NCIA urges FDA to pursue ‘interim fix’ on CBD to reassure banks providing merchant services

By Elaine Watson contact

- Last updated on GMT

Picture: Gettyimages/Dmitry_Tishchenko
Picture: Gettyimages/Dmitry_Tishchenko

Related tags: Cbd, Cannabis

“If we do not succeed in working together to reassure the card brands that they can safely support our industry, then we predict a significant decrease in CBD sales within the next few months,” the National Cannabis Industry Association (NCIA) has warned.

In a lengthy comment​ submitted to the FDA ahead of its May 31 public meeting​ on cannabis, the NCIA​ - which represents cannabis and ancillary business leaders, legal professionals, scientists, and public health experts - urged the FDA to come up with an ‘interim fix’ to ensure members retain access to professional services while the FDA comes up with a regulatory pathway for CBD.

It explained: “Banks, insurance companies, and other professional entities do not currently understand the regulatory landscape, and as a result, many CBD companies are at risk of losing necessary professional services.”

‘We predict a significant decrease in CBD sales within the next few months’ if card brands don’t get ‘reassurance’

Evalon, a subsidiary of U.S. Bank, recently stopped offering merchant services to hemp-derived CBD businesses (ie. it stopped allowing them to accept secure credit or debit card transactions) owing to the lack of clarity on how the FDA intends to regulate the industry, noted the NCIA.

Our coalition would like to work with the FDA on an interim fix, clarifying that the FDA intends to allow (or does not intend to pursue action against) the sale of ingestible CBD, as long as there are no disease claims associated with the marketing or labeling of the products.

“But, we also believe that a legislative fix is desirable, and thus we strongly support the SAFE Banking Act (H.R. 1595; S. 1200). The stakes could not be higher for this industry. If we do not succeed in working together to reassure the card brands that they can safely support our industry, then we predict a significant decrease in CBD sales within the next few months.”

FDA should distinguish between isolates and non-standardized hemp extracts

While the FDA has made it clear​ that CBD is not permitted in foods and supplements as it was first investigated as a drug, it should now take steps to “properly distinguish between CBD isolate and non-standardized hemp extract that contains naturally occurring cannabinoids, including CBD,” ​argued the NCIA.

“While it seems reasonable to conclude that investigational study of CBD isolate, which occurred in 2006, predated CBD being marketed as a dietary supplement, it is also reasonable to conclude that hemp has been in foods for well over 100 years.”

A good template for moving forward is red yeast rice, which can be sold as a supplement if formulations are not standardized (i.e., without artificially increased levels of lovastatin – a cholesterol-lowering ingredient in red yeast rice that has been approved as a drug), claimed the NCIA.

“Applying the same logic, the FDA should allow marketers of non-standardized hemp extracts that contain naturally occurring CBD (and other cannabinoids) to market such products as conventional foods and dietary supplements, given that hemp (and the cannabinoids naturally contained in the same) has been present in the food supply for well over 100 years.

“In addition to allowing consumers to continue to benefit from the myriad product offerings in this space without interruption for regulatory review—which is not needed, given that hemp products have been consumed without incident for over 100 years—the red yeast rice approach has the added benefit of not requiring the FDA to take years to go through the notice-and-comment rulemaking process.”

Allowing hemp extracts in foods won’t disincentivize CBD drug development, claims NCIA

Meanwhile, the widespread commercial availability of food products containing cannabis-derived compounds such as CBD has “no significant effect on the incentives for, and feasibility of, drug development of compounds in the cannabinoid space,​” argued the NCIA.

Strong evidence to support this argument is the fact that numerous cannabinoid-based medicines already exist in the pharmacopeia (e.g., Marinol (dronabinol), Sativex (nabiximols), Cesamet (nabilone), and Epidiolex).”

GT Dave
GT's Living Foods founder GT Dave: 'I believe the current position that the FDA has taken was honestly kind of forced on them, because CBD came out of nowhere, and the next thing you know everyone was running around and putting it in everything and claiming it as a cure all, which is not good.​'

Epidiolex​ – an approved drug containing a purified form of CBD that targets a specific type of childhood seizure – “is distinct from over-the-counter products currently sold in consumer markets​” that contain non standardized hemp extracts, claimed NCIA.

“The federal government should not be in the business of restricting the sale of cannabis-based products to enable a small number of pharmaceutical companies to profit greatly from the sale of cannabis-based drugs.”

FDA has 'unresolved questions regarding the cumulative exposure to CBD'

In an April 2 statement​​​, the FDA noted that its review of the marketing application for Epidiolex had “identified certain safety risks, including the potential for liver injury.”​​

It also referred to “unresolved questions regarding the cumulative exposure to CBD if people access it across a broad range of consumer products​​,” and questioned “whether some threshold level of CBD could be allowed in foods without undermining the drug approval process or diminishing commercial incentives for further clinical study of the relevant drug substance.”​​

What legislative options are available to the FDA?

As things stand, added the agency, "The only path that the FD&C Act allows for such substances​ [THC, CBD] to be added to foods or marketed as dietary supplements is if the FDA first issues a regulation, through notice-and-comment rulemaking, allowing such use...

"The FDA would only consider this path if the agency were able to determine that all other requirements in the FD&C Act are met, including those required for food additives or new dietary ingredients."

However, a working group has been asked to "consider whether there are legislative options that might lead to  to more efficient and appropriate pathways than might be available under current law."

Attorney: 'Someone has to step up'

Todd Harrison, an attorney at Venable who has been trying to help clients navigate the CBD minefield, told FoodNavigator-USA: “FDA has numerous options already available if someone in the industry would actually file something with FDA to show that CBD at a low dose does not pose a safety concern nor would it act as a pharmaceutical, but nobody in this industry is willing to do it the right way. ​​

“I believe if someone would file with FDA that a non standardized hemp extract that contains CBD and other cannabinoids was safe, FDA will permit its marketing… but someone has to step up."

Some manufacturers in the space including CV Sciences and Manitoba Harvest have announced the self-determined GRAS status of their hemp extracts but have not (yet) submitted these determinations to the FDA.

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