FDA To Hold CBD Hearing Friday: What You Should Know

Following the legalization of hemp-derived CBD on a federal level in December, manufacturers of CBD-infused products will be closely watching the Food and Drug Administration's first public hearing on the regulation of CBD products.

What To Know

In an April statement announcing the hearing, former FDA Commissioner Scott Gottlieb said the agency took notice of interest in products containing cannabis or cannabis derivatives. When CBD was legalized in December, Congress gave the FDA the authority to regulate these products. 

The purpose of the hearing is to obtain additional information regarding CBD products' safety; potential risks that could stem from widespread use; and the intended functionality of CBD in these products.

In addition, the FDA aims to find out whether the amount of CBD in edibles should be limited to a certain amount without undermining the drug approval process or reducing incentives for further research into the compound. 

"It’s critical that we address these unanswered questions about CBD and other cannabis and cannabis-derived products to help inform the FDA’s regulatory oversight of these products — especially as the agency considers whether it could be appropriate to exercise its authority to allow the use of CBD in dietary supplements and other foods,"  Gottlieb said. 

Why It's Important

The hearing will include around 140 registered speakers, mostly from the hemp and CBD industries. They include Andrew Kline, the National Cannabis Industry Association's policy director.

Kline will represent a coalition of more than 100 CBD and hemp entrepreneurs, scientists and medical professionals who coalesced to "answer specific questions, to provide general context about the industry, and to highlight work that NCIA and its allies have previously done on packaging, labeling, and lab testing that could inform FDA rulemaking," the NCIA said in a statement. 

The hearing is intended to help the FDA draft regulations regarding CBD products or for ongress to pass additional legislation. It could remove a major uncertainty for many CBD companies and could open up the market to new entrants.

Despite the lack of clear regulations, CBD products have already made their way to the shelves of large retail chains such as CVS Health Corp CVS and Walgreens Boots Alliance Inc WBA. More retailers are likely to join in once they are more confident in the legal status of CBD edibles, beverages and topicals. 

What's Next

It's unclear whether the hearing will result in any decision from the FDA, although many experts and entrepreneurs suggest the FDA should move quickly and establish some rules, since it's in the best interest of both consumers and producers. 

Price Action 

The ETFMG Alternative Harvest ETF MJ was down 1.91 percent at $31.82 at the close Thursday, while the Horizons Marijuana Life Sciences Index ETF HMLSF was down 1.02 percent at $14.32. 

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