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It is no secret that the CBD is in full swing.
The non-psychoactive component of cannabis has been highlighted in products ranging from face masks and lotions to cupcakes and baked slats. And some brands of CBD have even signed agreements with traditional pharmacies such as CVS and Walgreens to sell CBD news on shelves.
Analysts at the investment bank Cowen expect the CBD market to grow from about $ 1 billion to more than $ 16 billion by 2025.
One problem: Most CBD products actually contain very little CBD, revealed a blind analysis of 20 CBD products made by CannaSafe Laboratories, a California cannabis testing company.
Read more: The FDA is setting up a panel of experts to understand how to manage the billion-dollar CBD industry
In addition, the analysis revealed that many of the tested products (vape cartridges, beverages, sweets and creams, for example) contained dangerous gases such as ethylene oxide and l & # 39; ethanol, which are especially harmful when they are heated and inhaled.
The results of the study were shared exclusively with Business Insider. She found that of the 20 popular products tested, only three actually matched what the labels claimed.
The tests were conducted blind for accuracy. The names of the manufacturers have not been reported.
"The results were a little worse than expected," said Aaron Riley, CEO of CannaSafe, in an interview with Business Insider. "I was expecting to see between 20% and 30% of the vote, but it was not a total shock."
Based in Van Nuys, California, CannaSafe uses state-of-the-art chromatographs to test the cannabis content of substances such as activity, pesticides, heavy metals and various microbes for more than 700 customers. mainly small brands.
Riley explained that some of the products tested exhibited "incredibly high levels" of particularly dangerous solvents when spraying and inhaling.
According to Riley, about one-eighth of the California market is in compliance with regulations. In this subset, the failure rate is low, with about 5% or 6% of products failing, Riley said.
But things improve regularly. Riley said that since his company started testing cannabis-based products in 2017, the failure rate had dropped from 70% to around.
While the California Bureau of Cannabis Control had this year passed regulations on licensed and banned cannabis products (and requiring products to be tested in certified laboratories), the CBD is still in a legal gray area at the federal level.
"I would say that regulation has been very effective in mitigating risk and damage to consumers," Riley said. "I think we're going to see this stuff in all areas, and probably in two or three years it will be even lower than that."
"They only see dollar signs"
Problems with these products highlight the challenges of creating supply chains to meet the huge appetite for a product that was illegal a few months ago.
After California's testing regulations came into effect earlier this year, an industry website, Leafly, said the results of tests made on Chinese-made vats showed that they often contained lead. , which infiltrated into the cannabis oil and then into the consumer's blood. These products were just not rigorously tested before, says the report.
And in other states, such as Oregon, audits have revealed that lab test standards are often inadequate, exposing cannabis users for medical and recreational purposes to harmful pesticides, an increased risk when the product is burned and inhaled.
Read more: Wall Street thinks the $ 1 billion market for the CBD could rise to $ 16 billion by 2025
For Riley, the quality of the operators – and therefore the product – boils down to the experience.
"There are all these people running to this industry – they only see dollar signs or whatever," Riley said. "You have an economy in very very strong growth."
The most successful operators, said Riley, come from "interrelated" industries, like agriculture management, and have experience growing large amounts of crops safely, rather than "cultivating" weed in their garage ".
Illicit cannabis products or the "black market" still use a lot of pesticides. It's cheaper and easier than growing marijuana safer, and there is no incentive to test illegal products.
DBC entrepreneurs want more regulation and clarity
Some CBD brands have stated that they would like greater regulatory clarity from the federal government.
Since Congress passed the agricultural bill last year, which legalized hemp, many people in the industry thought it would be legal to inject products containing CBD derived from hemp. However, the health departments of some states, including New York, have forced retailers and restaurants to remove food products containing CBD from their shelves.
Outgoing Food and Drug Administration Commissioner Scott Gottlieb formed a working group to "explore the potential routes" of "commercially available" CBD-infused food supplements and food products.
The FDA will hold a public hearing on the issue in May. The main challenge is to determine if CBD is a drug and therefore needs to be regulated and sold as a pharmaceutical product, or if it can be considered an additive or dietary supplement and sold in stores.
The existence of CBD in a gray area at the federal level "is neither good for the industry nor for consumers," said Kerrigan Behrens, former banker, co-founder and director. from Sagely Naturals, a Los Angeles-based CBD company.
"We stick to the same standards as any other" over the counter product, Behrens said. "Many brands do not do that."
Peter Horvath, CEO of Green Growth Brands, a cannabis-producing company with a range of branded CBD-based products distributed at traditional retailers like DSW and Simon Property Group, said in a previous interview that a more regulated stringent FDA would be detrimental to competitors.
"If the FDA collapses suddenly, our competitors would have stocks they could not sell," Horvath said. "If I'm mean, I hope they're bad."
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