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How GW Pharma Could Change The Face Of CBD

Jun 25, 2018

With the global cannabis industry climbing, the CBD industry alone could top $1 billion. Experts expect to see an uptick in cannabidiol-related products out of Canada, particularly with this week’s nationwide legalization of marijuana. However, the CBD industry in the U.S. is also expected to grow in light of this summer’s likely FDA approval of the first CBD-based drug, the epilepsy seizure medication Epidiolex, from British maker  GW Pharmaceuticals (NASDAQ:GWPH). Once the FDA approves the drug, expected by the end of June, doctors will be able to prescribe it legally.

Earlier this year, an FDA advisory panel unanimously recommended that the FDA approve Epidiolex, in large part due to strong research data and evidence of the drug’s effectiveness in controlling the violent drop seizures that accompany two rare forms of childhood epilepsy.

Some experts believe the anticipated approval will likely open the floodgates for product demand of other CBD products, and place further pressure on the FDA to move it along and approve other CBD-based medications. The floodgate effect is known as “sea change,” as described by Barbara Carreno, public affairs officer for the U.S. Drug Enforcement Administration (DEA). Carreno says that a leader drug like Epidiolex often paves the way for other less expensive—and untested—CBD products.

Indeed, Epidiolex is expected to revolutionize the U.S. market, according to a Business Insider report.  Carreno explains it as a waterfall-type effect. Once the FDA approves Epidiolex, the DEA will be compelled to deschedule it from a Schedule I drug on the Controlled Substances Act (defined as “no recognized medical use”) to either a Schedule II or III drug. A similar descheduling occurred with Adderall, the very widely prescribed ADHD medication. Carreno says that once the drug is descheduled, CBD manufacturers must register with the DEA—and that will make all the difference to the industry in the U.S.

Why? Because their product and company status will no longer exist in the legal gray area, and hopefully the mass confusion over which CBD products are legal and which are not will come to an end. The confusion lies in understanding the difference between CBD and THC. Both are cannabinoids and are similar at the molecular level. However, each reacts with cannabinoid receptors much differently. MOst CBD comes from hemp, and for any plant to be considered “hemp” it must contain less than 0.03 percent THC.

CBD derived from hemp is exempt from the Controlled Substances Act; hemp is deemed an industrial and agricultural crop. On the other hand, CBD derived from cannabis is a schedule I drug, and only 28 states and Washington, DC have so far legalized it; 15 states have only legalized CBD by itself.

While most hemp-derived CBD companies are rapidly growing their businesses without repercussion or worry, many cannabis CBD businesses are hesitant about selling products in states where marijuana is not yet legal. It’s just a gray area, and many are erring on the side of caution and not doing business in those states. These companies would love to expand their businesses into every state and are hoping the FDA’s June approval of Epidiolex will help pave the way.

If the floodgates were to open, one issue that must be addressed is the large glut of poorly regulated products. It is indeed a pressing issue for the CBD industry, as there is a large variation in the quality and efficacy of CBD products in the marketplace. A published study in the Journal of the American Medical Association (JAMA) showed tremendous variability in 84 CBD products tested. Nearly 70 percent of those products had different amounts of CBD than were specified on the product label, with many testing positive for the psychotropic THC even though the products are legally not supposed to have any THC.

For now, the easiest thing for consumers to remember is that CBD from hemp is legal while CBD from marijuana is not. Following the approval of Epidiolex, things may change, although it is still wait and see at this point.

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