FDA commissioner Scott Gottlieb announced yesterday that he would be retiring after nearly two years in the role. The reason given for his retirement is to spend more time with his family. His departure adds another layer of uncertainty around the evolution of the US CBD market specifically, and the US medical and ingredient (M&I) cannabis market more broadly.
Just last week, in testimony presented before the House Appropriations Committee, Gottlieb revealed new details about plans to pursue alternative pathways for CBD regulation. Among the revelations was that the FDA will hold a public meeting “sometime in April†to hear from stakeholders about how to best regulate CBD derived from hemp, which was legalized late last year as part of the 2018 Farm Bill. Gottlieb also said he would be forming a working group comprised of agency experts to inform him on regulatory options for CBD.
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Seaport analyst Brett Hundley commented, "Gottlieb's departure is most relevant for the US CBD market, along with the development of cannabis as a therapeutic ingredient product. First, as a reference point, hemp-based CBD was made legal by Congress when it passed the 2018 Farm Bill in December; however, the FDA quickly came out and said that the interstate sale of food, beverages and cosmetic products containing CBD was still illegal. Thus, any related manufacturing and sale of CBD products is today handled much like THC and its various form factors, on a state-by-state basis. We have been watching for developing guidelines on full CBD legalization in the US, based on two potential regulatory catalysts: (1) the ECDD/UN, or (2) the FDA."
"Now, with Gottlieb's resignation, additional questions related to his successor's views and the Senate confirmation process could cloud CBD/M&I market growth even further. We acknowledge that CBD has still found its way onto many store shelves across the US, but it is our view that approval by the FDA will unleash considerably more in the way of market growth, with new entrants in the form of CPG, pharma, and retail grocery adding a material amount of muscle to M&I market evolution. Until this happens, we see the US CBD market remaining relatively constrained. We view prior FDA Commissioner short-list candidates like O'Neil, Gulfo, and Srinivasan as favorable for de-regulation and thus CBD approval, but we also worry about the Senate confirmation process and what happens to an FDA (and its review of CBD) that goes on too long without a leader in place."
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