A bipartisan group of lawmakers introduced a bill in the U.S. House of Representatives on Monday that would give the Food and Drug Administration (FDA) flexibility to allow hemp-derived cannabidiol (CBD) to be sold as a dietary supplement, boosting shares of cannabis stocks such as Charlotte's Web Holdings (CWBHF -8.42%), which was up 18% today on the news.
House Agriculture Committee Chairman Collin Peterson, D-Minn., filed the bill amending the Federal Food, Drug, and Cosmetic Act (FD&C), and it is co-sponsored by James Comer, R-Ky.; Chellie Pingree, D-Maine; and Thomas Massie, R-Ky.
Peterson said in a press release, "This bill will allow FDA to regulate CBD that comes from hemp as a dietary supplement, providing a pathway forward for hemp-derived products." The bill would also require the Department of Agriculture to produce a report on the regulatory and market barriers faced by hemp farmers.
The FDA threw cold water on the CBD industry in November when it issued a warning to consumers and CBD producers saying that it was illegal to market CBD by labeling it as a dietary supplement. Although the agency cited "many unanswered questions" about the safety of CBD, the real issue was a provision of the FD&C that prohibits an active ingredient of an approved drug to be sold as a dietary supplement. Ironically, the FDA implicitly outlawed CBD as a supplement when it approved the CBD drug Epidiolex from GW Pharmaceuticals (GWPH) as safe and effective.
Cannabis investors, and no doubt hemp farmers, were cheering the possibility that regulatory barriers for the CBD market could be removed by congressional action.