USA FDA’s Impact On CBD Market

A new report indicates the potential future impact of the USA’s CBD industry being left in limbo with regard to Food and Drug Administration (FDA) regulations.

While cannabidiol (CBD) has been legal in the USA since the signing of the 2018 Farm Bill into law, the FDA is yet to implement regulations concerning its use as a dietary supplement and food additive. This isn’t good for the industry or consumer.

A forecast from Brightfield Group – part of its 2022 Mid-Year US CBD Report – looks at two scenarios out to 2027: one where the FDA provides much-needed reform and another where it doesn’t. 

Brightfield says the US hemp-derived CBD market is expected to reach USD $5.0 billion in retail sales this year. And if FDA reforms are implemented by 2024, it expects sales to reach a whopping $11.0 billion by 2027. 

“In this scenario, we’ll see the accelerated growth of ingestible product categories, including capsules and gummies, and increased acceptance by mainstream retailers,” says the firm.

But without FDA reform by 2024, Brightfield expects cannabidiol retail sales will be $7 billion by 2027. 

“Full regulatory approval allowing CBD to be sold alongside traditional products would remove the hesitancy mass merchandisers have about stocking CBD ingestibles,” says Brightfield. “It would make it easier for current consumers to access CBD and introduce a new crowd of shoppers to the cannabinoid.“

Consumers and businesses are justified to be hesitant in buying and stocking CBD products. A number of studies shows there continues to be quality control and labelling issues – and that’s bad for all stakeholders. 

Currently, the FDA has approved only one CBD product, which is a prescription drug product to treat seizures and one other condition. The Administration continues to assert that it is currently illegal to market cannabidiol by adding it to a food or labeling it as a dietary supplement, based on a claimed lack of safety data. It has sent out plenty of warning letters to companies that do.

Some companies get around FDA-related issues in creative ways. For example, by incorporating melatonin in CBD gummies marketed as sleep aids, as the FDA has evaluated melatonin. Brightfield notes CBD gummies and tinctures are the two most popular CBD product types in the USA, but capsules and beverages have “massive potential” as well.