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“Sink or Swim? – The CBD Explosion”

Will It Get There

The concept of having “pot brownies” for dessert may soon normalize as CBD infused honey, sodas and baked goods, amongst other things, continue its reach into the consumer market. Although the CBD based products more prominently advertised at the moment contain no THC, the main psychoactive compound in marijuana that gives you that high sensation, they still tout many of the same benefits people claim to experience after using cannabis. Pain relieving, disease fighting and mood enhancing; a new sector of business within the food industry designed specifically for the betterment of the mind and body. 

Yet, the sellable characteristics of this burgeoning trade have not gone without questions or setbacks from the government and healthcare community. There’s still conflicting information regarding the efficacy of ingesting CBD for health benefits, and the politics surrounding its production are causing growers, retailers and investors to sit in a state of flux. Will the future of this rapidly growing business be able to survive and thrive?

Some Background

According to Harvard Health Publishing, there is evidence that backs the many positive claims behind CBD usage. The article validates CBD as an option for people that suffer from anxiety, insomnia, chronic pain, and inflammation. It’s even proven to be a viable form of treatment for children suffering from epilepsy. The author, Dr. Peter Grinspoon, states that “the strongest scientific evidence is for its effectiveness in treating some of the cruelest childhood epilepsy syndromes, such as Dravet syndrome and Lennox-Gastaut syndrome (LGS), which typically don’t respond to anti-seizure medications. 

In numerous studies, CBD was able to reduce the number of seizures, and in some cases it was able to stop them altogether.” In fact, in June 2018 the U.S. Food and Drug Administration approved a drug called Epidiolex that’s used to treat Lennox-Gastaut syndrome and Dravet syndrome. The FDA labels this medication as “the first FDA-approved drug that contains a purified drug substance derived from marijuana.” There’s been plenty of research and commentary in support of cannabidiol usage. So, the question remains as to why it’s not on the shelves of every grocery store and in every kitchen cabinet?

Although the 2018 Farm Bill made it legal to grow hemp, there had been further guidelines presented which stipulated its usage. Producers that extract the plant resin from hemp, with the intention of selling it for CBD based products, are only allowed to do so for pharmaceutical or topical purposes. Doing so for food and drink based products have not been included; this leaves a gray area that companies have decided to navigate within, regardless of the risk. The Wall Street Journal reported that in November, 15 businesses had received letters from the FDA warning that they were violating federal regulations. 

Around the same time, the FDA published a revised consumer update, confirming the illegality of marketing CBD as a food or dietary supplement. The agency suggests that the data and information surrounding the safety of CBD usage is limited. While the benefits of CBD have been recognized, so have the potential risks and side effects associated with its usage. Furthermore, the market goes largely unchecked and the amounts of CBD (as well as THC) being advertised in certain products are not always valid. Yet, despite the FDA’s standing, manufacturers and retailers have continued operating under these circumstances. Even big brand companies, such as OceanSpray, are moving ahead bravely with the production of CBD infused products. A June report from FoodDive unveiled CarryOn, which is a brand originating from OceanSpray’s Lighthouse Innovation Incubator. How is this possible?

While there are regulations that exist at the federal level for cannabis usage in general, there are rules that exist at the state level too. As of now, there are eleven states, plus the District of Columbia, that have legalized cannabis for recreational use, and each state has their own approach towards the booming CBD industry. With a stance from the government that seems unclear, along with an incredibly high demand from consumers, it’s no wonder these CBD companies haven’t caved. And in this business, there’s money to be had. 

The Takeaway

In a 2019 report, Brightfield Group estimated that the CBD market would become a $24.4 billion dollar industry by 2025. In 2019, the industry closed the year at over $4 billion dollars. The market is thriving because people want what the market is selling to them. And, perhaps the government hasn’t put a nail in the coffin that cradles progressive thoughts on the topic because they sense a battle they can’t win. 14% of Americans currently use CBD products, primarily to support their mental health, physical ailments and insomnia. 

As the CBD market continues to pick up steam, so will the need for the FDA to finalize their stance on edibles. For CBD brands, there’s still a big chunk of the U.S. population up for grabs, the chance to make edibles a staple in the pantries and medicine cabinets of every American citizen. The Green Rush is here to stay.

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