Back in December 2018, President Trump signed a bill that legalized the cultivation and sale of industrial hemp and its extracts. States and tribes were to create their own hemp programs and submit them to the U.S. Department of Agriculture (USDA) for approval in a year, but in the meantime, farmers could commence cultivation under pilot programs.
Within a year, the hemp/CBD sector was already worth millions in sales, with experts saying it would hit $20 billion by 2024. However, beneath all these attractive numbers, problems were brewing. The sector had grown too fast for regulatory authorities to keep up, and it was filled with thousands of CBD products, many of them contaminated.
In a move that’s sure to give the sector a more comprehensive framework and keep consumers safe, President Trump proposed a budget that would allocate $5 million to the U.S. Food and Drug Administration (FDA) to regulate cannabis and its derivatives, including CBD. He also asked for more funds to oversee hemp farmers.
A statement from the FDA says that the additional $5 million will help advance the FDA’s regulations for products containing CBD while allowing the agency to enforce the law against making unsubstantiated medical claims about cannabis products.
The funds will be divided across different FDA departments thus: The Office of Regulatory Affairs ($2 million), The Center for Veterinary Medicine ($500,000), The Center for Food Safety and Applied Nutrition ($2 million) and FDA Headquarters ($500,000).
The FDA will use the influx of funds to regulate cannabis-derived substances such as CBD, develop policy, process product review applications, conduct inspections and enforcement and carry out research.
In the budget’s executive summary, the FDA stated that it “must support oversight of the increasing numbers of marketed cannabis-derived substances that may put the public at risk,” adding that the money would indirectly increase the capacity of the agency’s dietary supplement and food ingredient review programs.
“This new funding will enable the FDA to continue regulating the usage of cannabis-derived substances such as cannabidiol (CBD) in FDA regulated products such as dietary supplements and when used as unapproved food and feed additives,” according to an FDA press statement.
The initiative will also support regulatory activities, including developing policy, and allowing the agency to continue to perform its existing regulatory responsibilities including reviewing product applications, inspections, enforcement, and targeted research.
With the funding, the FDA will be able to create a more comprehensive regulatory structure that would keep the consumers safe while protecting the farmers’ interests.
Experts are of the view that this request for funding is likely to be seen by industry actors like No Borders Inc. (OTC: NBDR) as an indication that the FDA is moving into high gear on matters of developing rules for the CBD industry.
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