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USDA READY TO ENFORCE STRICT RULES ON HEMP PRODUCTION


While the FDA takes more time to determine CBD safety, the U.S. Department of Agriculture is preparing to enforce strict regulations on hemp production. In other words, one end of the supply chain is experiencing strict rules while the other end remains uncertain. Indeed, it is unfair to the nascent industry since THC testing focuses on the flower, which products that are made from the flower downstream are not actively regulated by the appropriate federal agency.

Again, the growers are left holding the bag.

The hemp industry agrees there needs to be continued study of cannabinoids, terpenes, flavonoids and all components of hemp intended for consumer ingestion. However, the number of people using CBD already means products need to be regulated responsibly now. The FDA hasn’t done anything, at least from a public perspective, to make it clear what they intend to do with hemp-derived products.

… BACKSTORY

Lack of regulatory direction from the FDA is slowing growth in mass sales channels. CBD manufacturers have seen wide adoption of their products into mainstream retail chains in recent months, so why aren’t they turning profits as rapidly as expected? The federal government is the culprit, according to some. The delay in regulation of goods containing hemp-derived products such as cannabidiol by the U.S. Food and Drug Administration (FDA) is at least partially to blame, they say, because the agency’s inaction has invited increased competition at retail and maintained inconsistencies throughout the supply chain. FDA remains concerned about CBD safety and won’t be rushed by political pressure to allow its use without a prescription. Meanwhile, the agency needs more data to determine safety before it can decide whether it will move forward with regulation. The absence of an interim or final regulatory framework from the FDA has led to a very low barrier of entry for new companies entering the CBD category, which has led to increased competition especially in the natural product retail channel. Continued regulatory ambiguity also has created state-by-state uncertainty affecting many of our retail partners.

FDA policy inconvenient for growth: The day after the 2018 Farm Bill was signed into law, making hemp a legal agricultural commodity in the United States, the FDA reiterated its policy that any hemp-derived product intended as an ingredient in food, beverages, dietary supplements, animal feed, cosmetics or drugs remains in its jurisdiction.

At issue: CBD cannot be put in food without a New Drug Application, which would make it an over-the-counter drug at large cost to the company applying. But the FDA is being lax in its enforcement. From our perspective the FDA is going to change the rules in the next year. Which means the review period of the more-than 12,000 comments will probably take a long time, and the FDA has put no timeline for answers.

WHAT DOES THIS MEAN FOR NORTHRIDGE?

Our Business Model addresses the Hemp Industry Sector by planning to produce a medicinal grade Hemp isotope within a sphere of influence outside of the retail markets. Therefore, the projected income stream at Northridge is not affected or the cultivators following our lead.


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