Cleveland — During the past few years, the chemical compound extracted from cannabis has elbowed its way into the mainstream at warp speed. Consumers are clamoring for CBD in everything from lotions and cosmetics to gummies, dietary supplements and energy drinks, attracted by the perceived health and wellness benefits. Retailers have also jumped on the trend, with major chains such as CVS Pharmacy, Walgreens, Whole Foods and The Kroger Co. dedicating shelf space to topical CBD products including oils and creams. But there’s a glaring hole: many of these stores won’t stock CBD snacks, beverages or other consumables
Candy & Snack TODAY had the opportunity to sit down with Chris Walsh, CEO of Hemp Industry Daily, and Tish Pahl, an attorney with Olsson Frank Weeda Terman Matz PC, to talk about the current situation surrounding CBD-enhanced products and what the future could hold when it comes to confectionery and snacks.
Although the federal government legalized the production and distribution of hemp several years ago, the FDA has not yet released rules governing the sale of ingestible forms of CBD. The agency has delayed this move several times as it gathers more data for health and safety reasons, and then everything was put on hold when the Biden administration took over earlier this year, Walsh explains. “It’s unclear when we’ll get clarity,” he says. “Maybe later this year, possibly next. For now, though, the FDA is clear on one thing: it’s currently illegal to add CBD to food, beverages or supplements,” he says.
To those considering cannabis products now or in the future, Pahl warns: “As it stands right now in the United States, cannabis is illegal in almost all FDA-regulated products. It is unlawful under the Food, Drug & Cosmetics Act to introduce food containing added CBD or THC into interstate commerce, or to market CBD or THC products as dietary supplements, even if the substances are hemp-derived.”
That has held mainstream sweets and snacks brands at bay for now, though many are laying the groundwork to enter the market and many smaller companies are selling ingestible CBD products online, in CBD-specific shops and in markets that have legalized medical or recreational cannabis, Walsh says.
Pahl adds that the most important steps companies can take right now are to get good advice from a variety of knowledgeable sources, know and comply with local laws, establish good relationships with reputable vendors and label accurately.
The opportunity for food and beverage companies to tap into this demand is enticing. Annual sales of hemp-derived CBD at the retail level hit an estimated $2 billion in 2020 and are expected to surge to around $7 billion by 2025, according to Nielsen Global Connect. Even if this estimate turns out to be too rosy, there’s still a sizable market, Walsh points out.
This projection also assumes the FDA does indeed allow the sale of ingestible CBD products, in which case food and beverages would account for a big chunk of the growth, he adds.
“CPG companies can bring a lot to the table, including powerhouse marketing and branding strategies, expertise in distribution and logistics and the know-how to manufacture on a massive scale, giving them a huge leg up on the relatively small companies involved today,” Walsh tells Candy & Snack TODAY. Additionally, there will be the need for all the services, equipment and technologies required in general food and beverage production, from packaging to lab testing and quality control, he says.
What’s more, CBD is sweeping the globe and could become a powerhouse international industry.
“But don’t be fooled,” he cautions. “There are a host of challenges involved in making a successful go at it, including marketing hurdles tied to consumer confusion surrounding CBD and what it can do for them. We still have no idea what the FDA’s regulations will look like — or even if the agency will allow CBD consumables. It’s also unclear what the future holds for CBD. Will consumer demand hold up and continue to grow, or is this just the latest fad that will eventually sputter out?” Walsh concludes, saying: “I’m convinced CBD has a bright future, even if the ceiling is lower than the projections. Regardless, every CPG company should take this seriously and at least assess the opportunity or risk losing out on a massive new market.”