·
Change
is coming for a small but blooming corner of the marijuana industry.
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Cannabidiol, or
CBD, is a marijuana compound that has been linked to a range of
potential health benefits but does not get you high.
·
The roughly $1
billion CBD industry is slated to shift into high gear if the
federal government approves the first CBD-based drug, an epilepsy medication
called Epidiolex.
Change is coming for a small but blooming corner of the marijuana industry.
A compound in
marijuana that's been linked to a range of potential health benefits — but
doesn't cause a high — is increasingly being eyed for use in salves, oils,
balms, and beverages. It's also the active ingredient in a new drug that's on
the cusp of federal approval.
Cannabidiol, or
CBD, is estimated to make up a roughly $1 billion
industry. If and when the Food and Drug Administration approves
the new CBD-based
drug— a decision currently slated for the
end of June— it will turn the compound into one that can be legally
prescribed by a doctor.
That approval will
also jump-start demand for products that have not been federally reviewed,
opening up a huge opportunity for retailers and manufacturers to either work
alongside the new regulations or take advantage of the legal grey area in which
they're currently operating.
The move could
unleash what Drug Enforcement Administration public affairs officer Barbara
Carreno called a "sea change" for the existing market of less
expensive but untested and potentially risky CBD products, such as those sold
in convenience stores and marijuana dispensaries.
The drug that could revolutionize the CBD market
Since at least 2017,
drug company GW Pharmaceuticals has been presenting strong research
data to suggest that its CBD-based
medicine, a syrup called Epidiolex, can treat the symptoms of two
rare forms of childhood epilepsy that are characterized by violent seizures
(known as drop seizures).
Although the Food and
Drug Administration is not slated to make a final decision on the drug's
potential approval until June 27, experts say an official green
light is likely.
"This is clearly
a breakthrough drug for an awful disease," John Mendelson, a panel
member and senior scientist at the Friends Research
Institute, said during a public
pre-approval meeting to discuss the drug's scientific benefits
in April.
Orrin Devinsky,
a neurologist at New York University Langone Health and a lead author on some
of the GW Pharmaceuticals studies, told Business Insider, "I'd personally
be very surprised if this drug was not approved."
If Epidiolex is
approved, the DEA has 90 days to shift the classification of marijuana-derived
CBD from the current categorization as something with "no recognized
medical use" to either a Schedule 2 or 3 drug, much like the popular ADHD
medication Adderall.
Once that happens,
"all the [CBD] manufacturers have to be registered with us," Carreno
said. "That's going to make a huge difference to the industry."
A legal grey area with unregulated products that range from
teas to dog treats
That's because there
are two main sources of CBD: marijuana (which includes the leaves of the
plant), and hemp (just the stalks and sterile seeds).
While
marijuana-derived CBD is only legal in the 28 states plus Washington, DC where
marijuana has been legalized (as well as the 15 states where CBD alone has been
legalized), hemp-derived CBD falls under a sizeable legal loophole: it is
exempted from DEA regulation according to a 2006 law.
But there's a lot of
confusion in the space about which CBD products are legal or not. That's made
some CBD manufactuers skittish about selling products outside of states where
marijuana is legal.
Even so, plenty of
other CBD companies are looking to expand across the country, reasoning that
because their products are hemp-derived, they're legally in the clear.
Denver-based company
Phoenix Tears recently signed an
agreement with MarketHub Retail Services, a distributor that works with
7-Eleven franchisees, to get its hemp-derived CBD products in
up to 4,500 stores by the end of this year.
"This agreement
confirms our belief that CBD's status as a mainstream wellness option has
arrived," Phoenix Tears founder Janet Rosendahl-Sweeney said in a recent
statement.
Regardless of where
the product comes from, there's another pressing issue facing the CBD industry.
The products are poorly regulated, and so there is wide variation in content,
safety, and price.
For a 2017 study
published in the Journal of the American Medical Association,
researchers tested 84 CBD products purchased from 31 different online
retailers. Roughly seven out of 10 items had different levels of CBD than what
was written on the label. Of all of the items tested, roughly half had more CBD
than was indicated; a quarter had less. And 18 of the samples tested positive
for THC, despite it not being listed on the label.
"I've seen a lot
of dirty CBD manufacturing facilities," said Kelvin Harrylall, the CEO of
a company called the CBD Palace that
audits CBD companies and creates a list of vendors it deems safe for customers.
"It's tough to know what you're getting."
According to the DEA,
the approval of Epidiolex could change all of that.
"This is going
to be a sea change if they approve it," said Carreno.
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