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The Fall of the Hemp Industry: Could FDA Inaction Be to Blame?

The hemp industry faces an uncertain future after experiencing a major plunge in 2022, even more so than predicted. The USDA has started a weekly Market Report containing pricing and volumes. According to the U.S. Department of Agriculture’s (USDA) National Hemp Report, the value of hemp production for the United States totaled $238 million last year – down 71 percent from 2021.

Stakeholders believe that the Food and Drug Administration’s (FDA) refusal to issue regulations for CBD products is largely responsible for this decline, prompting the House Oversight and Accountability Committee to launch an investigation into the agency’s lack of action.

An important factor in the drop in hemp production this past year was the FDA’s refusal to issue regulations for CBD products. With clear regulation, many companies can enter the market because they need assurance that their products comply with safety standards.

This has created an uncertain environment that prevents good-faith actors in the industry from providing helpful products to consumers.

FDA Doesn’t Issue Regulations For Hemp-Derived Products

The FDA refuses to set regulations for hemp-derived products like CBD because of their stance that the substance involves potential health risks. In addition, the agency has cited concerns over the accuracy of labeling, potency levels, and contamination from heavy metals or other chemicals, as they have yet to take steps to create a regulatory pathway for these products.

Despite this stance, many stakeholders in the industry argue that with appropriate safety standards and oversight, hemp-derived products can offer substantial medicinal benefits without posing any real risk to consumers.

In light of this issue, the House Oversight and Accountability Committee is investigating the FDA’s lack of action. Rep. James Comer (R-KY) – chairman of the Committee – has argued that “the agency’s claim of a lack of a regulatory pathway is not only an insufficient rationale for inaction, but it is directly affecting the welfare of the American public.”

The investigation will examine why the FDA has not taken steps to create a regulatory pathway for hemp products like CBD, which may help pave the way for future regulations in this area.

If the FDA sets a regulatory pathway for hemp-derived products like CBD, it could open the door for more research into their potential medicinal benefits. This could alleviate confusion surrounding these products and ensure consumers can access safe, effective products. In addition, setting regulations would create a level playing field in which all companies offering hemp-derived products must abide by safety standards and good manufacturing practices.

US Hemp Roundtable Statment

The US Hemp Roundtable has stated in response to the investigation that they “strongly support efforts by Congress to push regulators to act swiftly and responsibly” when it comes to creating a regulatory framework for hemp-derived products. They also urge the FDA to “seriously consider the economic, scientific and medical benefits that responsible regulation of hemp-derived products can bring.”

With any luck, this investigation will help shed some light on why the FDA has failed to set regulations for CBD products and ultimately lead to a better regulatory framework for the industry.

“We are deeply grateful to Chairman Comer and the Oversight Committee for launching this critical effort on behalf of hemp farmers and CBD consumers,” stated Jonathan Miller, General Counsel of the US Hemp Roundtable. “The Chairman has been a steadfast supporter of our industry, and we look forward to working in a bi-partisan manner to ensure that hemp extracts like CBD are appropriately regulated.”

cbd hemp oil hand holding bottle of cannabis oil 2021 09 01 06 08 24 utc scaled

The lack of federal action is not only limiting the potential of hemp-derived products like CBD, but it is also crippling the entire supply chain. With no clear regulations in place, many farmers are choosing to forgo growing hemp altogether due to its uncertainty and risk.

This has led to a shortage of hemp on the market, driving up prices and reducing profits for everyone involved. Like with cannabis, until there is more clarity from the FDA about what regulations need to be in place for hemp-derived products, farmers may continue to decide that it’s better business not to grow at all.


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