Get the facts on this important legislation and what passage would mean for the hemp industry and CBD consumers.
Simply put, both S. 1698 and H.R. 841 allow for extracts derived from legally produced hemp crops to be used and marketed as dietary supplements. Hemp-derived CBD products currently remain unregulated by the U.S. Food and Drug Administration (FDA) which continues to keep consumers at risk, producers unchecked, retailers afraid, and farmers profitless. This legislation would apply the same regulatory framework for existing dietary supplements or food and beverage additives (think caffeine) to hemp-derived CBD products and ingredients, ensuring consumer safety by holding manufacturers to production standards while clarifying the legality and legitimacy.
What is hemp-derived CBD?
CBD stands for cannabidiol, one of the many naturally occurring compounds called cannabinoids found in the cannabis plant. In recent years, CBD has become increasingly popular as users tout its potential health benefits. Unlike its psychoactive cannabinoid cousin potent in cannabis varieties grown for recreational or medical marijuana, THC (tetrahydrocannabinol), CBD does not produce a psychoactive or euphoric effect and cannot get you "high."
Despite the 2018 Farm Bill, which explicitly legalized hemp and hemp-derivatives produced legally under USDA approved hemp production programs, there is no federal oversight on the manufacture and sale of CBD products. The majority of hemp in the U.S. is being grown for an unregulated market!
More on hemp-derived CBD —
What is H.R. 841?
H.R. 841, The Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021, was introduced in the House on 02/04/2021 by Rep. Kurt Schrader (D-OR) joined by Republican cosponsor, Rep. Morgan Griffith (R-VA) . This bill, by definition, allows the use of hemp, cannabidiol (i.e., CBD) derived from hemp, or any other ingredient derived from hemp, in a dietary supplement, provided that the supplement meets other applicable requirements.
More on H.R. 841 —
What is S. 1698?
S. 1698 was introduced on 5/19/2021 by Sen. Ron Wyden (D-OR) with bipartisan cosponsor support from Senators Rand Paul (R-KY) and Jeff Merkley (D-OR). This bill, The Hemp Access and Consumer Safety Act of 2021, would allow hemp-derived CBD and other hemp-derived ingredients to be sold in food and beverages or dietary supplements.
More on S. 1698 —
The Difference Between H.R. 841 and S. 1698
While S. 1698 and H.R. 841 have the same intent, to regulate the CBD market, these two bill are not exactly the same. S. 1698 includes the regulation of hemp-derived CBD and other ingredients as a dietary supplement, in addition to a food or beverage additive, whereas H.R. 841 only regulates CBD in dietary supplements. Just because H.R. 841 does not specifically include CBD as a food or beverage additive, this does not mean the bill can't be amended!
Why do these bills matter for consumers?
For consumers, this legislation is especially important because it means greater safety and confidence in CBD products. Without a clear regulatory framework, bad actors are selling products without appropriate safeguards and are misleading consumers with false label claims. Passage of this bill would also create greater access to quality CBD products, as many retailers have been hesitant to sell CBD due to the unclear regulations.
What does lack of CBD market regulation mean for the hemp industry?
Without regulation of products containing hemp-derived CBD, the market remains a wild west. Inconsistent laws across states creates confusion for farmers, producers, retailers and consumers alike. Farmers can’t make money of hemp crops grown for CBD if processors of CBD products can’t sell to big box stores or chain retailers. Most importantly, consumers can’t feel 100% confident that the CBD products they are using may not contain harmful or mislabeled ingredients.
How would regulating CBD help hemp farmers?
Following the legalization of hemp in 2018, farmers invested heavily in crops for CBD production. However, due to the failure of FDA to legally recognize and regulate products containing CBD, a lack of regulatory clarity has caused extreme financial hardship for farmers who were left without outlets or payment for their hemp crops after company bankruptcies and failed contracts.
Clear laws and regulations would empower farmers to get out of the court system and back to the field with more secure access to banking and merchant services, and marketing opportunities. We owe it to our farmers to honor the commitment made to them in the Farm Bill!
What is the potential economic impact of CBD regulation?
Passage of legislation to regulate CBD would play a significant role in helping to stabilize hemp markets, opening up promising economic opportunity for U.S. agriculture and honor the commitment made to growers in the 2018 Farm Bill.
The Farm Bill allowed for a huge explosion in this market. From the start of its federal legalization in 2018 to the end of 2019, CBD generated over $4 billion in revenue. At the close of 2020, the hemp market brought in $4.7 billion in the U.S. alone. Even though the COVID-19 pandemic threw a curveball at the industry, many brands met the challenge and saw a rise in CBD sales online. E-commerce garnered the highest share of distribution during 2020 at 38%, followed by pharmacies, CBD specialty retailers, and natural food stores. Source: Brightfield Group
In a recent article from Forbes, reachers predicts that the CBD market will soar to $19.5 billion in 2025. This projection takes into account a compound annual growth rate of nearly 37% over that period. But there is a catch: The estimate hinges on whether the U.S. Food and Drug Administration will finally approve CBD as a legal additive in 2022.
Top cannabis market research firm BDSA, which made this prediction, believes the agency will do so. This would be a significant watershed for the space because even though CBD was legalized as a result of the passage of the U.S. Farm Bill in late December 2018, there are currently no FDA-approved drug products that contain CBD. If this prediction about the FDA comes to pass, there is sure to be a floodgate of interest from traditional food and beverage brands as well as major retailers. Much of that growth will transpire as ingestibles come to market and legalization continues to expand throughout the country. Source: Forbes
How will the regulation of CBD benefit everyday U.S. citizens?
Given the well-established benefits and safety profile of hemp extracts, additional regulatory pathways for hemp-derived CBD would both improve public health and encourage additional scientific research, increasing options in safe and third-party tested CBD supplements. Less clutter and confusion, more clarity and quality! All consumers of CBD products should feel be able to feel confident that these products are labeled accurately and produced in facilities that are kept to basic manufacturing standards.
For example, do you buy caffeine, whether in supplements or soda, and wonder where it came from? No, because you don’t have to. CBD products on the shelves today could be coming from anywhere containing anything because there are no rules or requirements in place. Once legislation passes to place regulations on CBD products, concern from consumers and retailers alike can subside as the FDA will ensure that the products that make it to the shelves are safe and sold appropriately!