FDA Sets Course for New CBD & Cannabis Task Force

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FDA Sets Course for New CBD & Cannabis Task Force

05/31/2019
FDA headquarters

SILVER SPRING, Md. — The Food and Drug Administration (FDA) held a public hearing on cannabidiol (CBD) products on May 31, and while no regulations were expected to come at the end of the hearing, the testimony is expected to help shape the agency's approach to CBD going forward.

The FDA did, however, form a task force on CBD and marijuana products that will focus on legislative proposals for CBD. It will be co-chaired by FDA Principal Deputy Commissioner Amy Abernethy and Principal Associate Commissioner for Policy Lowell Schiller, according to Cowen & Co.

"FDA's public meeting on CBD hasn't yet offered any new conclusions on how the agency will regulate the industry. The agency is expected to continue enforcement discretion and step in when unsupported health claims are made," Cowen & Co. wrote in a May 31 report. "A flexible regulatory approach to legally allow CBD in food and supplements will likely require additional legislation to avoid a years-long rulemaking process."

The FDA remains willing to take a flexible regulatory approach to foster the development of hemp products such as CBD. However, those actions will have to fit under the confines of current law and further legislation will likely be needed, Cowen & Co. said.

"In opening statements, Acting FDA Commissioner Ned Sharpless repeated the stance of his predecessor Scott Gottlieb — since there is now an FDA-approved drug with CBD as an active ingredient, current law stipulates that CBD cannot be added to food products sold across state lines or marketed as a dietary supplement," the firm reported.

So what does this mean for companies in the CBD space? Vivien Azer, director and senior research analyst at Cowen and Co., does not expect any immediate change.

"Given Sharpless' comments today, we do not envision a near-term change to CBD form factor availability from cannabis-based companies. While we think that companies will continue to focus on CBD vapor, topicals, and tinctures, the product offerings are unlikely to make health-based claims in order to stay off the FDA's radar," she said. "Further, companies will be restricted from developing CBD food and beverage products for interstate commerce."

She added, "while interstate commerce for food products would fall under the FDA's purview, we note that companies could still develop these products for intrastate commerce and operate within state borders that permit these products, albeit without scale benefits from interstate distribution which would likely prove expensive.

"As such, we think these products are more likely to originate from smaller, niche companies," Azer concluded.