With the passing of the 2018 U.S. Farm Bill, the production of industrial hemp and its derivative products, such as CBD, became legal at the Federal level. CBD, unlike THC, produces no psychoactive effect (or “high”) and many studies have demonstrated its potential to foster a number of general health benefits for regular users.
States quickly followed the Farm Bill passage, creating regulatory schemes to foster the commercial growth of hemp and the manufacture and sale of CBD-based products. Our company, Green Rock Hemp Holdings, LLC, a vertically integrated grower, processor, and seller of CBD-based consumer goods, appreciates the effort states have made to nurture this nascent marketplace.
However, despite state-level efforts, hemp farmers, small businesses, and CBD consumers are struggling due to the failure of the Food and Drug Administration (FDA) to legally recognize and regulate the sale of hemp-derived CBD products. Therefore, we believe it is critical for Congress to pass H.R. 841 and S. 1698, The Hemp Access and Consumer Safety Act, which would establish a legal and regulatory pathway for the sale of hemp-derived extract products such as CBD as dietary supplements and food and beverage additives.
Regulatory uncertainty has led to a sharp decline in hemp prices and economic hardship for hemp farmers. Meanwhile, a multitude of CBD products continue to be sold, some of which raise significant quality, safety, and other consumer protection concerns.
Even a cursory review of the internet demonstrates confusion and abuses the regulatory mission of the FDA is entrusted to address. While many brands make the best effort to correctly label their products, the determination of which set of regulatory rules apply, how to apply those rules to the myriad of product types, and how ingredients (including the cannabinoids themselves) should be treated all leave manufacturers guessing.
In addition to labeling, claims made regarding CBD and other cannabinoids’ health benefits have created confusion. The lack of rigorous enforcement leaves legitimate companies following the rules, and less ethical companies making wide and outlandish claims that greatly distort CBD’s potential benefits to consumers looking for real health solutions. Worse yet, periodic market surveys find that many CBD products and brands do not even contain the amount of CBD advertised on the label or the website. Such snake oil tactics spoil the user experience and taint a potential customer for life.
The hemp industry is the most recent example of the commercial marketplace outpacing regulatory governance – this time to the detriment of business and consumer interests. Treating CBD-based products as dietary supplements and food additives would provide the guidance needed for industry players, protect consumers, and further legitimize a perfectly legal industry. FDA regulation will also make way for increased use of CBD in more products, and delivery systems created by a larger array of market participants.
By designating hemp derived CBD as a dietary supplement, these bills would require CBD and hemp extract product manufacturers to comply with the entire existing comprehensive regulatory framework for dietary supplements, which ensures that the products are deemed safe, properly labeled, and prepared utilizing Good Manufacturing Practices. Again, promoting and fostering ethical business practices and consumer safety.
Recognizing CBD as a dietary supplement and food additive will open up a potentially $16,800,000,000 market by 2025. Federal oversight will bring increased and stable demand for industrial hemp, providing U.S. farmers with a diverse cash crop. Businesses, from the entrepreneur to the Fortune 500, will have the legal assurance of dealing with a legitimate ingredient, and the end-consumer will have the peace of mind knowing that labels and claims meet the high standards U.S. consumers rely on and trust.
This legislative approach is good for agriculture, good for business, and good for consumers. Please contact your representatives and ask them to support H.R. 841 and S. 1698.
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