Author: Chris Hudock Published: July 17, 2019
By William Sumner, Hemp Business Journal Contributor
Hemp-derived CBD is all the rage right now, even as confusion and illegality abound. Prompted by the passage of the 2018 Farm Bill, which legalized hemp and hemp derivatives like CBD, investors and entrepreneurs have been scrambling to capitalize on the increasingly popular substance. The United States Food and Drug Administration (FDA) has tried its regulatory best to pump the breaks on the phenomenon by asserting its authority and cracking down on illicit sales of CBD supplements.
Standing on the sidelines are large-scale national retailers, many of which understand the potential profits but prefer not to pique the ire of federal authorities. While some retailers are staying out of the CBD craze completely, others are splitting the difference by offering topical CBD products, which are less likely to draw the legal wrath of the FDA.
In March, CVS and Walgreens became the first national retailers to announce that they were peddling CBD creams, patches, and sprays in their stores. CVS was selling them in eight states (Alabama, California, Colorado, Illinois, Indiana, Kentucky, Maryland, and Tennessee), while Walgreens marketed them in nine (Colorado, Kentucky, Illinois, Indiana, New Mexico, Oregon, South Carolina, Tennessee, and Vermont).
Following suit, Kroger — the nation’s largest grocery chain — announced last month its plans to sell CBD products in 945 stores in 17 U.S. states (Arizona, Arkansas, Colorado, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Nevada, Oregon, South Carolina, Tennessee, West Virginia, Washington, Wisconsin and Wyoming).
Both chains were deliberate in noting that their offerings would be limited to topicals, while stopping short of any foods, beverages, or dietary supplements as the FDA determines its policies for oversight and quality assurances.
For now, corporate retailers’ selling CBD-infused beauty and skin-care products brings far less legal jeopardy and exposure to liability, which explains their choices in stocking such types of products first. The FDA is tolerating topicals and oils containing CBD, so long as marketers refrain from making exaggerated health claims. Meantime, the FDA is considering any avenues by which companies could add CBD to food and dietary supplements. The agency closed its period for public comment this week, and Dr. Amy Abernethy, FDA’s principal deputy commissioner and acting CIO, pledged to provide guidance by the early fall.
Meantime, pharmacies and grocery stores are not the only retail players in the market. Last year, the cosmetics chain Sephora began involving itself with CBD topicals when it started selling a high-CBD body lotion made by the luxury brand Lord Jones through its online shop. Now the company is offering a variety of CBD lotions and body oils in 171 of its retail stores nationwide. Not to be left out, the luxury retailer Neiman Marcus is also offering CBD topicals as well.
The cannabis company Green Growth Brands has likewise made some major in-roads with national retailers. Recently, the company signed with Brookfield Properties and Simon Property Group, two of the largest mall owners in the U.S., to sell branded topical CBD products. The company signed similar deals with Designer Shoe Warehouse and American Eagle.
Perhaps the biggest adopter of CBD topicals yet is the organic grocery chain Whole Foods: With little fanfare, the company has begun selling CBD products throughout its stores, a practice made all the more significant given that Whole Foods isowned by Amazon.
Should the retail momentum behind such large national retailers be aided by favorable treatment from the FDA, CBD products will truly have made a game-changing impact beyond the countertop of the local gas station.