I am writing in response to the April 21 article titled, “CBD manufacturer says lack of government regulation put him out of business.” While I have advocated for and wholeheartedly agree that regulatory oversight of CBD and CBD products is needed for the long-term success of the hemp industry, I will respectfully disagree with lawyer Bob Crumley’s conclusion that the N.C. Department of Agriculture and Consumer Services shoulders the blame for the closure of his business. We at NCDA&CS have urged FDA to provide guidance on CBD regulation and sought regulatory authority at the state level in the absence of such federal guidance. We have been very active on this issue. Building a business around an emerging crop and an unregulated product should be recognized as highly speculative and bearing inherent risks to begin with. The rewards for taking on such risks so early can lead to great returns for investors or great disappointment. This is by no means a new business concept, but it most assuredly does deserve some acknowledgment as a contributing factor. And, I appreciate that the article did note that production far exceeded the need, pointing out a price drop from $40 to $50 per pound to $3 to $5 a pound for hemp. As I have said many times, when agriculture is presented with an opportunity to take advantage of a profitable market, we will overproduce ourselves right out of a profit. The hemp industry in general remains in its infancy. In North Carolina, specifically, hemp production exists under a pilot program intended for further research to see if it is a viable crop for North Carolina growers. Viable meaning, can it be grown for-profit, and are there markets for the crop being grown? As a farmer for over 30 years, I am not sure I have ever seen higher expectations placed on a still-developing crop. And, those expectations and promises of high prices for hemp hinged mainly on a burgeoning CBD market. Even with a largely unproven market, we saw explosive growth in applications to grow hemp and registration of processors. Wanting this industry to have the best shot at succeeding, we first sought guidance and rules from FDA, recognizing that national regulations and standards were preferable to a patchwork of state regulations that would differ from state to state.
Assistant Commissioner Joe Reardon, who oversees regulatory programs for the department and who has over 30 years of leadership and experience with the Food and Drug Protection Division and food safety, testified before FDA in May of 2019 about the need for regulations and guidance. In his testimony and in department comments submitted to Docket Number: FDA-2019-N-1482 regarding the regulation of CBD products, the following was plainly stated:
“A uniform and consistent approach is critical to ensure consumer safety and long-term viability of this emerging industry. Consumers and industry alike benefit from a strong regulatory framework with standards for the identity, purity, strength and composition of cannabinoid-related compounds.
… Without FDA’s guidance and leadership, individual states are already carving out their own regulatory exceptions for CBD, creating a patchwork approach that hinders the nationwide
growth of this industry and potentially endangers consumer safety. We urge FDA to resolve the statutory issues and promptly establish a legal pathway for the safe production of CBD and cannabinoid related compounds derived from industrial hemp.” But our efforts did not stop there. We sent over 400 advisory letters to the industry, educating them on the legal status of CBD in food, dietary supplements, and the prohibition on health claims. We conducted 100 inspections of retail stores. 85% of the stores sold CBD food products -half of which are products traditionally marketed to children; 53% of the stores sold CBD dietary supplements; and 15% of the stores sold CBD products that made some form of a health claim. Armed with this information, we sought authority from the N.C. General Assembly through the 2019-2020 Farm Act to write regulations governing the processing, production, and packaging of cannabinoid related compounds from industrial hemp modeled after the 21 CFR Part 111. Unfortunately, legislation regarding CBD regulation was not approved. At the end of the day, we cannot inspect or regulate an industry without the authority to do so. We want hemp to be a viable crop for farmers and processors. We know it can be grown here, and it has many uses. CBD holds promise, but more work is needed to ensure consumer confidence in these products. We will be back at the legislature asking for the authority to establish a voluntary regulatory program to inspect these facilities. Consumers and industry alike benefit from a strong regulatory program that establishes standards for the identity, purity, strength and composition of CBD-related compounds. We will continue to work, as we so fervently have to this point, to reach this outcome. While I understand Mr. Crumley’s frustration, his placing of blame on the North Carolina Department of Agriculture and Consumer Services is just not rooted in fact.
N.C. Commissioner of Agriculture