What FDA’s Data Acceleration Plan May Signal for the Future of Hemp-Derived Cannabinoids

By Eric Singular, Director, Hemp Business Journal

Last month, the U.S. Food and Drug Administration (FDA) released its Cannabis-Derived Products Data Acceleration Plan (DAP) offering a glimpse into how the federal agency will pursue data acquisition as it lumbers toward crafting a rule for the manufacture and retail of products containing hemp-derived cannabinoids. The DAP aims to leverage “novel” data sources to assess the safety and efficacy of cannabis-derived products (CDPs), as well as forge government data partnerships and advance scientific research to evaluate consumer vulnerabilities.

One of the pilot initiatives that the FDA will employ to mine novel data sources is social listening. Originally a marketing strategy designed to help brands track and monitor data from social media platforms, social listening will allow the agency to assess volumes of words, phrases, and keywords to analyze demographics, market contextualization, and consumer behaviors to identify current and emerging safety vulnerabilities in the market. The DAP cites platforms like Reddit and Twitter to foster deeper understanding of public health issues surrounding the use of CDPs.

As New Frontier Data’s Senior Industry Analyst Josh Adams pointed out, “the social listening approach to data collection – using platforms such as Reddit, Twitter, and Instagram as part of their novel data sources approach – certainly makes sense for gaining an understanding of consumer behavior and experiences, and will probably yield some interesting qualitative insights. However, this is not the type of rigorous scientific testing we generally expect from the FDA, and is unlikely to assist the agency in making determinations about the overall safety of cannabis and cannabis-derived products.”

During a virtual conference on cannabis and cannabidiol hosted by the Food and Drug Law Institute, Joseph Franklin, a former policy director for the FDA’s Principal Deputy Chief Amy Abernethy, asserted that the FDA’s call for more data sounds like a broken record, and that the agency needs to become more active in working with stakeholders to craft regulations and guide the hemp-derived cannabinoid sector forward. There appears to be growing friction between the FDA and industry manufacturers of CBD and other minor cannabinoids.

On July 13 the FDA reconfirmed its position that CBD in any form is subject to the drug preclusion language in the federal Food Drug and Cosmetic Act, per objection letters posted regarding New Dietary Ingredient Notifications (NDIN) filed by Charlotte’s Web and Irwin Naturals in citing a lack of clinical research. While it is typical for big food and big pharma to fund the necessary clinical research to get new food, drug, or nutraceutical ingredients through the FDA approval process, CBD companies are not generating anywhere near the kind of revenue to be able to afford funding clinical research trials.

Next month marks three years since passage of the 2018 Farm Bill, and the industry remains without a clear regulatory framework from the FDA. Less than a year after the bill was signed into law, the U.S. Department of Agriculture (USDA) published its Interim Final Rule for Domestic Hemp Production. After multiple public comment periods, a Final Rule was codified last January, taking effect on March 22 The expeditious timeline for crafting regulation was only made possible by the agency’s leveraging knowledge and insights from regulators from state departments of agriculture (e.g., Colorado, Kentucky, and Oregon) which had been experienced in the cultivation of hemp during 2014-2018.

In the past three years, the FDA has sent dozens of warning letters to manufacturers of CBD products for making illegal marketing claims related to the treatment of medical conditions. The rebukes from the agency seem less about curbing brands from employing dubious marketing tactics than about highlighting the absence of regulations from FDA. An uncertain sense of pioneering in the Wild West may seem endemic until the agency promulgates formal regulations.

“In part,” Adams suggests, “I think FDA inaction stems from the fact that there hasn’t really been anything to compel the agency to be particularly proactive. With federal legalization becoming increasingly likely in the not-too-distant future, the agency will be forced into action to address not just CBD but a range of other cannabis-derived products. The Cannabis Administration & Opportunity Act outlined a fairly extensive, if vaguely defined, role for the FDA in the context of a federally legal cannabis marketplace. While that legislation is unlikely to gain much traction before the midterm elections, it certainly signaled to the agency the extent of the role it would have relative to regulating cannabis and cannabis-derived products. Minimally, this data acceleration plan suggests that the FDA is aware of its deficits in understanding cannabis, and represents an initial step in understanding the space.”

The expectation that the industry will regulate itself or provide the funds for clinical research would be a tall order, but given that retail sales of CBD-infused foods, beverages, and supplements saw a sharp decline from June 2020 to June 2021, it seems more likely that brands will prioritize survival, even should that range into regulatory gray areas.

According to the wellness-focused data technology firm SPINS, sales of CBD supplements fell 6% in 2020, and sales of CBD beverages fell 11% from April 2020 to 2021. In May, GT’s Living Foods (a market leader for kombucha) scrapped its plans to release a CBD-infused beverage line, citing regulatory uncertainty.

Continued expectations for federal marijuana policy change may buoy the sector before next year’s midterm elections, though the results there, too, remain uncertain.

As Adams elaborated, “the impact of the midterm elections is a bit of an unknown at this point. The conventional wisdom is that the party in power typically loses some seats in Congress during the midterms. This, coupled with other big-ticket items – infrastructure, the ongoing pandemic, an unstable economy, global supply chain issues – will likely keep federal legalization out of the spotlight in the near term.

Nevertheless, the cannabis industry added an estimated 80,000 jobs in 2020, and as of 2021 cannabis represented the fifth-most valuable crop in the U.S. If the industry can continue to press these issues and situate cannabis as integral to the American economy, then perhaps legalization can build upon this momentum going into the 2022 election cycle.”

Either way, the DAP signals that a robust regulatory framework remains a long way out. Meanwhile, states are leading the charge, with New York and California both passing laws to regulate CBD sales, actions which the FDA discourages. The collaborative spirit shared between regulators, industry operators, and federal officials to enable the USDA to produce an imperfect but practical Final Rule for hemp production seems lacking at FDA. If the agency’s call for more data is a tired refrain, so is the dearth of regulations’ precluding progress for producers of hemp-derived CBD and minor cannabinoids. For now, the bands play on.