The Future of CBD

“The marijuana industry is over-regulated. That’s why CBD is a good alternative to get into, since it’s more diverse,” says Phil Northcutt, the CEO of Sierra Gold Hemp^[1].

But that doesn’t mean the emerging industry isn’t without its chaos. If the marijuana industry is over-regulated, the CBD industry is grossly under-regulated. The culture is surrounded by misleading information, vague laws and regulations, and people just not knowing what they’re doing.

However, this is also the industry’s biggest advantage. Since it’s still new, and largely unclear, it provides an opportunity to reshape how companies function. Those that do know what they’re doing, and are agile about it, are ahead of the curve.

What to do and what not to do was the main focus of this panel at the CBD Expo Midwest in Indianapolis. Through offering advice based on their own experiences, the panelists explored the biggest concerns regarding the CBD industry, and what they anticipate its future will look like.

As someone new to the industry, I found this panel provided a clear overview of the advantages, biggest challenges, and concerns. After researching the panelists and the claims they made, I found them to be credible. However, as Gene Fein, CEO of TheraJoy Pharma^[2], was cognizant enough to interject, “don’t take what I say as legal advice.”

The first thing that must be done for anyone in the industry is to navigate those ambiguous FDA rules.

“This is a time of patience,” Fein says. The reason why navigation is so ambiguous is that the FDA is still figuring out the rules, too.  Scott Gottlieb’s^[3] resignation hasn’t helped. I think Fein speaks for everyone when he says he hopes Gottlieb’s replacement will be someone pro-CBD.

But until then, the most important thing for business’ to do is to be very careful about the claims they make. Fein advises the panel on some things a company should not do:

• Don’t say the product takes away pain.
• Don’t make any claims that can’t be backed by science.

But they should put “not approved by the FDA for consumption” on the label

 “We know it works, but we don’t know how it works.” Fein says. “The only evidence is anecdotal.”

A perfect example of this is full spectrum CBD oil. Everyone claims it works the best, and support it through concepts like the entourage effect and the endocannabinoid system. The entourage effect basically says cannabis is only as great as its parts, while the endocannabinoid system is said to be affected positively by cannabis on a broad scale.

But until these concepts are scientifically proven, and until the FDA establishes comprehensive rules, the best thing a company can do is be compliant. Furthermore, if said business’ hasn’t started producing in a GMP facility, they should start. Fein thinks the FDA is likely to insist on this in the future – which would imply there’s a good chance CBD will eventually be classified as a food additive.

But until then – if it ever happens – what should companies label their CBD infused products to make them compliant?

A tense silence follows, followed by shaky laughs. It’s a confusing space – especially since CBD edibles are currently not sanctioned by the FDA. This makes their existence a violation, but not necessarily illegal like how marijuana is^[4]. The biggest backlash edible-producing companies (including vapes and tinctures) have received are warning letters, fines, and state embargoes^[5].

Right now, the best advice is to move in an anticipated direction. That means a GMP facility and all of the right licenses.

Northcutt offers a possible solution for marketing edible products that aren't misleading or a violation. For instance, instead of marketing your CBD product as an aid for insomnia, market it as melatonin with CBD. Conveniently, there is a site on the FDA website that lists all their approved ingredients and substances^[6].

“There’s room in the market for any product.” Northcutt says. “Differentiation creates niches.”

Craig Nandoo, President of JBK Wellness Labs^[7], agrees with Northcutt about differentiation. He thinks that the more people involved in the industry, the better. That way, the industry can establish preliminaries for federal regulations to follow.

But besides the FDA and their final say, the panel was curious about other threats facing CBD.

“Lobbyists are a formidable force,” Northcut says in response. He’s referring to big pharma, which poses a very real threat. Since the cannabis industry lacks organization, it leaves room for a takeover by a big player. Similarly, the panelists expressed concern about big companies like Walgreen and CVS. Walgreens is already set to launch its first CBD products in select states ^[8].

However, it’s likely that sheer scale will reduce their product to a generic brand, leaving the demand for small, boutique products ample. Northcutt’s advice for the panelists – the majority of whom are small, boutique business owners – is to stand behind their products with confidence. A product with 100% satisfaction guarantee, along with a strong brand, will result in customer loyalty.

But by far the biggest threat, the panelists agreed, is rogue producers with low-quality output.

Rogue producers have the potential to take down the entire industry, Nandoo explains. One upset customer who hits the FDA radar will result in the FDA holding the whole industry viable. And those who are working hard, being compliant, doing their research, and taking care to produce high quality, will be overlooked.  

“Consumers are becoming aware of quality.” Nandoo says. Whatever the FDA decides, they will decide according to consumer standards.

Northcutt offers some final advice, “oversight and regulation equal quality control.”  Oversight is the equivalent to finding ways to separate from the pack by being diligent, compliant, and creative. But waiting for the green light might mean you’ve waited too long. Companies in the CBD industry, or interested in the industry, should proceed with caution, but not stasis.

In closing, the panelists agreed that now is a special time, and I can see why. There is potential to help a lot of people, but there needs to be more research, more credibility, and more standardization. This is why it is critical for both producers and consumers to be aware of where the industry is now, so that is has a future equipt to provide the benefit it claims to.