The U.S. Food and Drug Administration on Wednesday told Charlotte’s Web Holdings Inc. that its cannabidiol product cannot be sold as a dietary supplement, signaling that CBD reform may have to wait for congressional action.
Credit: Anankkml
“While we disagree with FDA’s reasoning, believing we provided extensive and credible scientific evidence that supported a different outcome, this decision affirms the path to regulatory clarity must come from Congress,” Charlotte’s Web CEO Deanie Elsner said in a statement.
The company’s bid to sell its full-spectrum hemp extract with CBD as a dietary supplement won’t be considered because of the FDA’s own prior decision to treat CBD as a drug, according to a letter posted on the agency’s website Wednesday, according to Fortune. The FDA’s latest decision rested in part on its prior approval of Epidiolex, a CBD drug to reduce seizures, which the agency said precludes it from authorizing CBD for dietary purposes.
Even if the drug hadn’t been approved, though, the FDA said in the letter to Charlotte’s Web dated July 23 that it “has concerns about the adequacy of safety evidence” that the company submitted. The agency would have wanted more data on potential liver and reproductive toxicity.
The decision isn’t expected to impact sales of Charlotte’s Web products or prevent other companies from continuing to sell CBD products. The market for CBD products has already grown to more than $6 billion as consumers seek help with everything from relaxation to focus to better sleep, according to reports. While generally an unregulated market, the FDA will periodically crackdown on companies that try to make unsubstantiated claims about the health benefits of CBD products.
Humble Specialty Products announced its latest hemp-derived product line during the Tobacco Plus Expo (TPE) trade show held in mid-May. According to a press release, the full lineup features five product formats that allow for consumers to easily identify their best method of consumption. The CBD line joins Humble’s recently launched line of hemp wraps.
Humble CBD is available in five product formats: a balm, a chewable, a dropper, a softgel and a twist.
“We are excited to introduce our products to surfers, skaters, snowboard enthusiasts and beyond as an option to incorporate into their wellness regimens,” said Daniel Clark, CEO of Humble. “Now more than ever, people are embracing energetic routines that drive them to push further each day. We know sustaining a dynamic life requires dynamic solutions, which is why Humble CBD products are designed to boost focus and help relaxation and recovery.”
Humble’s CBD products include:
Balm 1,000 mg of CBD in a 1.67 oz bottle roll-on featured in a refreshing eucalyptus mint scent;
Chewable 750 mg of CBD in a 30-count container or 100 mg of CBD in a 10-count container in assorted flavors;
Dropper (tincture) 60 ML droppers in three CBD strengths (1,000 mg, 1,500 mg and 2,000 mg) and eight flavor options;
Softgel 900 mg of CBD in a 30-count bottle or 100 mg of CBD in a 10-count pack;
Twist Six single-serve oil drops featuring 33 mg of CBD per serving; available in four flavor options.
Humble’s CBD products are lab tested, gluten free and made from industrial hemp grown in the U.S., according to the release. Humble CBD is available for purchase in select retailers and online at www.humblecbd.com. “Whether you prefer a topical, a chewable or a single serving dropper, Humble CBD is dedicated to helping you find the perfect product to fit your needs,” said Clark.
Priscilla Agoncillo, president of the Cannabinoid Industry Association, says the CBD market is poised for massive growth.
The cannabidiol (CBD) market is growing rapidly. The market is also preparing for industry regulations from the U.S. Food and Drug Administration as well as the possibility of changing rules under a new hemp bill winding its way through the U.S. Congress. Speaking during an online forum presented by TMG, a tobacco media group, Priscilla Agoncillo, president of the Cannabinoid Industry Association (CBDIA), outlined the current state of the CBD industry and what manufacturers, retailers and consumers can expect through 2021.
Estimates by New Frontier Data say the CBD market will increase from $390 million in 2018 to $1.3 billion in 2022. Additional research by BDS Analytics and ArcView Market Research suggests that CBD sales will reach more than $20 billion in 2024. CBD already comes in numerous forms, such as oils, tinctures, capsules, edibles, even topicals and cosmetics. CBD products also are expected to expand into infused beverages, suppositories, sprays, inhalers and a wide variety of hemp smokable products, according to Agoncillo. There will also be a significant increase in cosmetics and supplements that contain CBD as well as more novel drugs introduced as companies expand research and development efforts.
“In distribution channels, despite strict rules and regulations, the number of dispensaries and authorized retail storefronts that sell cannabis-based products to consumers will be opening due to new regions and states legalizing (marijuana) to meet the demand of consumers,” Agoncillo said. “Additionally, with the increase of product types, more big-box retailers will be stocking more CBD products and fostering relationships with CBD companies in research and development.”
Agoncillo expects the popularity of CBD products to continue to grow as the scientific evidence of CBD’s benefits comes to light. The research and findings will also boost efforts by companies looking to introduce new products and develop new uses for various types on cannabinoids, which will increase integration with new technology and delivery systems. There are currently an estimated 104 cannabinoids in the cannabis plant.
Looking at the top CBD trends in 2021, Agoncillo says that niche market efforts will become larger and more formalized as brands continue to seek out less crowded consumer segments. This will further diversify and differentiate each brand and allow for businesses to achieve higher returns on investments (ROIs) on exploratory segmented marketing efforts.
“Brands will move toward proven consumer packaged goods (CPG) models focused on brand family extensions, including the marriage of complementary products and product iterations. Companies will work towards developing diversified portfolios and specific consumer segmentation,” she said.” You will see brands that will follow the Procter & Gamble family of brands business model or create line extensions of existing brands.”
Priscilla Agoncillo
Moving forward, Agoncillo says that the success of the CBD market will be predicated on understanding consumer market entry and adoption trends. According to High Yield Insights, CBD gummies are the entry point for most new consumers (at a rate of 60 percent) before trying other types of CBD products. Another growing entry point is CBD-infused beverages. A recent CBD beverage study released by High Yield Insights and Innovate MR revealed just how much legroom there is in the CBD beverage segment, according to Agoncillo. Among 4,200 survey respondents, only 28 percent report finding “a CBD product brand or format that works for them,” according to the research.
“We project exponential growth in this segment [along with increased] diversity and inclusivity. Asian, Black and Hispanic consumer marketing efforts will support cultural competence, particularly among the nation’s largest brands,” said Agoncillo, citing her organization’s market expectations. “We expect to see more focus on niche marketing as consumer brand loyalty shifts toward the brands that consumers believe, respect and understand. More brands will concentrate on the growth opportunities within the Asian, Black and Hispanic consumer market, which have remained relatively untapped by CBD companies. One of the first signals of brand dominance in this segment market is the introduction of unique campaigns, specifically built to appeal to Black and Hispanic consumers, as well as Spanish-language advertising, packaging and support.”
Exploding anxiety rates and associated mental health issues, especially surrounding the Covid-19 pandemic, will also provide hemp and CBD brands with new opportunities to promote the efficacy of CBD. Agoncillo says her organization is seeing increased focus on this niche market, which can be tricky to navigate due to advertising restrictions.
“Brands are finding value in workarounds that allow them to leap over ad restrictions via targeted keyword searches; 25 percent of new market entrants purchased CBD to cope with pandemic-related stress and anxiety,” she said. According to High Yield Insights, more than 83 percent of U.S. employees reported mental health issues during 2021, and over 67 percent of U.S. employers project another mental health crisis within the next two years.
“We project heightened partnership and growth opportunities in CBD products focused on stress, anxiety and sleep. Staying ahead in CBD as a highly regulated, newly developing industry, it is important that you obtain legal counsel to assist in the understanding of changes in regulations as well as to help you keep up with the constantly changing atmosphere,” explained Agoncillo. “Keep your company in compliance with regulations, always. As many of the regulations have not been finalized to cover the entirety of the CBD industry, it is safer to always err on the side of caution by operating your company according to GMP and other top-tiered standards.”
New regulations for the CBD industry are also on the horizon. Draft rules from the FDA are currently with the White House’s Office of Management and Budget; however, review of those rules is currently being postponed by the Biden administration. Agoncillo says that no one in the industry knows exactly what those rules entail.
“It’s very interesting because I remember when that report came out; it was back in October 2020, and the media would contact us and ask for our opinions on what that report was and what the regulations are. The truth is that they didn’t release it to anyone,” she says. “Through the CBDIA, we have a lobbyist in Washington that’s dialed in and has his finger on the pulse of everything that’s happening. And they haven’t shown what those regulations are to anyone. However, we do know that it is suggested that things are moving towards GMP standards. In the U.K., they’ve adopted the novel foods application for their CBD products. They’ve moved full steam ahead there. So there’s a suggestion that it might follow that closely. But obviously, we don’t know until they actually come out. This is why it’s really important to be involved with different industry associations and different organizations because they are going to be the first to get the word of how it’s going to actually roll out.”
Another legislative change is brewing in the U.S. Congress. On Feb. 4, 2021, Congress introduced another CBD deregulation bill, H.R. 841—the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021. If passed, the bill would legalize the marketing of hemp, CBD or any other ingredient derived from hemp in a dietary supplement, provided the supplement satisfies other applicable requirements. The bill is in committee as of this writing.
Agoncillo says another important part of the success of a CBD business is participating and supporting the community. She says that owners can help their company succeed by joining and being active in relevant cannabinoid-related industry associations, attending and being present at key conferences and crafting business outreach accordingly. Owners also need to hire the right staff to help them grow.
“Keep your CBD company ahead by staying on top of the latest medical research and/or participating in the R&D to further advance the science of CBD and the industry as a whole. Hire talent with five-plus years in the cannabis or hemp industry to help navigate through the development of the CBD segment of your business model,” she says. “You will need a seasoned insider that understands the culture and can effectively translate that to your company.”
Experienced staff can help guide business owners through the smoke and mirrors to avoid pitfalls, harmful partnerships and assist in forming a proper strategy for a business model. Additionally, experienced talent will have key relationships and resources in place to assist in executing business endeavors, according to Agoncillo.
“We need high-operating brands and companies out there to apply their talents and their products and their technologies into the CBD space. The consumers need it,” she says. “We want it. And there’s no better time to really sink your teeth into this industry. And it’s very exciting because we can form this industry into what we need it to be.”
For the CBD market to thrive, it requires clear regulatory framework, a supportive government and strong consumer demand. All three have aligned in the UK this year. From a regulatory and government perspective, signals from the Food Standards Agency (FSA) and the Home Office are increasingly positive. While rightly making consumer safety the top priority, they seem to be putting consumer choice and the desire to support the development of the UK industry in a firm joint second.
Credit: Elsa Olofsson
According to an article by Tony Reeves in the The Grocer, the final ingredient – consumer demand – is certainly there. As a ‘hero ingredient’, CBD has the potential to enhance multiple categories and formats. In the soft drinks industry, for example, it could in time match the £2bn energy drinks subcategory, representing over 5 percent of the sector’s value. Another growing area is supplements. During Covid, consumers have increased their focus on supplements and health-promoting ingredients, including those providing CBD as a main component.
Still, post-Brexit Britain presents fresh opportunities for creating a vibrant and growing CBD sector. Indeed, the Taskforce on Innovation Growth and Regulatory Reform states its primary objective is to “scope out and propose options for how the UK can take advantage of our newfound regulatory freedoms”, and will report to the prime minister this month.
Against this backdrop, the UK is uniquely placed to become a leading operator within the sector and is already viewed as a key market by manufacturers across Europe and North America. An attractive market has high barriers to entry but low barriers to growth. A sensible regulatory framework, quality standards and an increasingly educated customer base is building the entry barriers. And, for the brands that can comply and deliver, the market holds endless possibilities.
The Covid-19 pandemic slowed the regulatory process in 2020, creating an expected uptick in 2021.
By Chris Howard, special to VV
After CBD’s explosive growth in 2019 following the passage of the 2018 Farm Bill that legalized hemp, 2020 began navigation of a regulatory environment in flux. Burgeoning federal and state regulation, as well as increased research into consumer trends and tastes, begins outlining the future of CBD.
The Covid-19 pandemic slowed progress in the U.S. Food and Drug Administration’s (FDA) decision making around CBD, setting up 2021 as a crucial year for the industry, although it is unlikely that any FDA regulations will be finalized this year. Vapor industry veterans, who witnessed the regulatory battles with the FDA, are rightfully wary of the government’s efforts to oversee CBD, but the initial steps seem promising. It is still early days for the CBD industry, and the FDA appears willing to collaborate with the industry on many issues that are important to manufacturers and retailers alike.
As we look ahead, I offer some thoughts on the current CBD market, where regulatory efforts are and finally, what to expect as the CBD space matures.
State of the market
After CBD’s rise to prominence in 2019, last year represented more incremental growth. According to the Brightfield Group, a leading cannabis and CBD market research provider, the United States CBD market grew from $627 million in 2018 to over $4 billion in 2019, an increase of over 650 percent. In 2020, market growth slowed to 14 percent as CBD could be found in more stores and additional uncertainty caused retailers to tread carefully. Despite this recent modest growth, the Brightfield Group projects the CBD market will continue to grow from $4.7 billion in 2020 to nearly $15 billion by 2024.
Driving this growth is a mixture of increased consumer awareness and interest as well as improved access. Sales continue to increase in key market areas, especially e-commerce, creating more competition for CBD specialty stores and vape shops selling these products. C-stores were previously well positioned to capitalize on the market, but research from Technomic, a management consulting company, shows that consumers are being selective where they shop to better hand-pick CBD products.
Chris Howard
Consumer form factor preference (the types of products available containing CBD) has been another important area of analysis. Tinctures remain popular, especially with new CBD users. Lotions have become a huge source of interest for consumers with many over-the-counter topical, beauty and skin care companies investing heavily in these products. Refining offerings will be a key part of crafting common sense regulation and helping CBD companies make more confident investments in their product lines.
Regulations in 2021
It is no surprise that the FDA took significant interest in CBD as it quickly grew from an industry valued in the hundreds of millions to one worth billions. Yet, the agency has been slow to definitively rule on any regulations apart from taking a firm stance against companies making therapeutic or health claims, especially during the pandemic.
Where does that leave us now? The FDA’s studies into CBD are ongoing, both analyzing the effects of the compound as well as auditing the contents of current products, although progress has slowed due to Covid-19. Meanwhile, there remains some pressure from congress to create policy around CBD to act as a stopgap while the FDA creates long-term guidance.
I remain optimistic that the FDA will introduce a framework for the specific purpose of regulating products containing CBD that permits the marketing and sale of all form factors in the U.S. This includes food and dietary supplements, a source of much back and forth between CBD advocates and regulators. That said, it is unlikely that a rule will be finalized in 2021. I expect this to be subject to a lot of discussion this year. We will find out more based on how the Biden administration addresses CBD in the year ahead.
In the meantime, CBD companies are forced to navigate a labyrinth of state-by-state regulations. CSP and Grocery Business research indicates 46 states have created CBD laws. State laws can run directly counter to existing federal guidelines, such as those concerning food and beverage products—which are prohibited federally but which are permissible for sale within some states. The patchwork created by these various regulations continues to make national distribution of CBD products a challenge and in some cases even threatens the supply chain of hemp growers and manufacturers.
Looking ahead
While we await final FDA guidance on CBD, I see companies in this industry dealing with many of the same issues we’ve seen over the years in the vapor industry.
The cost of entry for many in the space will become increasingly burdensome once the FDA begins setting regulations, forcing many smaller CBD companies to exit the market. This is similar to what we have seen with PMTAs in vapor, where the larger companies have been far more well equipped to maintain a compliant product selection.
Although it has not been a concern yet, CBD companies should remain mindful and vigilant to ensure that they are taking the necessary steps to prevent youth use of CBD products. Taking a proactive stance now and preventing youth use will help avoid many of the issues faced by the vapor category over the past two years.
Although there are many complex considerations with CBD, it is hard not to get excited about this industry’s future. With continued strong market growth and an apparent pathway to sensible regulation from the FDA for sellers and consumers alike, the future remains bright. In 2021, I hope to see more progress from regulators as we continue to create a strong framework that will work to the benefit this industry and consumers for years to come.
Chris Howard is vice president, general counsel and chief compliance officer for E-Alternative Solutions.
British American Tobacco (BAT) has pilot-launched its first CBD vaping product, Vuse CBD Zone.
This new range is available in three e-liquid flavors—mint, mango, and berry—and two strengths—50 mg and 100 mg. Vuse CBD Zone is initially being launched Manchester, U.K., in convenience stores and online (online purchase is geofenced for Manchester residents). Further rollout plans are anticipated for later in the year.
“With the rollout of Vuse CBD Zone in Manchester, our unique multicategory portfolio now, for the first time, offers products that go beyond nicotine,” said Fredrik Svensson, general manager at BAT U.K. and Ireland, in a statement. “CBD vaping is a new category for us, and we will be using this pilot launch to gain key learnings about consumer and retailer experiences, combined with our extensive expertise and knowledge of vaping, to help inform plans for a potential nationwide roll-out of Vuse CBD Zone later in the year.”
Koi CBD has launched its new disposable CBD vape bars. A leading brand since it began in 2015, the company says it new disposable bars offer the same convenience found in the fast-growing disposable nicotine vape bar only in a CBD-only product.
“Customers can find their products in vape and CBD shops across the country. Now they’re taking CBD vaping to a new level of convenience with new disposable vape bars,” a press release states. “Available in Tropical Popsicle, Strawberry Milkshake and Blue Raspberry Dragon Fruit, it’s easy to tell, once again, that unique flavors are at the forefront of Koi’s efforts.”
Each Disposable Vape Bar contains 100 mg of CBD suspended in 1.3 mL of flavored vape juice. Koi estimates that the vape bars will provide up to 300 puffs, based on the 280 mAh battery inside. The product contains no nicotine.
According to koicbd.com, “The Koi CBD Disposable Vape Bar is the perfect way to enjoy the convenience and portability of a pocket device without the worry, hassle, continued maintenance and upkeep.”
Koi testing labs are all “ISO accredited to assure high quality results of full-panel tests. Customers can view detailed phytocannabinoid and terpenoid profiles for every product, ensuring no detectable levels of THC (<0.001%).” Koi also states that their “products pass testing for more than 100 different contaminants including pesticides, solvents, and heavy metals.”
A $15 million strategic investment in leading global cannabinoid company Dosist was announced today by Turning Point Brands (TPB). The manufacturer, marketer and distributor of branded consumer products said the agreement includes an exclusive co-development and distribution agreement of a new national CBD brand, created in partnership with Dosist’s THC-free business unit.
Additionally, TPB has an option to invest another $15 million at predetermined terms within the next 12 months.
“The cannabis market is exploding and now is the opportune time to invest in the space and significantly expand our addressable market. With its leadership in results-oriented plant-based formulas and dose control technology, global recognition, consumer trust and scalability, Dosist was the clear choice to be our new partner in this critical growth market,” said Larry Wexler, president and CEO of TPB. “We couldn’t be more pleased to enter into this agreement with Dosist, to not only help fuel its exciting new business and co-create a completely new CBD brand for our retail partners, but also to leverage their expertise as a marketing powerhouse to help build the future of both our companies.
Gunner Winston, CEO of Dosist, a pre-eminent and globally recognized cannabis brand, said his team is extremely proud to partner with TPB on its next phase of growth and distribution. “Turning Point’s leadership team has demonstrated remarkable foresight and vision about the future and opportunity for federally legal cannabinoid products,” said Winston. “The synergy between our brands around this scope and mission is incredible and we are excited by what we will achieve together with this partnership.”
Turning Point Brands (TPB) has entered into an agreement with Wild Hempettes, LLC, the Texas based manufacturer of Wild Hemp Hempettes brand smokeable CBD.
The agreement involves long-term distribution and profit-sharing arrangement with TPB to widen national distribution of the Hempettes brand across specialty tobacco and convenience retail in the USA, according to a press release.
“With growing interest in smokable hemp products among adult consumers across the country, the ability to expand the Hempettes brand through this unique distribution partnership, and investment stake in our company with Turning Point Brands, is a huge endorsement of both the quality of our products, and clear recognition of the customer demand and loyalty we have created for the Wild Hemp Hempettes brand,” says Zain Meghani, CEO of Wild Hempettes. “The Hempettes brand has been steadily growing since its initial 2018 brand launch by Crown Distributing, and its popularity is directly reflected in adult consumer interest in high content CBD smokable hemp products that offer alternatives to traditional tobacco, nicotine and other recreational smoking products,” adds Meghani.
The company expects TPB to distribute Wild Hemp products through TPB’s 210,000 retail points of sale. All Hempettes wholesale and retail accounts will be transitioned to TPB immediately, and other Wild Hemp branded products, such as the tinctures, tonics, gummies, vape and hemp wrapper products will continue to be sold to customers through Crown Distributing and the America Juice Company.
Canopy Growth has teamed with Martha Stewart on a CBD product line. The products that will be sold online via the Canopy website and will range in cost from $34.99 to $44.99. The brand isset for a release this week after more than a year in development, CNN reports. A line of pet products is set for later this year.
David Klein, Canopy’s CEO, told CNN Stewart “brings that trusted voice” to the market.
Stewart was closely involved with the development of the products, which include gummies that resemble pâte de fruits, and flavors such as Meyer lemon, kumquat, blood orange, and huckleberry. Stewart said that she is working on a separate CBD skincare project – called 86 Elm – with a dermatologist.
The Martha Stewart brand is owned by Marquee Brands, which acquired it from Sequential Brands Group last year, along with the Emeril Lagasse brand, for $175 million. In 2018, Constellation Brands, which owns Corona and other beers, paid $4 billion for a major stake in Canopy Growth, a Canadian marijuana company.
Stewart was reportedly introduced to Canopy by Snoop Dogg and his talent agency, Stampede Management. The duo has collaborated on several projects throughout the years. Snoop’s Leafs by Snoop brand is also produced in partnership with Canopy.
British American Tobacco (BAT) has pilot-launched its first CBD vaping product, Vuse CBD Zone.
