A matcha shop that offers drinks with drops of CBD oil.
Angelica Lavito | CNBC
The Food and Drug Administration will hear from CBD manufacturers, researchers, farmers, retailers and more on Friday as the agency holds its first public hearing looking at the sale of what’s being touted as a magical elixir that can treat everything from inflammation to epilepsy.
Congress in December legalized CBD, or cannabidiol, derived from hemp. The nonintoxicating cannabis compound is being added to just about everything, including makeup, tea, pet treats and soft drinks — even though the FDA has expressly prohibited companies from adding it to food, beverages and dietary supplements.
The industry is booming and has the potential to become a $22 billion business by 2022, according to cannabis-focused research firm Brightfield Group. Companies are pressuring the agency to change its rules to allow them to legally add CBD to food and beverages.
“Interest continues to skyrocket,” said D.C. attorney Miriam Guggenheim, co-chair of the food, drug and device practice group at Covington & Burling. “It is mainstream, interest is mainstream. It is not fringe anymore, which doesn’t mean mainstream companies are ready to jump in. But they want to be prepared to do so once the legal landscape is clarified.”
David Spangler, senior vice president of policy and general counsel of the Consumer Healthcare Products Association, said he hasn’t seen so much interest in an issue he’s worked on since 2007 when pediatricians urged the FDA to ban cold and cough medicines for children under age 6.
The FDA, which is taking public comments on how to regulate the industry through July 2, has some 140 people scheduled to testify Friday. Drafting and implementing a rule could take years, officials have said.
“I think a lot of people are holding out what I consider somewhat false hope that we’ll come out of this hearing with all the answers to our burning questions,” said Jonathan Havens, co-chair of the cannabis law practice at Saul Ewing Arnstein & Lehr.
Former FDA Commissioner Scott Gottlieb formed a working group in April to evaluate how to regulate CBD. They’re examining the potential risks, including the affect on the liver from long-term use, principal Deputy FDA Commissioner Amy Abernethy said in a tweet last week.
The agency has focused its CBD enforcement on companies that make “egregious” claims, like using it to treat Alzheimer’s, cancer and other diseases it’s not approved for. It issued warning letters to three companies earlier this year.
Regulatory uncertainty hasn’t stopped countless companies from adding CBD to food and beverages, though it’s kept most large companies like Coca-Cola and PepsiCo on the sidelines for now.
The Consumer Healthcare Products Association is lobbying the FDA to regulate CBD similar to Vitamin C, possibly establishing guidelines like dosage levels it deems safe for over-the-counter use, Spangler said.
Numerous studies have found some products don’t live up to their claims — sometimes containing too little CBD, too much or none at all. Some CBD products even contain enough THC to produce a high.
In doing nothing, the FDA has allowed more than 1,500 new CBD products come to the market over the last three years, said Daniel Fabricant, CEO of the Natural Products Association in Washington, D.C.
“These companies aren’t your Fortune 100 companies. These people in a lot of ways are fly by night,” he said. “That’s not how a regulatory agency should work.”
Looking for clarity
People looking for clarity will not get that Friday. The public hearing is simply a listening session for regulators.
Abernethy said in her tweet that the FDA will communicate “lessons learned and next steps as quickly as possible after each step.”
The FDA could decide not to act at all and ask Congress to legislate a fix, something Gottlieb floated to lawmakers earlier this year.