Weed Week: CBD producers stuck in limbo as US regulators take a cautious approach
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On the local regulatory front, industry players are awaiting a September update from the Therapeutic Goods Administration (TGA) on whether it will allow cannabidiol-only (CBD) products to be sold over the counter in pharmacies.
So with that in mind, we’ve turned to the US market for a regulatory update, where the (TGA equivalent) Food & Drug Administration released preliminary guidance on the clinical trial process for cannabis treatments.
The 2018 Farm Bill legalised hemp at a federal level, as long as it contained less than 0.3 per cent THC. But it stopped short of full legalisation for THC and CBD cannabis products, and shifted oversight from the Drug Enforcement Agency to the FDA.
Because the FDA has classified CBD as a drug, it doesn’t allow companies to advertise its benefits in over-the-counter products.
An FDA spokesperson told MarketWatch there were still questions around the “science, safety, effectiveness” of CBD products. The agency also released a report to US Congress which said many CBD products didn’t contain the amount claimed on the label (or in some cases not at all).
For now, the FDA is still laying out the development framework for how US companies can bring CBD products to market, which at this stage still requires a clinical trial process to ensure consistency.
Like the TGA’s pending decision on over-the-counter sales, the FDA is taking comments from industry players as it works towards a standardised framework for bringing products to market.
Back on the local market, the cohort of ASX-listed cannabis (and cannabis adjacent) stocks tracked by Stockhead had a relatively strong fortnight as global stocks remained buoyant.
Of the 34 companies tracked by Stockhead, 18 posted a gain over the last two weeks while 15 finished in the red (with one trading flat).
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The company provides product-tracing technology for clients across a range of industries including Toronto-based cannabis ecommerce company Namaste.
YPB, which has a market cap of around $13m, responded by saying it wasn’t aware of any catalysts that prompted its share price to jump from 0.4c to 0.7c.
That was followed by a chairman’s address yesterday, which highlighted a difficult 18-month restructure including the “unavoidable necessity to issue new equity at low prices” to avoid collapse.
With a revamped cost base, the company said it’s now implementing a revamped sales strategy with a “tighter industry focus” including wine, dairy, natural wellness and legal cannabis, targeting markets in Australia and China.