latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/fda-hearings-on-cbd-products-prompt-talk-of-wild-west-52136115 content esgSubNav
In This List

FDA hearings on CBD products prompt talk of 'Wild West'


Insight Weekly: Sustainable bonds face hurdles; bad loans among landlords; AI investments up


Master of Risk | Episode 3: Live from the Global Credit & Risk Symposium


Next in Tech | Episode 116: Securing Digital Experiences

Volume of Investment Research Reports on Generative AI Skyrocketed in Q1 2023

FDA hearings on CBD products prompt talk of 'Wild West'

Food manufacturers and retailers are operating in a "Wild West" as they manufacture and sell products containing cannabidiol experts said at the U.S. Food and Drug Administration's first public hearings on the products May 31.

Taming that wildness will involve reining in companies engaged in selling products with unsafe levels of cannabidiol, or CBD, and other compounds. It will also necessitate additional research to determine what constitutes an unsafe level and answer other questions, experts said. Additionally, they called for clearer labeling standards for CBD products.

"While we have seen an explosion of interest in products containing CBD, there is still much we don't know," acting FDA Commissioner Ned Sharpless said during the hearing. The FDA will continue to accept written testimony, including additional detail and data, through July 2.

For retailers and food companies, one key will be establishing labeling and quality control standards, from designating laboratories trusted to check products' claims against their contents to determining safe trace levels of other compounds, such as psychoactive tetrahydrocannabinol, or THC, in edible products.

While THC remains illegal at the federal level, the Agriculture Improvement Act of 2018, colloquially known as the Farm Bill, allows the cultivation of hemp, a cannabis relative that contains CBD.

Even before that, state laws allowing cannabis for medical and recreational use led to a rise in popularity for CBD products. But those conflicting regulations have also created "mass confusion" for food makers, retailers and consumers, Peter Matz, director of food and health policy for the Food Marketing Institute, said during the hearing. The institute's members include The Kroger Co. and other U.S. grocers.

Researchers, meanwhile, say the patchwork of state laws and tight federal controls on cannabis research have made them unable to support or refute most claims about the benefits or pitfalls of CBD.

"We need to get ahead of the curve on what's going on in the public," said Igor Grant of the Center for Medicinal Cannabis Research at the University of California, San Diego.

Researchers also say scientific analysis of widely available CBD products shows products often do not contain the amount of CBD listed on labels. That includes products with up to seven times the amount of CBD as indicated on the product's label or products that claim to contain the compound but have no trace of it all.

A study conducted in Mississippi tested 25 products containing CBD and found nearly all contained levels of the compounds that did not match the product labels, said Bill Gurley, a professor at the University of Arkansas for Medical Sciences.

"Clearly, many CBD products have little or no relation to any potential benefits of CBD itself, and pose a range of risks to consumers from fraud to serious health damage," Gurley said during the hearing.

A separate analysis of products by the Clean Label Project featured on popular CBD-related websites and Inc. bestseller lists also found a wide discrepancy between the amount of the compound in a product and the level indicated on the packaging, said Jaclyn Bowen, executive director of the consumer group.

"We see products that have zero CBD" despite label claims to the contrary, Bowen said.

Such studies demonstrate that the FDA is "playing catch-up," according to William Acevedo, an attorney at Wendel Rosen and co-chair of the firm's food and beverage practice group. Acevedo, who spoke with S&P Global Market Intelligence by phone, has discussed CBD products with clients and others in the food industry. He said that the current patchwork of state regulations and prohibition on the federal level create "a challenging maze for businesses."

A lack of research on the effects of CBD and other characteristics of the compound makes decisions about developing and selling the product difficult for companies, Acevedo said. But with so many products already on the market and funding sources for new research not immediately clear, it may be up to the FDA to "triage" existing players, including going after more manufacturers making wild claims about their products in an effort to deter others.

"I could see the FDA trying to make examples of some bad actors with some enforcement proceedings," Acevedo said. In April, the FDA sent warning letters to some CBD product makers that it said were making unsubstantiated claims, threatening to sue them if they did not cooperate.

Food producers and retailers are not waiting for regulators to introduce new products to the new market.

Unilever PLC-owned Ben & Jerry's intends to introduce CBD-infused ice cream "as soon as it's legalized at the federal level," the company said in a May 30 statement. Retail pharmacy chains CVS Health Corp. and Walgreens Boots Alliance Inc. have already introduced CBD-infused creams and oils to their shelves.

Acevedo said that retailers like CVS and Walgreens vet CBD products in a similar manner to over-the-counter medications. With their own reputations on the line — and potential FDA action if they sell CBD products that are not as described — such retailers can hold suppliers liable for faults in the products.

"The U.S. [Marshal] can't be everywhere in Wild West," Acevedo said, "so [it] has deputized" retailers like CVS and Walgreens to determine who the most reputable providers are.