How the FDA Plans to Deal With Hemp Now That It's Legal

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Mar 05, 2019, 13:25 ET

LOS ANGELES, March 5, 2019 /PRNewswire/ -- The Food and Drug Administration (FDA) is considering what it terms "potential regulatory pathways" for the interstate commerce of hemp and cannabis compounds in foods and beverages. This follows the renewal of the Farm Bill signed by President Donald Trump on Dec. 20, which legalized the commercial production of hemp.

The legalization of hemp production is yet another product of the wave of change that has all manner of cannabis companies preparing for the massive increase in demand for the plants including leading providers like Aphria (TSX: APHA) (NYSE: APHA), Canopy Growth Inc. (TSX: WEED) (NYSE: CGC), and MedMen (CSE: MMEN) (OTC: MMNFF).

With this news in hand, the CBD products sector is expected to grow significantly. One stand out in this area is The Yield Growth Corp., which holds multiple interests. The Yield Growth Corp. (CSE:BOSS) (OTC: BOSQF) is a major new participant and brand incubator for the growing cannabis beauty and wellbeing sectors, with a significant portfolio of innovative products for legal jurisdictions and those growth areas with legalization pending.

In this new market environment, the FDA will pose as a qualifier for many of the new products. They expect to be a harbinger of the law.

Surprise: the FDA will start by holding meetings

For starters, agency head Gottlieb says the agency plans to hold a public meeting "in the near future" to hear from stakeholders about their experiences and challenges with the products, including any safety-related concerns.

"We'll use this meeting to gather additional input relevant to the lawful pathways by which products containing cannabis or cannabis-derived compounds can be marketed, and how we can make these legal pathways more predictable and efficient," Gottlieb said a public statement.

"We'll also solicit input relevant to our regulatory strategy related to existing products, while we continue to evaluate and take action against products that are being unlawfully marketed and create risks for consumers."

The CBD and hemp Industries are not waiting

The official word on food and drugs is "Cannabis and cannabis-derived products claiming in their marketing and promotional materials that they're intended for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases (such as cancer, Alzheimer's disease, psychiatric disorders and diabetes) are considered new drugs or new animal drugs and must go through the FDA drug approval process for human or animal use before they are marketed in the U.S.," according to the FDA.

In the meantime, food and beverage makers aren't standing by when it comes to introducing the CBD and hemp products. Besides being used to infuse beverages such as water, coffee, tea, beer and wine, CBD is being added to all kinds of other foods, including ice cream, salads, milk and even children's cereal and pet treats. Other recent innovations containing CBD include things like Spring's line of CBD-infused sodas sold in New York, Florida, Nevada and Illinois.

Of course, the large food manufacturers seem to be acting with caution before rushing to add CBD or hemp to their products. But as more players enter the industry and new products start to gain traction, that is likely to change rapidly.

Wellness market is a prime opportunity

The wellness market is even bigger than the cannabis market is going to be any time soon. At present, this means that the wellness industry is worth about $4.2 trillion worldwide.

An innovator that has already anticipated these changes is The Yield Growth Corp., whose unique approach aims to sell its base products nearly anywhere in the world, and then capitalize on markets that legalize recreational use of THC or CBD. In this way, they are opening new markets with the legalization as a pathway to larger market share.

With its Urban Juve brand, The Yield Growth is targeting an audience that knows what it wants. Their products are thoughtfully branded and marketed "honestly". These are products anyone can obtain and use now (prior to CBD/THC legalization) and, as they are consumable, these are products anyone who uses them may choose to move "up" to a more expensive, THC or CBD "enhanced" version as these ingredients are approved and the product lines expand.

The Yield Growth Corp. (BOSS – BOSQF) has multiple major brands to provide a broad portfolio in the developing CBD space. Urban Juve currently boasts nearly 50 different products launching in 2019. All of these products may offer CBD infused or THC infused versions in the future.

CBD and hemp finding favor

The market for CBD and hemp-derived products is already significant, and manufacturers and marketers are gearing up business on a national scale. A New Frontier Data report found that U.S. CBD sales jumped almost 40% in 2017, hitting $367 million. The total retail value of all U.S. hemp products last year — including food — was estimated at roughly $820 million. That's according to the Agricultural Marketing Resource Center.

These sales gains are expected to continue their upward trend. By 2020, hemp-derived CBD is projected to be a billion-dollar market, according to a report from the Brightfield Group that researches the hemp and CBD trends. This helps to explain why the FDA is striving to make its regulatory oversight clear to all stakeholders "as soon as possible".

As an important aside, it's worth noting that the new congressional session getting underway, there could be a move to legalize CBD in all food and drink products nationwide. That would only take place once a revised oversight and safety framework is in place.

Companies with interest in the legal hemp and CBD business, often from Canada where cannabis is completely legal, will likely see the greatest early growth and market gains from new legislation and FDA support, including:

Aphria (TSX:APHA) (NYSE:APHA) bills itself as one of Canada's lowest cost producers, that produces, supplies and sells medical cannabis. Located in the greenhouse capital of Canada, Leamington, Ontario, Aphria provides pharma-grade medical cannabis, and quality patient care.

Canopy Growth Inc. (TSX: WEED) (NYSE: CGC) is the world's largest diversified cannabis company. Canopy boasts a wide offering of distinct brands and curated cannabis varieties in dried, oil and capsule forms.

MedMen Enterprises Inc. (OTC: MMNFF) (CSE: MMEN) operates as a cannabis company in the United States. It owns and operates 18 licensed cannabis facilities in cultivation, manufacturing, and retail located in California, Nevada, and New York.

For a more information about The Yield Growth Corp. and legal hemp businesses see the article at: http://usanewsgroup.com/2019/01/15/the-sleeping-giant-for-2019-just-woke-up-and-its-a-game-changer-for-investors-looking-to-diversify-into-a-multi-billion-dollar-sector/

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