CBD Up Close

Cutting through the CBD hype

cbd regulations

Massachusetts Department of Agricultural Resources Bans Most CBD Products

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If you are benefitting from CBD products in Massachusetts then you should start exploring other options because the Massachusetts Department of Agricultural Resources just released regulations banning most types of CBD products. From their policy statement:

“The following products are NOT approved for sale:

  • Any food product containing CBD;
  • Any product containing CBD derived from hemp that makes therapeutic/medicinal claims;
  • Any product that contains hemp as dietary supplement;
  • Animal feed that contains any hemp products;
  • Unprocessed or raw plat material, including the flower that is meant for end use by a consumer.”

Couple this with the fact that people can sell consumables with THC and you shouldn’t be surprised to find out that farmers, retail businesses, and consumers are not happy with this decision. From WCVB5 “‘An absurd dichotomy exists in the state today where you can legally produce and sell cannabis consumables, but you cannot legally produce and sell hemp consumables,’ Jim Borghesani, who served as spokesman of the 2016 ballot initiative that legalized marijuana, said.”

Why CBD Bans Continue in Some States

Honestly, I have no clue why this sort of thing happens. Since CBD is not psychoactive, why lower the regulatory boom? One possible reason would be that there are efforts being made by other industries, potentially cannabis, to tap the brakes on the CBD market.

More likely, my guess is that no governmental organization, whether it is the Massachusetts Department of Agricultural Resources or the FDA, wants to take the lead on this. Imagine this: The Massachusetts Department of Agricultural Resources approves CBD consumables and four days after that some kid chokes and dies on a lollipop laced with CBD. Of course the CBD didn’t have anything to do with the untimely death of this fictional child but there will be other people who will automatically point their fingers and cry hysterically about how CBD took this child from us.

Regulators would lose their jobs, they would miss out on any private sector sinecures that they had coming to them, and for what? It’s not like if a regulator drafts regulations that allow for the sale of products that can help people that regulator will reap any rewards from that decision. In other words, there’s not much of an upside for regulators to approve the sale of something new (and controversial) but there certainly is a downside.

What can the CBD industry do about this? Education is the boring yet most likely to succeed option. Keep on educating the public about how CBD, at the very least, doesn’t have any serious side effects and it looks like it does have at least some positive effects on people.

(And by education, we of course mean political leverage. The more people who are for CBD and are willing to base part of their voting decisions on where politicians stand on this issue can have a dramatic impact on CBD policy.)

Small Update on FDA Regulating CBD

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Last week the FDA held hearings to get differing opinions on how it should regulate CBD products. They heard from a diverse group of stakeholders in this industry but there is still a long way to go before the FDA makes a decision.

From USA Today: ” ‘There is mass confusion in the marketplace,” said Peter Matz of the Food Marketing Institute, one of dozens of speakers who addressed the FDA panel.

“Other speakers including academic researchers, businesses and consumer advocates urged the FDA to move quickly, noting that the industry is growing rapidly with little oversight. That is raising concerns about the accuracy of product labels and people not realizing how much they may be consuming through various products.

“Before the hearing began, acting FDA Commissioner Ned Sharpless noted critical questions remain about the safety of CBD, such as how much is safe to use daily and the compound’s effects on pregnant women and children.”

One way to look at this is to view the FDA as being behind the 8 ball. They need to act quickly but they won’t have a full picture of the industry, how to regulate it, and what should they actually be regulating. Why? For one, there is a lack of research on the efficacy of CBD.

How much CBD can one safely take in a day? How much CBD does someone need to take before they start seeing results? What kinds of contaminants should people be worried about? (Hemp is used to soak up contaminants, which doesn’t make it a good thing to consume unless it is tested.)

What should be done about CBD Regulations?

A simple solution would be to treat CBD products like vitamins or dietary supplements. As long as CBD companies do not make claims about how their products treat specific illnesses then their products would be treated as food products. If there is a specific claim, like in the treatment of certain kinds of seizures, then the product should be treated like a drug.

From a more general perspective, declaring specific regulations on CBD products will help the industry immensely because, right now, no one knows what to expect. Yes, there are companies already out there selling CBD products and there are traditional retailers putting CBD products on their shelves but this industry can be so much more if only the rules were clear.

FDA Takes Another Step Towards Formalizing Rules Regarding CBD

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The New York Times article discussing today’s FDA hearings starts out like a scene from a farce. Hundreds of disparate groups and individuals were in attendance to testify either for or against the further legalization of CBD products. From the NYT: “It was Hempy Pet CBD Soft Chews, Mile High Labs and Women Grow, among countless others, squaring off against the like of the Marijuana Victims Alliance, concerned primary care doctors and a lawyer who admitted he couldn’t wait to sue…”

And that’s the backdrop for the process the FDA is going through to determine the future of CBD legalization in America.

Despite the vivid picture of seeming pandemonium that befell the normally tranquil FDA offices today, the Times does say that some important things happened. For one, Scott Gottlieb, the former FDA commissioner, said “I don’t think that CBD is doing anything approximating what people are purporting is its magic quality.”

CBD Up Close thinks that while that comment from the former commissioner is somewhat hyperbolic it remains a big concern for people in the industry. We believe that in order for the CBD industry to thrive it needs to create lifelong customers and those companies that are making wildly optimistic, maybe even deceptive, claims are hamstringing that effort. If your product only has a couple of milligrams of CBD in it then that is probably not enough CBD to do anything, much less alleviate pain caused by arthritis (this is just an example).

On this site, we have gone into depth about the need for more truth in advertising in the CBD industry. We believe that those companies that make wildly inaccurate claims about their products’ efficacy may sell one or two products to a customer but once that customer figures out they purchased a product that is tantamount to snake oil they will be much less likely to purchase another product. Our best recommendation is to be humble about what your CBD-infused products can accomplish and focus on creating lifelong customers.

And please don’t take this to mean that we think that all companies in this space are going about marketing in the wrong way. There are definitely some companies that are doing a good and honest job at promoting their products. One way that we have seen companies have success in this space is by offering 100% money back guarantees to customers. That way, even if the products were hyped a bit too much customers aren’t left embittered by the process because they can always return their purchase and get their money back.

Another interesting part from the Times article was the overview they gave of the regulatory patchwork that will oversee CBD (and cannabis) products:

“Oversight of cannabis is complex and crosses several federal agencies. The federal Drug Enforcement Administration issues registrations for growing and processing marijuana for medical research. The Department of Agriculture is developing a plan to regulate hemp, although the states may also do so if they meet certain criteria.

“The F.D.A. regulates drugs, including those derived from marijuana, and it can also take enforcement action against companies selling foods or dietary supplements that have CBD or THC ingredients, which are considered drugs. But it has done so sparingly, only in cases where the companies have made what were considered outrageous health claims for their products, such as to cure cancer, Alzheimer’s disease and other illnesses.”

And CBD Up Close is confident that before the dust settles and we are living in a time where cannabis prohibition has come to an end there will be more federal and state organizations overseeing the sale and distribution of cannabis and CBD products. That’s just the way the government works.

One interesting agency that the article doesn’t cover is the IRS. We know that the IRS is absolutely chomping at the bit to get into this space and make sure that it collects taxes. With an industry that may quickly supplant the beer industry once prohibition ends, cannabis can provide billions of dollars of additional taxes to the IRS. Currently, businesses in the CBD and cannabis industries have to continue to work in what is still somewhat of a grey area so it is harder to collect taxes from these companies.

But with uncertainty comes a lot of opportunity. We have seen more and more startups coming out of the shadows and attempting to raise money from traditional funding sources like angel investors and venture capitalists. And many of them are succeeding. We have also discussed at length the growing list of retailers who are entering this marketplace despite the fact that the regulations regarding the sale of CBD or still not 100% defined.

In conclusion, the CBD industry is at a crossroads. Unless something comes out of the blue, a black swan if you will, it looks like the industry is going towards complete legalization at the federal level and likewise with many states. The question is how long and how much pain with this process take. From a lawyer for the US Hemp Roundtable:

“Jonathan Miller, a lawyer for the U.S. Hemp Roundtable, a coalition of dozens of hemp companies, told the F.D.A. panel that CBD is safe but called on the agency to police the bad players in the industry

“‘Our enemy is not the F.D.A.,’ Mr. Miller said in an interview before the hearing. ‘Our enemies are CBD companies that make false claims or sell products that are bad.’ “

CBD Up close is in complete agreement with Mr. Miller. It is over the next 12 to 24 months that the relationship between the CBD/cannabis industries and the federal government will be formed and informed for the next generation. Do we want to have an antagonistic relationship with the government or do we want to be seen as trusted partners in this legalization process? We firmly believe that this industry must opt for the latter in order to ensure long term successes.

Think of it this way, if working in partnership with the government leads to complete legalization at the federal level a couple of years earlier than would otherwise happen naturally, that would be additional years availabe to grow the industry. Current expectations show that the CBD industry could get as big as $22B within the next couple of years; imagine how big it could get if it was completely legal. The upside is tremendous.

Why you Should Not Bring CBD to the Airport

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Cannabidiol or CBD products are made from either hemp or marijuana plants. Its benefits may include decreasing anxiety, chronic pain, acne, and epilepsy. But if you’re thinking about bringing CBD to use to help quell your anxiety on your next airline flight, think again. It’s not a good idea to bring CBD to the airport–at least the way things are now.

Just like THC, which is the element in marijuana that makes you high, CBD has some significant legal entanglements–or at least some legal conflicts or misunderstandings. To be clear, CBD doesn’t get you high, but its legal standing still is in question.

Everyone seems to be using CBD in some way. Some drink it in their lattes, some eat it in their sweets (CBD gummies), some get it in the form of honey, and some rub it on their body in lotion. Even pets are getting in on the action, with numerous CBD infused treats for nervous dogs and cats abounding online. Interesting times, indeed.

It may seem that CBD is accepted by all levels of society, but there can definitely be ramifications for its possession, which is why you don’t want to bring CBD to the airport if you’re traveling. CBD has no regulatory standards and its legal standing is dubious, even though you will soon find CBD products in CVS. It’s all a bit confusing.

Travelers in Dallas have received felony charges for CBD possession, restaurants in New York that put CBD in food are being penalized legally if they are caught, and there are more cases across the country. It’s not that airports are coming down particularly hard on travelers–the fact is that there is no clear regulatory oversight and no governing body that controls and enforces standards on CBD products and labeling, leaving U.S. Customs and Border Patrol agents to essentially do the best they can.

In other words, individual officers may not fully grasp the distinction between THC and CBD products and indeed CBD, even though it is no longer a schedule 1 controlled substance, is still considered illegal by the FDA. And since there is no regulatory oversight, some products may contain enough THC to gain the attention of drug-sniffing dogs.

Once things settle down and people (and governmental bodies) learn that CBD is not the same thing as THC, it will be safe and legal to bring CBD oil or gummies through airport security. But for now, it’s a good idea to leave it at home.