Since the passage of the 2018 Farm Bill, which decriminalized the production and sale of hemp-based products, cannabidiol (or CBD) has become the nation’s hottest trend in wellness. This non-psychoactive compound found in the hemp plant has been used in everything from infused cocktails to cannabis cream for arthritis. However, the Food and Drug Administration (or FDA) has yet to release concrete guidelines to help retailers and buyers understand what is legal and what isn’t in terms of CBD, which can make some consumers very wary of buying these products.

The Oki example

Oki, a company, selling CBD-infused waters and beverages in states like California and Colorado, is part of the first wave of mainstream products to hit the market that contains CBD. Here’s where things can get complicated, however: CBD by itself is federally legal, as mandated by the Farm Bill. However, the FDA has not yet released its guidelines on CBD in food and drink, which makes these beverages technically illegal at the federal level. The Federal Food, Drug, and Cosmetic Act still maintain that CBD is illegal for use in human and animal food designed for interstate commerce.

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The FDA’s regulatory efforts

As it makes its decision on how to regulate cannabis products and CBD specifically, the FDA has been turning to CBD users and entrepreneurs in the CBD industry for help. They held a public hearing earlier in the year, and they are also turning to Twitter to seek advice from people whose livelihoods may be tied up in the CBD industry boom. The FDA is taking comments about ideas for regulatory processes up until July 16, 2019, a date which was extended from the initial July 2 deadline due to increased participation.

However, it isn’t just small businesses who are looking to market CBD-infused products. Large companies like Ben & Jerry’s and Coca-Cola are desperate to make products with CBD in them: They just can’t take that risk until the FDA has determined what forms of CBD in food or drink is legal at the federal level.

Lucrative payoffs

Many people are wondering why big companies are looking to get into the CBD business. The answer lies where it usually does with large corporations: Money. Putting CBD in a food or beverage allows for a large markup of price. Manufacturers have to pay for the CBD they are putting in the beverage, but it can also be incredibly profitable.

Going back to Oki, for example, this brand can charge $5 for a 16-ounce bottle of water that has been infused with CBD. To compare, brands like Nestle are charging about 54 cents for a 16.9-ounce bottle of purified water. Hemp-infused honey is another example of a product that can be marked up when CBD is included in the product, and customers have demonstrated that they are willing to stomach that markup for the benefits CBD purportedly provides.

State-level businesses

Most businesses that deal with CBD products, selling oils, tinctures, or creams for chronic pain and other ailments, do not aim as big as companies such as Oki did. For one, these businesses may not be located in a state where recreational cannabis use is legal. Therefore it can be harder to market on a larger scale. Bandwidth and financial resources contain many of these businesses to local and regional markets or a small (but growing) community online.

States, where medical cannabis is legalized, have been developing different strategies for dealing with CBD in food and beverages while the FDA makes their decision on how they will federally regulate it. These strategies range from QR codes to labeling requirements.

Final thoughts

Currently, CBD in foods and beverages is not federally legal. However, hemp-derived CBD creams for pain are legal in all 50 states, so if you’re looking to try one, consider Relevium.