Stocks Rally After FDA Announcement to Expedite CBD Regulations Made Public

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WASHINGTON, D.C. Stocks rose this week after news that the Food and Drug Administration (FDA) plans on speeding up efforts to draft regulations for the CBD industry.

Many have been left wondering when they can expect clear direction from the agency as CBD sales seem to be in a state of legal limbo. After a public hearing in May, some industry members felt that regulations would not be coming in the near future. However, the agency has signaled it should be ready with CBD regulations earlier than expected.

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“FDA is expediting its work to address the many questions about cannabidiol (CBD). This is an important national issue with public health impact, and an important topic for American hemp farmers and many other stakeholders,” Principal Deputy Commissioner of Food and Drugs Dr. Amy P. Abernethy, M.D., Ph.D., said on Twitter. 

“We plan to report on our progress around end of summer/early fall,” Abernethy said in a follow-up tweet.

Abernethy seems to recognize that an entire industry is anxiously waiting regulations. Although the Agricultural Improvement Act of 2018 (farm bill) removed hemp from the Drug Enforcement Agency’s list of banned substances in December, some CBD producers have received stern warnings from the FDA. The FDA has concerns over CBD especially in relation to orally ingested products such as infused edibles, beverages, and capsules. Abernethy says the agency is seeking a balanced approach when it comes to regulating CBD.

“We are enthusiastic about research into the therapeutic benefits of CBD products but also need to balance safety,” Abernethy tweeted. “To understand the breadth of issues and gather data on safety we have conducted a public hearing, reviewed the medical literature, and have an open public docket.”

The announcement may have helped some shareholders of cannabis stocks. CannTrust Holdings rose significantly as the company tries to recover from Canadian regulators seizing five metric tons of cannabis being cultivated in unlicensed grow rooms. CannTrust’s Danish-based business partner, Stenocare, also experienced a rise in stock value. Stenocare admitted to receiving some of the illegally grown cannabis from CannTrust. 

Canopy Growth Corp., Aurora Cannabis, Tilray, and Cronos all rose after the reports that the FDA will expedite CBD regulations became public. 

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