roger Tichborne.
When the money dried up he took back his confession and continued to impersonate the late Tichborne son.
There are some CBD companies succumbing to the same fate as Roger’s impersonator. In a public statement, the FDA lists 15 CBD companies who use misleading marketing practices.
Businesses saying whatever they want in order to entice buyers. But the FDA’s concerns aren’t just bureaucratic paranoia…
Why Are so Many Companies Feeling the FDA Breathing down Their Necks?
One of the first companies warned by the FDA is based out of a posh office in West LA. From the outside, they seem like one of the more legitimate brands selling CBD direct-to-consumer.
Their branding is spot on with other hip e-commerce brands, like Glossier and Hims. The market for a user-friendly and stylish CBD brand is ripe for the picking.
But we can see from the FDA’s warning letter the brand has been backing their product with unsubstantiated claims, like CBD helping fight cancer.
Because anything intended to treat a specific disease is considered a drug, there is only one name the FDA likes to hear: Epidiolex.
Epidiolex is the only FDA approved CBD product. This makes things confusing for both customers and retailers.
Because the 2018 Farm Bill made hemp-based CBD with under 0.3% THC legal. But if Epidiolex is the only accepted CBD product, did other CBD brands really get a leg up?
It’s hard to say. The FDA has the public’s best interests in mind, but they can obliterate an entire industry with one breath.
Regulators worry about the ambiguous and harmless nature of many CBD marketing and packaging.
Unregulated products can have other questionable ingredients. Not to mention most of the CBD products you see on the shelf are much less potent than advertised.
What is Generally Recognized as Safe (GRAS)? It’s the FDA’s way of saying something doesn’t need to be regulated as rigorously as a drug does.
With CBD becoming more of a staple in food, this has the FDA’s top regulators tossing and turning.
The FDA’s main concerns about CBD as a food additive are:
- Liver Injury: During the trials of Epidiolex, liver health was affected. Because every patient was under the care of a doctor, the FDA is wary of self-administering CBD products.
- Drug Interactions: As with any drug, there is a chance of conflicting with another prescription.
- Male Fertility: Oddly enough, mice in a CBD experiment saw decreased sperm motility and testicle size.
Retailers are taking a down low approach to sell their supply of CBD products. As long as no health claims are made retailers seem to be fine.
The FDA is pushing its resources to get the word out on its stance on CBD. If it isn’t prescribed by your doctor, the FDA doesn’t condone it.
It has to do with the way food and dietary supplements are regulated.
Hemp is so versatile the FDA isn’t the only government organization that deals with it. If harvested for fuel or building material, the FDA may be standing ringside while other regulators take a hack at hemp with the legal machetes.
The good news: the FDA is very vocal about the difference between THC and CBD. They are adamant of CBD’s lack of psychoactive properties, but fear contaminates.
But addiction and CBD abuse isn’t a concern. Studies on CBD isolated from THC are still new.
Without decades of research that can only come with time, the FDA has no choice but to remain on guard about endorsing direct to consumer CBD products.
Why Does CBD Come Under the FDA’s Jurisdiction?
Anytime a product identifies itself as a cure or treatment, the FDA comes running like a pack of hungry hyenas and their attornies.
Since drugs have to get the thumbs up from the FDA before sold throughout the states, this is where we run into CBD’s current problem.
Because Epidiliox has a monopoly on FDA-approved CBD, it means any company selling state to state is technically breaking FDA rules.
Many CBD brands are in a bind: a huge appeal of CBD is improved health, but claiming health benefits makes your product a drug.
Notifying the FDA
With hemp use dating back thousands of years, it’s interesting to think of CBD as new. But according to the FDA, any food additive introduced after 1994 must formally announce their arrival to the agency.
The only exception is if the additive only contains GRAS ingredients. Since CBD is inherently not GRAS, the FDA is on it like white on a goose egg.
It’s why they’re targeting interstate CBD commerce.
Selling on the Interstate
The FDA’s biggest target is companies selling outside their home state. Because of states with medical and recreational cannabis use, the FDA’s power relies on snuffing out any interstate sales.
CBD cannot be advertised as a dietary supplement in any way. However, there is one exception to this rule.
If a product has been advertising it’s CBD content before the approval of Epidiolex, as in the case of animal feed additives.
But this isn’t the case for most startup CBD brands. And the only GRAS hemp products are the seeds and any oils or proteins extracted from them.
And even these must not come accompanied by any health claims. This would put them in that legally treacherous category of a drug.
What does this mean for topical CBD products, like creams and lotions? Because it’s not directly being consumed, topical CBD products are the stepping stone big-box retailers are taking into the CBD market.
Why are the big guys looking at CBD lotion to be a compromise the FDA will endorse in the long term?
Because most of what goes into cosmetics doesn’t require pre-market approval. As long as no medicinal claims are made there are no holds against using hemp-derived ingredients in cosmetics.
Bad Apples Are Ruining It for the Rest of Us…
Random testing by different sources proves the dire need for the FDA’s regulatory powerhouse.
Up to half or more of CBD products are listing the incorrect amount of active ingredients. Heavy metals and known carcinogens are common culprits among the same products.
What are some ways the FDA is considering monitoring what gets into our hemp supply chain?
Because manufacturing is out of the FDA’s jurisdiction, the USDA is helping out. When it comes to farming and hemp manufacturing, the USDA is setting some hard ground rules.
Hemp farmers will need to send samples of their crops to the DEA before harvesting. This expense gets taken out of the farmer’s pocket.
But the new rules will make it easier for hemp farmers to get insurance and loans. That means more hemp available at a reasonable cost.
If you’ve been confused over conflicting state and federal laws, you’re not alone. The Grocery Manufacturers Association found 76% of Americans assumed CBD products are currently regulated.
The FDA is trying to regulate a market that is passing off as groceries in some states and prescription-only in others.
Many of these same consumers still believe CBD can get you high.
Why You Shouldn’t Be Afraid to Start a CBD Business in 2020…
If you can’t see the long term returns on investing in CBD, this business isn’t for you. Even with all the controversy, laws, and confusion, consumers are still super curious about what CBD can do for them.
Market research firm Nielsen gives 5 reasons they don’t see CBD fervor going anywhere…
- Prices Will Even Out
Right now, prices for private label CBD products can vary as much as income in a developing country. You can expect to spend anywhere from a few cents a milligram upwards of 0.50 cents or more.
Nielsen sees these prices evening out as the market regulates itself. Right now retailers and brands are still in the process of gauging how much customers are willing to pay for their CBD.
- Expect More Foot Traffic
Customers are twice as likely to try CBD if they’re buying it from a reputable big box store.
While interest remains high, so does confusion. Having a presence in brick-and-mortar stores gives your line of CBD products more leverage with buyers on the fence.
Ordering online is fine for products you’re already familiar with. But even a pair of jeans from a new brand can be a long process of trial and error.
Seeing CBD products in real retailers and handling it themselves gives us the assurance others are safely using this product.
- The Medical Community Will Come Around
Lots of doctors report being asked about CBD. But the majority of them aren’t familiar enough with the legal aspects of CBD to be much help.
With billions entering the industry we can expect to see companies pushing to educate the medical community on both the laws and side effects of CBD.
- Regardless of What the FDA Decides on When It Comes to Adding CBD to Food, Demand Will Rise.
Consumers are most familiar with CBD gummies and other infused foods. Infused coffee and water are the top of Nielsen’s watch list.
- Pets Will Remain a Strong Market
With regulation moving even slower when it comes to the pet market, people still want to give their furry family members all the luxuries they can afford.
Expect sales of pet products to remain strong as the CBD manufacturing industry matures.
Years Away from Guidelines
Scott Gottlieb, former FDA commissioner gives us some insight into the process of introducing a new food additive.
With a normal ingredient, it can take up to 3 years to get through the process. However, CBD’s precarious legal positioning makes it more complex to deal with. It wouldn’t be unheard of for it to take the FDA 5 years or younger to come up with an entire CBD gameplan.
The government’s 2020 spending package only gives the FDA $2 million to regulate CBD. With thousands of products to watch over, that money will go fast.
Working with the Real Deal
What’s the best way to ensure your line of CBD products doesn’t receive a warning letter from the FDA?
Never make claims about treating or curing any diseases. Customers are plenty interested in CBD even if it doesn’t turn them into disease-fighting superhumans.
Are you serious about taking a dive into the CBD industry? But you’re worried about investing when the industry seems to change every day?
That’s why working with a CBD manufacturer handling small orders is ideal. You can get a test run of your line without risking a huge chunk of capital.
But that’s not the only reason to work with a U.S. based hemp manufacturing company. Spring Creek Labs owns all means of production.
From the time the seed hits the soil to its lab analysis, it never leaves Spring Creek’s chain of command.
They use the same quality and control guidelines the FDA requires of any company with the Good Manufacturing Practices (GMP) designation.
The best part is their minimum order is only 250 bottles. You can test the market before sinking your capital into more inventory.
If you call now you’ll have a quote within minutes. You’ll have a real product you can hold in your hands in a matter of weeks. So why wait? Email us now, we love working with new accounts.