CBD companies are advised to use the time well as virus slows regulation

CBD regulation in the US does not appear to have been affected significantly more than any other category during the COVID-19 pandemic.

Quite a few state legislatures have been forced to close, leading to delays in passing laws that could impact on the industry. But that of course is true of many industries.

There is some evidence that regulators are increasing requirements for products for example in the area of checks for imports.

However, generally speaking, authorities have found workarounds to allow many regulatory processes to continue as normal. States such as Alaska have recently announced that they would still be accepting applications for hemp production licensing online.

And the US Department of Agriculture (USDA) published a letter on 16th March stating it would continue to provide timely services to keep grading and inspection of products like CBD oil moving through the coronavirus crisis.


Future opportunities


Christina DiArcangelo, CEO of a series of companies under the Affinity brand, told CBD-Intel she had not seen a slowdown, and that even if regulators were reducing speed, producers and businesses could use the time to get ahead of the ball.

“I am seeing people still planning for clinical studies and FDA submissions,” said DiArcangelo (pictured above). “We just finished a protocol synopsis for another client and we are still seeing emerging markets open in other countries. Last week, we were contacted by an Indian company that needs R&D assistance, clinical trial development, formulation, etc.

“I would recommend that companies interested in progressing with their clinical studies use this time to get things completed while other parts of the business may have slowed down due to the COVID-19. Allow this time to be able reflect on your business model and how best to orchestrate it. By the time we’ve gotten through the COVID-19, they can begin to enroll their studies. Use the time to your advantage.”

Looking forward, there could also be opportunities, DiArcangelo added.

She stressed: “The FDA [US Food and Drug Administration] should enforce the false claims and marketing claims made by CBD companies that are stating that CBD can help with palliative issues for patients that are diagnosed with COVID-19.”


Life post-virus


But she added that the FDA will accept applications that follow its regulatory process for seeking to address COVID-19, and that her company is working with clients who are applying for a Pre-Investigational New Drug Application (PIND) with the FDA related to palliative claims for their products.

And COVID-19 could lead to further cannabis legalisation efforts in order to boost bare coffers. Lawmakers in states such as Oklahoma have already started to discuss such measures.

“We’ve been thinking a lot about how life will change post-virus, and one big difference will be that state and local governments are going to encounter large unexpected tax receipt shortages, said Jessica Rabe, co-founder of DataTrek, an investment and market commentary service.

“The easiest way many state governments can start to close their budget gaps is first legalising and then taxing adult-use sales of marijuana.

“Traditional means of boosting state and local government’s revenue, such as increasing income, sales or real estate taxes, will further dampen demand and possibly drive people out of states like New York. Taxing sales of retail cannabis is a new source of state and local income that’s successfully raised hundreds of millions of dollars annually in states like Colorado.”


What This Means: It’s fairly close to business as usual in many regulatory and enforcement areas affecting hemp and CBD in the US which may sound surprising, given the major changes other areas face.

If anti-coronavirus measures continue until much later in the year, regulatory issues may become more of a burden. But for now CBD companies seem to have no more regulatory/compliance disruption than any other businesses from the pandemic. There may even be advantages though a lot of care needs to be taken if they are to be safely, responsibly and legally exploited.

Sam Newhouse CBD-Intel contributing writer

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