SLEEKSCAPE'S 2022 CANNABIS & MARIJUANA MANIA GRAND SALAMI -- PART II

[sleekscape]

AN FDA-CENTRIC CANNABINOID-BASED PARADIGM FOR CBD PRODUCT REGULATION

Today is potentially a big day for CBD with the Senate Agriculture Committee Hearing on Hemp and Hemp-CBD Regulation — both the USDA and the FDA will be major participants

You can watch it live here at 9:30AM EST:
https://www.agriculture.senate.gov/hearings/hemp-production-and-the-2018-farm-bill

Because there may be an opportunity for new evidence to be gathered from the testimony at this morning’s Senate hearing, I’ve decided to hold back on releasing my comprehensive writeup containing predictions for the FDA’s framework surrounding CBD products

So in the meantime, I wanted to provide some insight into why I’ve been harping on the notion that the FDA will declare THC-Free Pure CBD products to be the first ones to “legally” enter the federal marketplace under their future guidelines

I also have an admission to make...

Another reason why I’ve been holding back on putting my framework out there is because nobody is talking about THC contained within CBD products being an obstacle to these products passing muster with the FDA

And that really boggles my mind

I simply cannot understand it

The only rational explanation I can readily generate is that the FDA has never specifically mentioned THC as being a problem in CBD products

They’ve really done a masterful job of not tipping their hand one way or the other

Perhaps another argument for THC contained in CBD Oil products not being viewed as a significant issue pertains to the fact that Congress has already federally legalized hemp, whose definition includes a cannabis plant containing no more than .3% THC by dry weight — that might appear to be a logical argument on the surface, except for the reality that the FDA currently has jurisdiction over the composition of federally permissible CBD products, and as a scientific (and political) body, why would they accept some percentage of THC in CBD products as arbitrary as “up to .3%”?

Just because that’s now the technical definition of hemp in America?

If you look into the origins of how .3% THC became the threshold for “hemp”, you will find the very definition of arbitrary

The FDA has been called many things, but in the context of constructing a framework around CBD products, arbitrary probably isn’t the most fitting descriptive term

Let’s take a minute here to get on the same page with some terminology

Epidiolex:
99% CBD
.1% THC

Let’s define the different types of CBD Oil

Pure CBD Oil (CBD isolate) = CBD Only
No THC
No CBG/CBN/CBC, etc.

Broad Spectrum CBD Oil = CBD + CBG/CBN/CBC, etc
No THC

Full Spectrum CBD Oil =
CBD + THC up to .3% + CBG/CBN/CBC, etc.


I think the largest driving force behind the idea that THC in CBD products will not be a major issue for the FDA, as long as it doesn’t comprise more than .3%, are the attorneys who work for dietary supplement companies

For several years now, these attorneys have been laser focused on this idea that Hemp Extract Oil — CBD Oil from Hemp containing CBD plus all of hemp’s cannabinoids and not more than .3% THC, also commonly known as Full Spectrum CBD Oil — is a different entity than Epidiolex (Pure CBD with .1% THC and no other cannabinoids) — and if it’s a different entity, then the FDA cannot make the claim that Hemp Extract Oil containing CBD is a pharmaceutical drug, and therefore Full Spectrum CBD Oil will have an easier time gaining permission from the FDA to be sold nationally in comparison to Pure CBD products that do not contain hemp’s other cannabinoids (the Drug Exclusion Rule argument)

Now it may be technically true that Full Spectrum CBD Oil is a different compound than Epidiolex

And it may be legally true that Full Spectrum CBD Oil is a different compound than Epidiolex

But how relevant are those arguments when the FDA’s primary duty is to protect public safety?

I have gathered a fair amount of circumstantial evidence (which I plan on discussing in the comprehensive piece) indicating that the FDA has likely come to terms with the idea of allowing a pharmaceutical drug (Pure CBD) into the food supply and dietary supplements, and if this is the case, then the only relevant matter becomes in what specific composition will the FDA allow CBD products to be sold nationally?

So the most relevant variable now becomes PUBLIC SAFETY

And that’s where Full Spectrum CBD Oil products containing up to .3% THC begin to run into trouble

— — —

WHY THE FDA ISN’T A FAN OF THC IN CBD PRODUCTS

I personally have no issues whatsoever with THC in CBD products, and like many others, I would like to see it federally permitted in CBD Oil products under the following 2 conditions:

1) It is derived from Hemp (whose very definition includes cannabis containing THC at .3% or less on a dry weight basis)

2) The concentration of THC in CBD products is kept at .3% or below

However, it doesn’t really matter what I would like to see

I’m trying to figure out what the FDA is going to do, and even more importantly for me as an investor in the CBD Oil and CBD Beverage space, predict which specific composition of CBD products will be the first one to be given the FDA’s national blessing, because I foresee a massive herd of “CBD GREEN RUSH” investors flocking to those publicly traded companies which produce these first-ever no-strings-attached federally legal CBD products... and I want to stake out a position before they arrive

The following is not an exhaustive list, but here are a few of the reasons why the FDA isn’t a big fan of THC in CBD products:

THC is a Schedule I cannabinoid

THC is psychoactive

THC has abuse potential

THC impacts motor skills, i.e. driving

THC can negatively impact the brain and have harmful effects on cognition, memory, academic performance and mental health

For the above reasons, along with many others, the FDA views THC as a threat to public health and public safety

The NIH has also spent decades funding research on the “harms” of MJ and THC, so there is a tremendous amount of research out there on the negative effects of THC in comparison to the beneficial effects

THC is also the active pharmaceutical ingredient in several FDA-approved prescription medications — Marinol, Syndros, and Cesamet

The FDA is already being asked to make an exception to their guidelines (FDCA) by allowing one pharmaceutical drug, CBD, into dietary supplements and the food supply, and adding THC (particularly above .1%) alongside CBD is asking them to make a 2nd exception by allowing two different FDA-approved pharmaceutical medications into the same OTC products, with one of these exceptions being a Schedule I substance to boot

— — —

HOW THE FDA WILL MAKE THEIR DECISION — EFFICACY AND SAFETY

The FDA is concerned primarily with two variables — efficacy and safety

In terms of the development of a regulatory framework for CBD-containing products, I’m going to utilize the phrase “public safety” to cover any potential harms to both the user as well as to the general public

FDA physicians and scientists do not base decisions on anecdotal evidence — they are going to be looking at the academic research on CBD, the vast majority of which has been performed on Pure CBD (CBD isolate) — in comparison, there is very little research on Full Spectrum Hemp Oil

Epidiolex (Pure CBD isolate + .1% THC) has generated some excellent data on efficacy, safety and abuse liability — but the CBD/THC ratio in Epidiolex is very different than what we typically see in Full Spectrum CBD Oil

For Epidiolex, the CBD/THC ratio is 99%/.1%

So there is 990X more CBD than THC

In Full Spectrum CBD Oil containing .3% THC, the ratio will vary depending on the % CBD

At 5% CBD, the ratio is 5/.3 = 17X more CBD than THC
At 10% CBD, the ratio is 10/.3 = 33X more CBD than THC
At 20% CBD, the ratio is 20/.3 = 67X more CBD than THC
At 30% CBD, the ratio is 30/.3 = 100X more CBD than THC

Because of the 3X higher THC concentration in Full Spectrum CBD Oil coupled with the much lower ratios of CBD/THC in comparison to the Epidiolex formulation, the data from the Epidiolex abuse liability studies cannot necessarily be extrapolated to Full Spectrum CBD Oil

So there are open questions about the potency of .3% THC as it relates to potential abuse liability and driving impairment, and the FDA may very well require these types of studies before approval

They will also be looking at the research on THC, as well as the research on some of the other cannabinoids present in hemp, such as CBN, CBG, CBC, etc

So getting back on track, here are the 2 most significant factors that will be investigated:

Research on efficacy

Research on public safety (side effects + potential for personal and societal harm, including variables such as abuse potential and driving impairment, respectively)

So here are the cannabinoid players:

CBD
THC
CBG/CBN/CBC, etc. (other cannabinoids in Hemp Oil)

Let’s review the composition of Epidiolex again:
99% CBD
.1% THC

Let’s define the different types of CBD Oil

Pure CBD Oil (CBD isolate) = CBD Only
No THC
No CBG/CBN/CBC, etc.

Broad Spectrum CBD Oil = CBD + CBG/CBN/CBC, etc
No THC

Full Spectrum CBD Oil =
CBD + THC up to .3% + CBG/CBN/CBC, etc.


Let’s look at the existence of research on the efficacy of these cannabinoids for the treatment of medical conditions

Is there reasonable evidence that these cannabinoids have bona fide MEDICAL EFFICACY for a variety of conditions, even if it’s not the highest level of evidence?

CBD — yes

THC — yes

CBN, CBG, CBC, etc — comparatively scant


Now let’s evaluate the research on the PUBLIC SAFETY of cannabinoids

CBD — yes, excellent safety profile (elevated liver enzymes and some garden variety side effects — nothing that couldn’t be addressed with a warning label)

THC — no, multiple concerns about safety (abuse potential, driving, negative impact on brain, etc)

CBN, CBG, CBC, etc — comparatively scant


Now let’s summarize our findings:

CBD
+ efficacy
+ safety

THC
+ efficacy
- safety

CBN/CBG/CBC
Scant evidence for efficacy
Scant evidence for safety


In terms of formulations for CBD products:

Pure CBD contains only 1 ingredient

There is only 1 cannabinoid

There is CBD and nothing else


Broad Spectrum and Full Spectrum contain many ingredients

There is a veritable soup of cannabinoids

The fewer the ingredients in any formulation, the smaller the checklist for FDA approval

Figuring out a cutoff for % purity and recommended dose for 1 ingredient like Pure CBD is the fastest path

Figuring out these cutoffs for multiple cannabinoids is more complex

Furthermore, CBD isolate is easiest to measure, standardize and replicate — Pure CBD is Pure CBD

There are other things that should be factored in — for instance, the FDA’s desire to preserve incentives for pharmaceutical companies to develop cannabinoid-based medications, so it’s possible they may see the far more unexplored yet still very promising cannabinoids such as CBN, CBG and CBC as fertile ground for drug development and may prefer to keep them off the national market for now — that’s a mark against Broad Spectrum

Another relevant factor may be how exactly the FDA throws Epidiolex a bone, aside from limiting the % of CBD and recommended dose of CBD in OTC products — another way of cutting Epidiolex a break would be by limiting THC content in OTC CBD products to less than that possessed by Epidiolex, for instance .05% or less, so that Epidiolex could maintain exclusivity on .1% THC in CBD products for a longer period of time — obviously, 0% THC would fit the bill here as well

So utilizing this evidence-based efficacy and public safety paradigm, while taking into account a variety of other factors including breadth of research evidence, measurability, ease of standardization and compositional replicability, number of cannabinoids present, time to develop cutoff scores for purity and dose, preserving Epidiolex’s status as the only CBD product containing THC, preserving incentives for the pharmaceutical industry to study CBG, CBN, CBC, as well as a variety of other miscellaneous factors, the FDA would naturally develop a clear preference to nationally legalize one specific formulation of CBD Product first:

THC-FREE PURE CBD ISOLATE

I believe that the first form of CBD federally legalized by the FDA and permitted to be sold nationally will be THC-Free Pure CBD

CANB is the only publicly traded company in the CBD Oil space that specializes in producing THC-free Pure CBD Oil products

And for that reason alone, CANB’s potential as a stock at its current price is excellent

VATE utilizes 100% THC-Free Pure CBD Isolate in its CBD-infused beverages

SIPC’s recipe for CBD-infused Beer utilizes 100% THC-Free Pure CBD Isolate as well


***I think what’s most likely to happen after the federal legalization of THC-Free Pure CBD is we will see THC containing CBD products federally permitted in a stepwise fashion over time with increasing levels of THC — from 0% to .05% to .1% and so on

*** I believe that all forms of CBD will be federally legalized over time, though Congressional legislation may be required for Full Spectrum CBD Oil products containing .3% CBD

*** Broad Spectrum CBD Oil products fall somewhere in the middle between Pure CBD products and Full Spectrum CBD products in terms of composition and therefore also in terms of likely time duration to attain FDA’s seal of approval

*** A case can be made that certain types of Broad Spectrum CBD Oil products could achieve FDA approval shortly after Pure CBD Isolate, but it would require several contingencies that I’m not willing to entertain at this point in time

I want to emphasize that this FDA-Centric Cannabinoid Based Paradigm for CBD Product Regulation has absolutely nothing to do with the issue of FDA enforcement

I believe there is a fairly reasonable probability that the immense pressure being placed on the FDA to legalize CBD products by Congress, citizens, Big Beverage, Big Alcohol, Big Food, etc may cause the FDA to punt on this issue for now and instead announce a policy of blanket enforcement discretion (utilizing “enforcement” on only those companies/products making health claims like we just saw with Curaleaf) on all CBD products containing no more than .3% THC — if that occurs, then all different types of CBD product compositions will thrive nationwide

It’s also quite possible that the FDA folds under the political pressure — 2020 is an election year with farmers and the rural vote being very important to Trump, Mitch, etc — and allows Full Spectrum CBD Oil to utilize traditional dietary supplement/food NDI/GRAS pathways

I believe this Congress will also step up and pass whatever legislation may be necessary to protect the CBD industry from overreach by the FDA


Sleek