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Whole Hemp Company CBD Todd Runestad

New coalition enters the hemp CBD fray, its motives unclear

Regulatory uncertainty. Class-action lawsuits. Investor impatience. COVID-19 distractions. All that, and now a coalition of drug warriors and major CPG brands enters the frothy CBD discussion. Are its motives to build the business—or shut it down?

Regulators gonna regulate, as the saying goes. Lawyers gonna sue. And while late night TV hosts and the general celebrity zeitgeist are happy to talk about the glories of CBD till the hemp farmers come home, a powerful industry trade group has entered the fray—and not necessarily on the side of the merry hempsters.

The Consumer Brands Association (CBA)—the group formerly known as the Grocery Manufacturers Association that has been trying for years to foist GMOs down the unwitting throats of the American public—on May 19 announced it has joined forces with drug warriors and police groups to advocate federal regulations to ensure major consumer packaged goods brands can get in on the market.

The Grocery Manufacturers Association’s efforts to prop up GMOs became so poisoned that the 110-year-old group changed its name in January to the Consumer Brands Association.

But it’s telling that the board members of the newly formed Coalition for Smart CBD Regulation include former members of the Drug Enforcement Agency, police and conservative politicians.

And the group’s name, Coalition for Smart CBD Regulation, shares a similar name with Smart Approaches to Marijuana, which advocates that the smart thing to do with marijuana is to make it illegal again. 

So it’s a bit unclear whether the new coalition is really about making hemp CBD regulations more certain so that major CPG brands can dominate the market, or whether it’s really of the mind that hemp and CBD are too close to intoxicating marijuana and should be taken off the market altogether.

“The public deserves transparency and accountability about CBD products and local law enforcement needs clear guidance,” said Art Acevedo, president of the Major Cities Chiefs Association, a law enforcement umbrella group and new Coalition for Smart CBD Regulation partner. “The current regulatory patchwork puts us all at a disadvantage and without additional resources for enforcement and science, public safety and public health will continue to be adversely impacted.”

Quality an issue

The group says it would like uniform federal standards to tamp down the unprofessional, “Wild West” aspect of the hemp CBD trade.

“CBD shows promise to treat pain, anxiety and seizures such as epilepsy. But the market can’t be built on inaccurate CBD levels, misleading claims and a false sense of security about safety,” says Tom Galvin, executive director of Digital Citizens, a board member of the coalition. “For consumers to truly trust CBD, they need to know that products meet safety and quality standards backed up by the FDA.”

An estimated one out of three Americans has taken the cannabis-based, nonintoxicating plant compound, according to a survey by the coalition. Its survey results, of 2,506 Americans, also found 39% of respondents incorrectly assume CBD is just another word for marijuana.

To be sure, with perhaps as many as 3,500 different hemp CBD brands on the market, the industry has issues around providing consistent, quality products. An FDA analysis found only two out of 13 brands (15%) met label claim for CBD content.

However, it must be said that the leading companies have been vetted and have passed. Two years ago, ConsumerLab.com tested 15 leading hemp CBD products, and 13 of them met label claim. These are well-known, leading brands including Ananda Hemp, Bluebird Botanicals, Charlotte’s Web, Elixinol, Endoca and PlusCBD Oil from CV Sciences.

In May 2020, researchers at the vaunted University of Mississippi selected 25 hemp CBD products from local store shelves and analyzed them to see if the products met label claim for CBD content. The researchers found only three were within 20% of label claim, while three others exceeded the 0.3% legal limit of THC, the intoxicating component of the cannabis plant. The one brand that was perfectly on point was from Functional Remedies, another well-known market leader.

“These findings,” wrote the researchers, “argue strongly for further development of current good manufacturing practices for CBD-containing products and their stringent enforcement.”

Regulatory certainty would help

Leading brands are growing or otherwise sourcing quality, consistent hemp, and developing quality, consistent hemp CBD products. They are testing the incoming raw material at every step along the value chain. Just the fact that leading hemp CBD companies are providing Certificates of Analysis on their websites is more than can be said for the larger dietary supplements market. Some are even developing expensive New Dietary Ingredient (NDI) safety dossiers in case the FDA decides NDIs are a prerequisite for bringing hemp CBD products to market.

But the FDA is still making public statements about uncertainty around CBD safety—and suggestions that it could be dangerous. This has kept large retailers from taking the plunge and merchandising anything other than topicals on store shelves.

Legislation was introduced in Congress in 2020 that would compel the FDA to allow CBD to market—yet it was widely seen as incomplete because it would still give the FDA room to demand safety assessments via NDIs if not generally recognized as safe (GRAS).

“All our momentum was going in our direction,” said Jonathan Miller, attorney for the U.S. Hemp Roundtable lobbying group and lead hemp attorney at the Frost Brown Todd law firm based in Kentucky. “So much momentum was killed by COVID.”

Miller said the FDA may consider slightly different regulatory policies between full and broad spectrum hemp. (Broad is full spectrum but with all the THC refined out. Full spectrum contains all the cannabinoids including traces of THC—under the 0.3% threshold.)

“What is really interesting,” says Miller, “is in his last communication, before COVID, the FDA commissioner said the FDA will study the issue of full and broad spectrum, and should there be different regulatory standards?”

Increasingly, states have stepped into the void left by regulatory inaction by the FDA. The latest is Virginia, which in April passed a law legalizing CBD for inclusion into foods.

You can be sure the FDA does not agree with these state initiatives.

“The FDA says they’re not ready to regulate,” says Miller. “In the meantime there are hundreds of CBD companies using all the proper GMPs, making adverse events reports, following all the rules and producing products safety- and quality-assured. There are other companies that are not doing it, and the result may endanger health and safety. Our goal as an industry is to force the FDA to regulate.”

Teeth to the wind

There is, of course, the chance that the FDA’s ultimate regulations may come closer to satisfying the Coalition for Smart CBD Regulation's perspective over that of the U.S. Hemp Roundtable. Not to mention that pharma-friendly regulations could conceivably—theoretically—knock 90% of the companies out of the market.

In the meantime, the COVID-19 pandemonium has given consumers—and late-night TV hosts—something to talk about other than CBD. Consumers are listening, and sales of hemp CBD are flat (at least in the brick-and-mortar sales channel) while immune-health supplements are up (way up).

The regulatory uncertainty is not helping any brands. Class-action lawyers have taken the FDA’s pronouncements that CBD is illegal and gone after big brands.

Also not helpful.

But merry hempsters have a certain teeth-to-the-wind risk tolerance. And despite regulator pronouncements, and legal lawsuits, and economic uncertainty, and quick-buck fly-by-nighters, and astroturf reefer madness coalitions, there is an underlying passion to the business pursuit of hemp. When the passionate turn professional, it’s hard to imagine anything other than a business success. Consumers are demanding nothing less.

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