CBD Stores Booming Despite State Crackdowns

CBD Stores Booming Despite State Crackdowns

June 12, 2019

When Congress legalized CBD not only did it throw states a curveball, it also put pressure on Federal regulators to flesh out a framework for an industry that technically didn’t exist. As a result, their murky response to the rapid legalization of hemp extract CBD birthed an array of different responses among and between states. Learn more with myCBD.org

CBD Stores and CBD Demand Growing Even as New Rules are Pending

cbd rules pending

With statewide CBD laws ranging from broad and permissive to those states which have conducted raids on retailers and seizing trailers of hemp at a time, federal regulators are looking to other industries to help them asses the future of CBD stores and hemp derived CBD in the US.

At the end of May, FDA panelists reached out to pharmaceutical companies and patient organizations and asked them to give feedback about the availability of non-prescription CBD products. Ranging from topicals to pet food, CBD benefits impacted the efforts of cannabis and non-cannabis companies alike to research and work to develop CBD-based medicines. However, those companies wanting to use CBD as a medicinal product, encountered federal red tape when it comes to the process of submitting their products for testing and approval by federal bodies like the FDA and USDA.

Why All the CBD Confusion?

When it comes to confusion regarding the status of CBD, the current dilemma of both state and national regulators dates back to December 2018, with the legalization of the 2018 Farm Bill. The bill, which not only legalized industrial hemp production across the US, also decriminalized CBD and put pressure on federal regulators to draft CBD and hemp rules for farmers, producers, and companies. While the FDA has one approved product containing CBD — Epidiolex, a prescription medicine that helps children with two specific forms of severe epilepsy — the federal body asked Congress for at least a year to create federal rules that accurately reflected CBD oil’s safety, efficacy, and effectiveness, especially as a medicine or a low-dose additive to foods, drinks, supplements, and more.

While the FDA works to develop some kind of CBD industry framework, CBD products, and CBD stores are cropping up across the country, putting an onus on states to develop rules for the growing number of farmers and retailers hoping to enter the lucrative CBD market.

According to Coleen Klasmeier, an attorney with Sidley Austin LLP who works with cannabis and CBD industry clients. “State legislators and policymakers are responding to the ground truth in their own backyards and doing a range of things. More needs to happen at the federal level before anyone can do anything long term,” she said.

According to Peter Matz, director, food and health policy, Food Marketing Institute:

“Because of the consumer interest in this emerging market, and the desire of our members to provide products their customers are seeking, we are fielding more and more questions from companies that are understandably seeking clarity about the current regulatory framework for the sale and labeling of products containing C.B.D. And, while we want to be in full compliance with all F.D.A. requirements, we also want to ensure our members have appropriate assurances that the products they are selling are both safe and being sold appropriately,” he told FDA regulators in the May 31st panel. “Having said that, F.M.I. sees the regulatory challenges surrounding the legal and appropriate sale of hemp and hemp-derived products as a critically important policy issue,” he said. “And, given the prevalence of these products in the marketplace, we respectfully urge the FDA to move swiftly to provide additional clarity and establish a pathway forward.”

With a multi-billion dollar market developing in the haze of deregulation, it’s important to understand that the FDA is only responsible for one sector of CBD regulation, their domain is dauntingly large. As a result, lawmakers frustrated with CBD industry uncertainty in their respective states, have called on the agency multiple times to speed up its rules. Part of this frustration seems to be due to the FDA’s reactive approach to regulation by issuing dozens of warning letters to manufacturers making unsubstantiated medical claims but leaving much of the rest of the industry unchecked.

Per the Farm Bill, the Department of Agriculture is responsible for regulating hemp production itself and has promised to issue their framework in 2019. Other agencies, including the Drug Enforcement Administration and the Department of Transportation, have also been thrust into the CBD debate as some states have started to take aggressive steps to limit the industry’s growth.

According to lobbyist Michael Werner, who works with clients in the CBD industry. “In addition to the fact that you’ve got states moving in different directions, you got multiple federal agencies that are still trying to sort through the regulatory framework for these products. So the whole thing right now is extraordinarily confusing.”

To help with the confusion, at least somewhat, the FDA has announced a plan that “outlines a step-wise approach to evaluate the regulatory strategy to determine whether it is safe to include CBD in foods or other consumer products,” according to Deputy Commissioner Amy Abernethy. “The goal is to do this as quickly as possible without risking public health,” she tweeted.

The FDA is Still Taking Feedback on CBD from Consumers Like You

In addition to hearing from organizations and lobbyists, the May 31 hearing also gave consumers the opportunity to provide testimonials on how CBD has helped them, while academics shared their research, and entrepreneurs pointed to both the health and economic benefits of their products and the CBD industry at large. The FDA set up a docket and continues to collect statements from individuals and stakeholders that will remain open until July 2.


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