After the Farm Bill, What's Next for CBD retailers?
After the legalization of hemp and CBD with the passing of the 2018 Farm Bill, evolving regulations provide opportunity, but create questions for retailers and consumers.
The passage of the 2018 Farm Bill in December 2018 made growing hemp – and the manufacture of its derivatives such as hemp extracts containing CBD – legal in the U.S. for the first time in almost a 100 years.
However, there is continuing confusion around FDA regulation and lack of clarity in the financial arena around banking legitimate hemp and CBD businesses. The challenge – and opportunity – for the CBD industry now is engaging our elected leaders to make them aware of public support on this issue.
As the marketplace opens up, there are still regulatory challenges consumers and retailers should be aware of:
- While hemp is no longer a schedule 1 substance, the FDA is slowly moving to establish a permanent rule on CBD. The Farm Bill of 2018 specifically expanded the definition of hemp to include “extracts, cannabinoids and derivatives.” Congress has been adamant that they intend a pathway to legal hemp derived CBD products. The FDA has indicated a willingness to comply with the legislation, but are still slow to give guidance on when they will finish their review process. Former FDA Commissioner Scott Gottlieb is advocating for pulling back on the CBD industry, and requiring supplement manufacturers to petition for New Dietary Ingredient approval for CBD. This would be akin to the process for new drug approval, would create costly and unnecessary burdens on CBD manufacturers, and drive up costs. Given past FDA actions, we expect this process will be slow, but consumer pressure on elected representatives will help, especially in the lead up to an election year.
- In the meantime, companies in the banking industry are creating difficulty for credit card processing for herbal retailers. Originally we thought this was only for CBD manufacturers, but we are now aware of herbal apothecaries that have lost processing who don't carry CBD at all.
- Some states are still raising issues about CBD access. It is important that retailers stay engaged at the local level as these rules are written and come into effect.
There is bipartisan support on the federal regulations issue as both Senate Majority Leader Mitch McConnell (R) of Kentucky, and Senator Ron Wyden (D) of Oregon, have requested the US Department of the Treasury to send out clarification to the banking industry that hemp is indeed a legal agricultural crop, and that the FDA should move quickly to finalize its rules to prevent confusion.
In the meantime, we encourage savvy retailers to take advantage of this opportunity to provide positive outreach to your elected leaders, and engage them as responsible consumers or business owners concerned about health for consumers. There will be plenty of pushback from drug companies who want to see CBD strictly sold as a pharmaceutical drug. They will spend plenty to make sure their requests are heard, but phone calls of support can matter as much to leaders. Call your senators and congressional representative and ask them to reach out to Treasury and the FDA to finalize these rules and protect access to natural, hemp-extracted CBD. If your state is considering regulations, reach out and become engaged.
Here are 5 things that consumers and health-food retailers can do to help protect access to CBD derived from hemp:
- Make yourself or your store a resource for your community on reliable, accurate info on CBD.
- Vet information you share, and keep connected to regulatory issues with reliable sources such as U.S. Hemp Roundtable, The Hemp Industries Association, The American Herbal Products Association, and the American Botanical Council.
- Stay engaged with your local politicians on CBD issues by letting them know you support safe and legal access to this herb. Make yourself a resource for accurate information and safe products. Encourage your friends or customers to contact your elected leaders when needed with suggested bullet points on what to say. Petitions and emails are great, but calls get counted and gain the most attention. As best you can, try to make your interactions positive, supportive, and encouraging for safe access to CBD as a responsible citizen. Encourage your elected leaders to allow access to safe, clean, clearly labeled CBD naturally extracted from Hemp. If your area is looking at regulation, encourage them to take the model legislation from the Hemp Roundtable as a guide.
- Only carry or buy quality brands that you can confirm their products via certificates of analysis not only for cannabioids and terpenes, but also for pesticides, herbicides, and heavy metals from third-party independent labs.
- Make sure that any CBD advertising is DSHEA compliant and within legal limits e.g. no drug or disease claims.
As more people speak up, we help ensure our access is protected. But it is on us as responsible citizens, healthcare professionals, and retailers to make our voices heard. We need reasonable rules and regulations to ensure a baseline of safety and public protection, but we also want to ensure these rules are not used to choke off a growing industry.
The Current Good Manufacturing Practices (CGMPs) for Dietary Supplements established by the FDA provide an established framework for safety and consumer protections with herbal supplements. We must demonstrate that CBD has a role to play in supporting health. Holding CBD manufacturers to high quality standards is vital, but those standards should not extend beyond those for other safe substances.
We encourage our retail partners and customers to advocate for the existing laws, rules, and regulations for herbal extracts to be applied to Hemp Extracts, to protect safe access to high quality CBD for consumers.
In order to keep our newly won freedom, we have to handle it responsibly.
Doug Williams, National Sales Director
Green Earth Medicinals
August 4, 2019