For an industry that’s projected to reach $US20 billion ($29 billion) by 2024 in the US, the cannabidiol (CBD) market there is very much the wild west.

A study from researcher Leafreport comparing 3500 products for the sale in the US from 53 brands found a large range of discrepancies in prices per the stated CBD/milligram on the label.

The study states the differences in prices versus quality has created a confusing marketplace for buyers: the 14 per cent of all Americans who told a Gallup poll in August they were cannabis users.

For Australian consumer products companies like Elixinol Global (ASX:EXL) and Ecofibre (ASX:EOF) that are trying to position themselves as top-end producers, this is an immediate problem as they try to differentiate their brand from thousands of others that cover the gamut of quality levels.

For pharmaceutical companies such as Zelira Therapeutics (ASX:ZLD), Medlab Clinical (ASX:MDC), Rhinomed (ASX:RNO) and Botanix (ASX:BOT) that are targeting the highly competitive US market for cannabinoids, it muddies the waters as to what is medicine and what will work better as a placebo.

The Leafreport study looked at tinctures, gummies, capsules, pet products, topicals, isolates, e-liquids and vaporisers, and bundles.

It found huge discrepancies between prices for similar products in each category, with more expensive not necessarily equating to higher quality or more CBD.

 

Other issues in the US pot market

Leafreport did not test the products themselves, but a regular news story in the US is around testing products to see if they contain what they say they do.

Often, they don’t.

A CBS report in September found no evidence of pesticides or heavy metals, or too-high THC levels, but CBD levels were varied: some contained less, some contained significantly more than stated on the label.

The US Food and Drug Administration (FDA) has been playing catch-up, following the federal law change in December 2018 which legalised hemp-derived CBD.

Companies selling products with hemp CBD, or marijuana, can’t market it as medication without FDA approval, despite many US states legalising cannabis as a medicine.

The regulator has approved Epidiolex as a medication for childhood epilepsy, but no other drugs.

In November, the FDA sent warning letters to 15 companies for illegally selling CBD products as therapeutics, but is still on the fence over cannabis as a food.

It said in November it “cannot conclude that CBD is generally recognised as safe (GRAS) among qualified experts for its use in human or animal food”.

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