The recent public hearing by the Food & Drug Administration on cannabidiol (CBD) provided little clarity on the regulatory way forward for the marijuana-based compound. Acting FDA commissioner Ned Sharpless said there were "real risks" with using CBD and reiterated that since the agency has approved drugs with CBD as the active ingredient, it cannot be added to food products sold across state lines or sold as a dietary supplement.

While acknowledging the intense and growing public interest in the subject, "there is still much that we don't know," he said, indicating the way out of the regulatory labyrinth would not be easy or quick.

A marijuana leaf in front of other pot-based products.

Image source: Getty Images.

Reducing the carnival barker atmosphere

It doesn't help that some companies hawk CBD like snake oil, claiming magical, therapeutic properties that can relieve or cure a variety of ailments, from anxiety and inflammation to insomnia and pain, and have added it to all manner of products like creams, lotions, and ointments. Sharpless said the FDA is aware of many that are marketing their products in violation of the law, and it has issued warning letters to others.

While there are studies that back up the efficacy of CBD's benefits, dosing levels are important for them to be effective, which many over-the-counter products don't come close to providing, and there is also the risk of conflating the outcomes from the high dosages of pharmaceutical-grade CBD used during clinical trials with the limited levels of commercial-grade CBD used in OTC products.

Even so, numerous national retail chains are lining up to sell CBD products to their customers, and even pharmacy giants Walgreens (WBA 0.74%), CVS (CVS 0.13%), and Rite Aid (RAD 21.43%) are jumping on the CBD bandwagon.

Sharpless is worried that wanton marketing of CBD products puts the health and safety of consumers at risk because they may avoid approved therapies in favor of CBD for serious or even fatal diseases without knowing the consequences.

Eliminating the patchwork approach to regulation

The FDA sees potential in these compounds, having approved GW Pharmaceuticals' (GWPH) Epidiolex, which uses CBD as the active ingredient, as a drug treatment for epilepsy, as well as Marinol from AbbVie (ABBV 0.76%) and Syndros from Insys Therapeutics (INSY), which contain tetrahydrocannabinol (THC), the psychoactive compound derived from marijuana. However, Sharpless says, "There are important reasons to generally prohibit putting drugs in the food supply."

Still, you will find that where states have legalized marijuana use, CBD is beginning to crop up in food and drinks (the FDA's regulatory jurisdiction extends only to interstate commerce). Large brewers like Heineken's Lagunitas has produced a CBD-infused beer for years that was only available in California, and now we're seeing restaurants adding it to their menus.

Carl's Jr. introduced a CBD burger this past April in its Colorado restaurants, and Denver-based Illegal Burger, which is developing CBD-based seasonings, is planning to launch food trucks under the AmeriCanna Cafe banner that will sell CBD-infused menu items outside of dispensaries.

The future is a long way off

While the hearing does open up a path for the eventual easing of the rules surrounding CBD usage, institutional resistance suggests it won't be quick.

FDA principal deputy commissioner and acting CIO Dr. Amy Abernethy wrote a tweet thread acknowledging public and business interest in reducing confusion around CBD but also noted, "It's our responsibility to ensure that the regulatory path is scientifically sound and in the interest of public health."

Abernethy's approach indicates the FDA will be slow-walking this forward -- a point the market seemed to agree on, since many cannabis-related stocks fell sharply following the hearing, including Canopy Growth, Aurora Cannabis, and Tilray.

Still, the FDA panel will continue to collect comments as it decides how best to regulate the compound. And though the efficacy of some of the products being hawked so far might be questionable, CBD's natural origins and the public's desire for it may ultimately persuade regulators to take a more hands-off approach. It just won't be happening anytime soon.