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CBD madness – at a supermarket near you
Through a special arrangement, presented here for discussion is an excerpt of a current article from Frozen & Refrigerated Buyer magazine.
At the end of last month, the FDA sent out warning letters to 15 companies it says are illegally selling products containing CBD (cannabidiol). Unable to deem CBD as “generally recognized as safe,” FDA basically warned that selling CBD-containing food and drink is still against the law.
So how come it’s all over supermarkets across America? How come CBD trade shows are sprouting up like weed? How come “experts” say the global CBD market will skyrocket from $311.7 million this year to $1.25 billion by 2024? This much we know:
- The FDA has approved only one CBD product — a prescription drug for severe epilepsy.
- It’s against the law to market CBD by adding it to food or labeling it as a dietary supplement.
- The limited data that FDA has seen about CBD safety suggests health risks, including liver injury, drug interactions, changes in mood, etc.
- Some CBD products are marketed with unproven medical claims and are of unknown quality.
The FDA says it is moving “quickly,” but it has been slow in its research, some say. Of course hemp farming was only legalized in the 2018 farm bill. Meanwhile, it’s estimated that there are more than 1,000 CBD-infused products already available online.
Ben & Jerry’s, in a statement in May, predicted that “CBD Ice Cream Is (Maybe, Hopefully) Coming To A Freezer Near You!” It went on to say that, “Currently, the FDA prohibits adding CBD to food and beverages. But change is on the horizon: They’ve set a public hearing on the legalization of CBD-infused foods and beverages for May 31st, and we’ve submitted a comment to them in support of legalization.”
Uh huh. I might note here that circa 1968, my college roommate and I, while sharing a joint, would often debate when marijuana would become legal. We figured about five to 10 years. We were way too optimistic.
CBD proponents insist that the FDA is relying on toxicity testing based on doses that are thousands of times higher than normal usage. But the jury is still out. And, IMHO, CBD should be out of your stores, too.
Discussion Questions
DISCUSSION QUESTIONS: Do you see more potential benefits than risks in food retailers embracing the CBD trend? What advice would you have about exploring the opportunity?
Poll
BrainTrust
Neil Saunders
Managing Director, GlobalData
Paula Rosenblum
Co-founder, RSR Research
I have heard the rumors of CBD Coca-Cola and CBD Oreos — but, as noted, more discussions have to be had to define the positives and negatives of incorporating CBDs in food products. Should be a very interesting conversation.
From a constitutional perspective, the FDA has no authority to mandate what is sold within states. The constitution gives the federal government no power whatsoever to regulate products and under the Tenth Amendment, any such laws can be nullified. That’s one of the reasons why it took a constitutional amendment, rather than just a federal law, to ban alcohol sales. It is also why a number of states already nullify federal rules on the sale of products such as raw milk. No matter what the FDA does it cannot and will not put the CBD genie back in the bottle. It will take state action for that to happen.
As for retailers and CPG companies, the key is to provide information to educate consumers. There are a lot of CBD curious shoppers who want to understand products more. Trained staff, good labeling and having information available are all important.
The cat is out of the bag. States and retailers see the opportunity. It’s the wild west with claims of benefits. CBD needs to have standards of what it means and how to compare — that’s what the government should be focusing on.
I actually agree with Bob this one time.
Early adopters in the retail space are seeing the benefits of consumer awareness and incremental sales. I would guess that most consumers are unaware that food products with CBD are still not legal. (Especially since legalization of marijuana is happening state after state). I am sure consumers are confused by all the differing laws.
The risks include retailers getting stuck with expensive CBD product inventories if the FDA steps up enforcement (and potential fines) and this enforcement can also lead to some of the CBD food companies going out of business. The retail business should move forward cautiously by only taking on very low level CBD products until the FDA issues more definitive guidelines.
Retailers may or may not understand the risks in selling CBD products, but they understand the rewards in terms of sales and profits. For many, the risk/reward scale tips to towards the rewards. I have attended conventions where there are dedicated CBD display areas even though many still consider it to be the wild west where CBD is concerned.
Consumers have little understanding of the risks, including those listed in the latest FDA report. Part of the issue is in the delivery methods that include topical, edibles, tinctures, etc. An example would be gummies. It is difficult to control the amount of CBD that each gummy contains so someone might decide to ingest several because the first did not have the expected effect.
Retailers should not only be concerned about the companies and products they purchase but also ensure that they control the sale in the same manner the they do nicotine delivery devises.
I see more potential benefits from addressing consumer demand, and right now there’s a growing demand for CBD products. That said, the real need is for more fact-based education. Packaged goods companies and retailers should be leading the consumer education efforts from what is and is not legal usage to what are and aren’t legitimate product benefit claims.
This is not a “wait and see” market, but rather one in which “fast followers” will be battling over the crumbs left over after established boutique brands and major CPG companies take their fill. This month an Iowa retailer was busted for selling CBD gummies, reinforcing that while it’s good to be in the lead, you shouldn’t get ahead of the law. That said, you have to assume the market will hold and be prepared to enter it — legally, and based on fact, not hype.
CBD legislation in California is strange. I know of a local business that had to stop selling CBD-infused lattes, but at farmer’s markets, tea companies sell the CBD for drinks in a separate little container and customers have to add it to their beverages themselves.
The CBD craze is sort of like scooters, they hit the market so quickly and at such a scale that legislation is still struggling to keep up. But the bottom line is that there is no calming product on the market that doesn’t have negative health repercussions if taken in large doses — alcohol, antidepressants, even kava tea will take down a liver if used without moderation. This doesn’t mean it should be banned, but that consumers need to take some accountability for their own consumption.
Should CBD be out of stores? Only in areas where this legislation is being enforced. Retailers should invest cautiously and monitor shifts in CBD legislation within their local market to stay on the right side of the law. But the way I see it, more SMBs have the agility to duck and weave fluctuating CBD regulations. It’s just another advantage the local cafe has over Starbucks.
CBD madness is exactly that, and it has all the earmarks of a fad that won’t last long enough for the various government entities to sort out what’s legal, what claims are substantiated, and what’s pure fiction. For retailers and others looking to capitalize on it, move quickly and hire a good legal team.
Well, frankly what I would like is for genuine research to be done on the benefits of CBD. The current laws are simply stupid.
Some people treat CBD as a panacea. Me, it just makes me feel queasy and doesn’t help at all.
It’s time to end the Nixon-era rating of marijuana as a Schedule 1 drug and figure out what it’s really good for, in all its component forms. It was, and is, stupid.
I agree with you, but will also add that there are numerous studies (US and internationally), and published journals on the benefits of CBD for treating different ailments (epilepsy, anxiety, etc). The FDA (government) is notoriously slow, and as you’ve stated still behind the times on the classification in this case, so it’s probably going to be quite some time before we see US government funded research, unfortunately.
The thing I dislike most about retailers adding it to their products is that most don’t list the potency of the CBD (or the potency is not as claimed), and there aren’t any regulations regarding growing/sourcing or processing practices. Many CBD products available have been privately tested, and found to contain heavy metals and pesticides.
Well, whether CBD proves to cause cancer or any other terrible outcome in its users down the road, it will be tough to stop retailers now from following like sheep to jump on the bandwagon. It’s just too lucrative to miss out, right? Health concerns be darned.
Everything about CBD retail is murky. What is certain is that CBD is becoming widely accepted, even among many conservative elderly consumers, due to its health benefits. It still remains unclear if any restrictions on selling CBD will ever be enforced. The risk to retailers is getting stuck with inventory they can’t sell.
However, it looks like this risk is minimal and many retailers don’t want to miss out on the revenue potential. I think the rewards out-weigh the risks.
As long as it’s legal in their world, retailers should take advantage of fads. Whether CBD become more than a fad is unclear.
It’s actually quite funny to wander through stores in Oregon and see how much hype is on the shelves about products with CBD. It also should be sobering to us all — reminding us of all the additives which have been “magic” and turned out not to be.