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The State Of CBD Regulation: Clear Rules Or Consumers At Risk?

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Both vitamins and CBD are surging wellness markets.

The U.S. dietary supplement market had a value of $124.8 billion in 2018, according to the market research company Reports and Data, while the U.S. CBD market could reach $16 billion by 2025.

Both sectors are complicated from a regulatory standpoint, and the issue is long-simmering in the vitamin space.

The Letter Of The Law

Dr. Duffy MacKay, the senior vice president of scientific and regulatory affairs at the CBD company CV Sciences, said the Dietary Supplement Health and Education Act of 1994, or DHSEA, gave the FDA authority to regulate vitamins as dietary supplements.

CBD does not fall into this category, MacKay said.

"[The] FDA has a first-to-market policy that says that if an 'article' has been already researched for a potential future drug use, then it can’t be sold as a dietary supplement. This is intended to protect drug research investments."

The FDA's expectations for supplements are clear, he said.

Yet the DSHEA limits a manufacturer from claiming it can prevent or treat diseases, but it does allow for brands to say a product can support some bodily functions and systems.

"If this distinction is too subtle for anyone but a company lawyer or a FDA regulator to understand, that is the point," according to a a 2009 SF Gate article.

"The purpose of DSHEA was to allow supplement-makers to market the health benefits of their products, with or without scientific proof."

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Two Takes On CBD Regulations

The issue appears to be a point of concern for major brands like CVS Health Corp (NYSE: CVS).

The company announced in May that it would test unregulated vitamins and diet supplements across 11 categories for safety and label accuracy in all its stores.

With the CBD market in a growth phase, concerns linger over a market that once suffered from scores of mislabeled products.

Jay Hartenbach, CEO of the CBD brand Medterra, said a lack of clarity from the FDA makes it difficult to understand how CBD "can exist as a dietary supplement," leading to reluctance on the part of retailers.

"With that being said, the FDA has committed to working quickly in establishing guidelines and to date has only sought to stop CBD companies from making exaggerated health claims."

The lack of regulations in place today could adversely impact consumer safety, said Calloway Cook, the founder of supplement creator Illuminate Labs.

"A company could put out a harmful product on the market and there is no regulatory mechanism to catch it before it causes harm."

MacKay disagrees.

“To legally sell hemp-derived CBD for ingestion as a non-drug across state lines, then you are responsible for following all of the FDA regulations for either food additives or dietary ingredients.”

The regulations are designed to ensure that finished botanical extracts are safe; tested for purity and potency; and free of harmful contaminants, he said.

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The FDA is working on a process to allow CBD sales as a supplement while also serving as a prescription drug, MacKay said.

"The likely outcome is that FDA will define a dividing line between hemp extracts with CBD, as dietary ingredients, which differentiates the ingredient in composition from the prescription-isolated CBD."

Cook said both markets will be regulated within the next 10 years.

“With improvements in technology, it's easier to set up a logistics system where manufacturers and retailers can test, audit and submit results for clearance to the appropriate regulatory agency.”

Related Links:

Cowen: CBD Market Could Reach B By 2025

Cowen's Pascarelli: CBD Market Shows 'Encouraging Signs'

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