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CBD Industry Update: First Half of 2019

Since the passing of the 2018 Farm Bill, the CBD industry has exploded with economic growth and everyone from politicians to pop culture icons are getting in on the action.

In 2018, the United States saw exponential growth in CBD oil product development and sales. Halfway through the year, the World Health Organization published an impactful report in which cannabidiol (CBD) was found to be generally well-tolerated, non-addictive, and safe. By the end of 2018, the U.S. government made it legal to grow hemp, essentially laying the foundation for CBD’s future growth.

And the progress made so far in 2019 is a testament to CBD’s bright and lucrative future. From policymakers to the Kardashians, CBD research, use, and advocacy continues to progress.

So, without further ado, let’s take a look at some of the key developments from the first half of 2019!

Politics and Policy Changes

In December 2018, the U.S. Farm Bill was passed, opening up huge investment and development opportunities for hemp farmers and CBD oil producers. The bill legalized the production and interstate transport of hemp, defined as cannabis containing 0.3% or less THC, and hemp-derived products on a federal level.

In the first five months of 2019, more than $230 million was put into hemp firms, and forecasts now predict that there is the potential for the U.S. hemp-derived CBD market to rocket to as much as $7 billion by 2023. With many products still in development, this is an exciting—and somewhat confusing—time to be in the CBD oil market.

At present, consuming CBD oil remains in murky legal territory. CBD oil derived from hemp that contains 0.3% THC or less by dry weight is legal on a federal level. But CBD oil with a higher THC content, or CBD derived from non-hemp, cannabis plants, are not legal for growth or consumption in the eyes of the federal government. And the gray area just grows when you start to take into account the state-specific policies on CBD oil production and consumption.

Many states have made changes to their laws and regulations regarding CBD oil in the first half of 2019:

  • Kansas:  In May, Governor Laura Kelly, signed a bill into law allows for the use of CBD oil that contains no more than 5% THC to treat debilitating conditions as long as that patient is under the care of a physician. Prior to this, Kansas only allowed for use and sale of CBD that contained no THC.
  • Texas:  In June, Governor Greg Abbott signed House Bill 1325, which made it legal for Texas farmers to grow hemp with 0.3% or less THC content. However, regulations around testing and selling CBD products in Texas are still being crafted.

And changes have not been limited to the state level. Municipal and federal governing bodies have been active as well:

  • New York City:  The Department of Health and Mental Hygiene in NYC has instituted a ban on CBD infused edibles and beverages, stating that CBD has not been approved as safe for consumption. This ban took effect on July 1st and on October 1st, fines will be assessed to businesses that are not in compliance.
  • Transportation Security Administration (TSA):  In May, the TSA updated its “What Can I Bring?” page to include some forms of CBD oil and the one hemp-derived medication, Epidiolex, that has been approved by the FDA. This does not mean that it is legal to fly with cannabis or hemp-derived products, but it does mean you are likely able to fly with approved CBD medications. As always, the outcome is left to the TSA officer.

While the 2018 Farm Bill legalized the production of hemp and hemp-derived CBD products, and the growth of hemp is overseen by three government agencies, the Food and Drug Administration (FDA) has yet to regulate the industry. The FDA has approved some forms of CBD topicals and cosmetics that are not consumed but, at this time, continues to enforce a ban on CBD food and beverages.

Despite this ban, some of the big names in the food and beverage industry are considering CBD for their products. Ben & Jerry’s and Coca Cola are just two mega brands who have been exploring the possibility of including CBD in their products as soon as CBD oil is legalized and regulated for human consumption. Canadian cannabis company Heavenly Rx recently made a rather strategic investment in the Jones Soda company— the cannabis giant now owns 15 million shares and 39% of the beverage company with plans to drive their CBD strategy.

For now, though, the lack of FDA involvement in the industry has left even the best-intentioned CBD producers and consumers operating in an under-regulated space with very little quality control or assurance. On May 31st, 2019, the FDA held its first-ever hearing into CBD, entitled “Scientific Data and Information About Products Containing Cannabis or Cannabis-Derived Compounds.” More than 100 speakers appeared to give evidence at the FDA’s Maryland headquarters, and the docket was left open into July 2019 so that stakeholders on both sides of the argument could submit their comments.

The FDA promises to provide an update by late summer or early fall of 2019.

International CBD Policy Update

Clearly, industry leaders see an avenue for growth. Canadian cannabis giants Canopy Growth and Cornos Group have both made significant investments in the U.S. market. Canopy plans to open hemp processing plants in seven states while Cornos plans to launch CBD products to the American market in the very near future. And these moves make good sense when considering predictions that the U.S. CBD oil industry will be a $7 billion sales market by the year 2023.

Many of these same Canadian companies have invested heavily in the European market as well, setting up cultivation facilities and acquiring the appropriate licensing.

In January, the World Health Organization recommended that CBD should no longer under international control but the United Nations Committee on Narcotic Drugs (UNCND) delayed a vote on the matter. Originally scheduled to take place in March of this year, the vote will now take place in December or in early 2020.

Despite restrictions, CBD oil is available in many European countries including Austria, Belgium, Denmark, Netherlands, Romania, Spain, the UK, and Italy. Bulgaria has just become the first country to allow the “free sale” of CBD indicating the shift that is sweeping the globe. It is likely that other European countries will look to places that have legalized CBD to establish their own laws and regulations about this popular supplement. This is an ongoing process that should be monitored closely.

While the Canadian government legalized the medical and recreational use of cannabis in 2018, the laws around CBD oil remained unclear. Considered a cannabis extract, CBD could only be legally obtained through government-licensed producers to individuals with a prescription. In June, the government announced amendments to its laws, allowing for the sale of hemp plants (flowers, leaves, and branches) to licensed cannabis processors in order to supply low-THC, high-CBD products. These laws are still being finalized but are set to take effect in October.

Thailand became the second Asian country to fully legalize medical cannabis in February (behind South Korea last fall), indicating a potential sweeping change hitting the continent. While many places, like the Philippines, are still fighting a very public war on all drugs (including cannabis), it seems likely that many others will follow suit.

In March, Japan approved trials for Epidiolex, the CBD-based epilepsy medication and while China is notoriously strict on drugs, it has been heavily involved in CBD research. In fact, China produces nearly half of the world’s legal hemp. China is nowhere near legalizing cannabis but its activities in the CBD oil market suggest a significant shift in attitude is on the horizon.

CBD Oil in Mainstream Culture—Trends to Watch

As the FDA tries to map out a path to the regulation of CBD for human consumption, 2019 has seen cannabidiol become the hottest trend in food. While in years gone by, CBD has been all about oils and supplements, a recent survey by the National Restaurant Association showed that three out of four US chefs predicted that CBD and cannabis-infused food would be the hot trend of 2019.

However, it’s not just the food and beverage industry that has seen CBD products and ingredients grow in popularity.

Coming to a Store Near You

Drugstores and grocery stores across the US have been experiencing a growing demand for CBD products, and as such, some household names like CVS, Walgreens, and Kroger have begun stocking CBD products. A total of 2,300 CVS and Walgreens stores across the U.S. are testing selling a number of hemp-derived CBD products, including creams, salves, sprays, lotions, and patches. These products are topically applied and not ingested, but the development sets the scene for expansion while measuring the market for demand.

In Alabama, new laws mean pharmacies can now legally sell ingestible CBD, whereas they had previously been restricted just to selling only topical CBD products (lotions, gels, creams). Perhaps having seen the writing on the drugstore wall, the University of Maryland’s School of Pharmacy just began offering an M.S. in Medical Cannabis Science and Therapeutics.

There’s no question that the inclusion of CBD products on the shelves of these nationally recognized brands is a huge step for the cannabis and hemp industries. There may still be a considerable way to go in terms of securing a path to legalization, but while a regulatory framework is being mapped out, drugstores across the U.S. are able to conduct some market research of their own, observing how their customers react to CBD topicals.

Celebrities and Pro-Athletes

Thanks to celebrity endorsements, CBD isn’t just acceptable, it’s hip and on-trend. A few of the most notable stories include:

But CBD may have made its biggest impact on the mainstream via the basketball courts, golf courses, and football fields of America’s pro-sports leagues.

Given the risk of opioid addiction faced by many professional athletes, it is no surprise that CBD oil is being used and considered as a viable alternative for pain relief. Ice Cube’s Big3 three-on-three basketball league has allowed its players to use CBD oil and this, potentially, opens the door to acceptance in the NBA and other professional leagues.

The PGA, for example, has seen a marked rise in CBD use among tour players. The World Anti-Doping Agency (WADA) has removed CBD from its list of banned substances, but at the moment, “cannabinoids,” which includes cannabis, remain on the list of banned substances under the PGA’s anti-doping regulations. Because of the lack of current regulations in the industry, the PGA has warned its athletes to use CBD at their own risk. Because many products contain more THC than what is labeled, golfers could return a drug test positive for cannabis, jeopardizing their chances of playing.

The NFL has agreed, for now, to consider approving CBD use for its players. In May, the NFL announced a partnership with the NFL Players Association (NFLPA) to create a special committee dedicated to researching pain management treatments for the players. The NFL’s chief medical officer, Allen Sills, said part of the research would include the use of cannabis and specificic cannabinoids including CBD for pain management.

Also in May, Aurora Cannabis and the UFC announced a partnership that is expected to “significantly advance further clinical research on the relationship between 100% hemp-derived Cannabidiol (CBD) products and athlete wellness and recovery, with a view to accelerating CBD product development and education”.

Finally, the National Hockey League Alumni Association (NHLAA) has partnered with Canada-based cannabis producer Canopy Growth to study the effects of CBD oil on retired players, particularly in relation to the treatment of post-concussion neurological diseases and pain management. Over 100 former players have signed up to be a part of the study. The research will begin in summer 2019 and take about a year to complete. If positive, the findings could pave the way for wider acceptance and use of CBD among professional athletes playing contact sports.

While the country waits on the results of the FDA’s review, and more research and studies are conducted into the medical and therapeutic potential for CBD oil, the industry has nowhere to go but up.

Research on CBD Oil

One of the most talked-about pieces of CBD oil research to emerge in the first half of 2019 shocked and concerned many. An article on the study conducted by the University of Arkansas for Medical Sciences that appeared in Forbes Magazine detailed the studies findings.

The study sought to examine cannabidiol’s risk for hepatotoxicity, or liver damage, in 8-week old mice. Within 24 hours, mice who had been given a high dose of CBD were found to have liver damage, with 75% of the mice test subjects dead or near death. These findings came as a shock to individuals who have been using CBD as a ‘safer’ alternative to OTC medications.

While the results of this study went viral, this is not the first time CBD has been implicated in potential liver damage. In fact, it is one of the warnings listed on the FDA-approved Epidiolex because during clinical trials for the anti-seizure medication, some patients developed elevated liver enzymes. While it’s important to keep the risk for adverse effects in mind, it’s also worth noting that the clinical trial participants were taking 10-20 mg of CBD per kilogram of body weight. By those dosing standards, a person weighing 150 pounds would have to take about 680-1360 mg of CBD daily. To put that in perspective, most commercially sold CBD products recommend a starting dosage of 25-50 mg daily.

It is unclear whether or not current CBD oil products on the market pose a real threat to human livers. While higher doses seem to pose the greatest threat, far more research is required to determine the definitive and long-term risks associated with CBD.

Comparatively, more research is required to be 100% sure about CBD oil’s therapeutic benefits, but there were a few notable studies published during the first half of 2019 that contribute to the claims made thus far.

In a study published in June, CBD oil showed significant potential for reducing seizure frequency in dogs with intractable idiopathic epilepsy. The dogs were divided into CBD and placebo groups. The dogs in the CBD group experienced a 33% decrease in seizure frequency and CBD plasma levels were correlated to this reduction in seizures. The correlation between CBD plasma levels and seizure frequency lead the researchers to conclude that more research should be done with higher doses of CBD to determine if it’s able to reduce seizure frequency by more than 50%.

The results of a study on CBD oil and traumatic brain injury also shows a great deal of promise. Traumatic brain injuries (TBIs) can lead to neurological dysfunctions and are commonly associated with pain disorders and depressive symptoms. The study tested mice and the effects of CBD on “sensorial and neuropsychiatric dysfunctions associated with mild TBI through behavioral and biomolecular approaches.” The mice with TBI had developed chronic pain associated with aggressive and anxious behaviors as well as depressive behaviors. CBD was found to restore the “behavioral alterations and partially normalized the cortical biochemical changes,” suggesting it could be a useful tool to improve neurological dysfunction associated with traumatic brain injuries.

Research into the many potential uses of CBD oil is ongoing and interesting results are coming out all the time. As regulations around the world start to shift and take shape, there is no doubt that CBD oil is enjoying a moment of significant popularity. Keep track of our pages in order to stay up to date on the latest news and developments.

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