OCTOBER USDA & FDA CBD REGULATIONS — THE HOLY GRAIL FOR PURE CBD INVESTORS ONLY
The absence of legal clarity around the CBD sector has acted to dampen investor excitement and hype around the still technically federally “illegal” CBD industry in America thus far in 2019
In the absence of USDA & FDA Regulations that would once and for all “legalize” the Hemp & CBD industry, the media and the average investor continue to view Hemp & CBD as if it were MJ & THC, fearful of a federal crackdown on an industry which was actually created by the U.S. Congress
This is Twilight Zone stuff
The agencies actually capable of any crackdown — the DOJ and the DEA — have already stepped aside because Congress legalized and removed Hemp and all of its cannabinoids from the Schedule of Controlled Substances
And Hemp Legalization happened because of Republicans, not Democrats, so the Republican-dominated FDA isn’t out to double cross their own political party
This was a 100% Mitch-engineered phenomenon, though it’s one that currently has near-unanimous support from both political parties and nearly every state in the union
The FDA isn’t a crackdown agency — they are a regulating agency — which is why CBD products of all formulations are currently found literally everywhere, even though the FDA has been stating since 2015 that they are all federally illegal
So why does there continue to be this fear around what the FDA is going to decide to do with the CBD industry?
Is it completely misguided and simply a manifestation of shell shock from the years of MJ-related setbacks due to federal government agencies putting up roadblocks every time it had appeared that MJ was about to take the next big step towards federal legality, as happened most famously with Jeff Sessions’ rescission of the Cole Memo?
I think the answer is that most of the fear surrounding the CBD industry is misguided
But NOT ALL of it
The sole element that can rationally engender fear and uncertainty in the CBD product industry concerns product formulation — which product formulation is the FDA going to federally legalize and allow to be sold nationally?
And on the other hand, which product formulations are going to remain federally illegal and be ineligible for national sales?
So let’s once again take a quick look at the range of CBD product formulations
Pure CBD products (CBD Isolate) = CBD only
Full Spectrum CBD products = THC + CBG/CBN/CBC + CBD
Broad Spectrum CBD products = CBG/CBN/CBC + CBD
CBD doesn’t possess any of the safety issues that come with THC — driving impairment, cognitive impairment, ER visits due to psychosis/paranoia/anxiety, effects on the developing brains of adolescents, etc.
So Pure CBD products don’t possess any of the potential safety issues that come with THC-containing Full Spectrum CBD products
Let me repeat that because of its importance
The FDA views Pure CBD products as being safe for public consumption — Dr. Gottlieb has admitted that much (at low doses and low concentrations with proper labeling and no health claims)
That is the entire crux of my investing strategy in the CBD sector
The FDA views Pure CBD products as being safe for public consumption
However, the FDA views THC-containing Full Spectrum CBD products as being unsafe for public consumption
In terms of THC-Free Broad Spectrum products — CBG/CBN/CBC + CBD — all we have right now is a big question mark
The safety research on the other cannabinoids present in Hemp, like CBG/CBN/CBC, is practically non-existent
So nobody knows with any scientific certainty whether or not it’s safe to allow these cannabinoids in CBD products
Moreover, the pharmaceutical industry’s interest in researching CBG/CBN/CBC is growing rapidly — they do want to explore the possibility of creating prescription pharmaceuticals out of these cannabinoids — and the FDA wants to make their exception of allowing a cannabinoid, CBD, to be sold as both a pharmaceutical drug and an OTC product a one-time exception
So the FDA has 2 reasons to keep Broad Spectrum products off the market — no safety data and preserving incentives for pharmaceutical drug development
In summary, all signs point to the FDA only giving the green light to Pure CBD products
CBD products containing THC are at risk of the FDA condemning them to be sold only intrastate, just like THC-containing MJ products — though the former products are sold in all types of stores, whereas MJ products are strictly limited to dispensaries, so there will still remain a huge difference in the investability and market size of THC-containing Hemp-derived CBD products (better and larger) in comparison to THC-containing MJ products
CBD products containing CBG/CBN/CBC are also at risk of the FDA condemning them to be sold only intrastate as well
Now I’m not saying this will always be the case for Full Spectrum and Broad Spectrum CBD products
Future Congressional legislation explicitly legalizing all Hemp-derived products, including those containing THC and CBG/CBN/CBC can render the FDA’s viewpoint and thought process virtually irrelevant
But right now, as we all await the FDA’s regulatory framework and/or enforcement discretion strategy for the CBD industry in October, the only thing that matters is which specific formulation the FDA will render safe for public consumption, federal legalization and national sales
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