Last week, the Food and Drug Administration (FDA) issued guidance on CBD that has widespread ramifications for the industry. In short, the FDA has determined that a CBD product marketed as offering therapeutic effects is a new drug that must be approved prior to sale.
The FDA also indicated that CBD products are not dietary supplements, and may not be sold on the internet as such. The FDA issued warning letters on March 28, 2019 to stop three CBD companies from selling products, including gummies, due to unsubstantiated health claims. The companies marketed the products as therapeutic remedies for arthritis and dementia and other ailments. The FDA stated that it will continue to monitor the marketplace for other product violations, and it will issue warning letters when necessary. The FDA responded to a question related to the availability of CBD products online by stating:
“FDA continues to be concerned at the proliferation of products asserting to contain CBD that are marketed for therapeutic or medical uses although they have not been approved by FDA. Often such products are sold online and are therefore available throughout the country. Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective. This deceptive marketing of unproven treatments also raises significant public health concerns, because patients and other consumers may be influenced not to use approved therapies to treat serious and even fatal diseases.”
What does this mean for the CBD industry?
The CBD market raises complex issues with a new twist each week. There are many issues that remain outstanding including the sale of CBD products that do not claim therapeutic benefits. The FDA’s move may push the CBD industry off of the internet and into the state cannabis ecosystem. CBD retailers and manufacturers may need to replicate the THC model by creating vertically integrated markets in states where it can be legally produced and sold, and avoiding risk by selling products in licensed dispensaries. Producers should avoid transporting CBD across state lines until states provide guidance on how this can be done. Producers and retailers should also review marketing and product labels to ensure compliance with the FDA’s recent guidance.