Curaleaf Holdings Inc.’s (CURA.CN)(CURLF) executive chairman says “ambiguity and lack of transparency” from regulators contributed to the company’s marketing of cannabis-related products that prompted a warning from the U.S. Food and Drug Administration (FDA) in July.
Speaking on a conference call with analysts following the release of the company’s second quarter earnings after the closing bell on Tuesday evening, Boris Jordan complained about the FDA’s lack of clear guidelines for the CBD market.
“There was a tremendous amount of ambiguity and lack of transparency from the regulator about what the rules are,” Jordan said. “Congress passed the law in December, and yet the FDA has not come out and tied it to what you are allowed to do and what you are not allowed to do with the CBD market.”
Cannabidiol, or CBD, is a non-psychoactive cannabis compound touted to have many medicinal benefits. The 2018 Farm Bill removed legal restrictions on hemp-derived CBD in December. The FDA, the agency tasked with regulating CBD products, has held hearings and put out calls for comments and data.
In July, the U.S. federal health regulator accused Wakefield, Mass.-based Curaleaf of making “unsubstantiated claims that the products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions or diseases,” citing examples on the company’s website and social media channels.
Curaleaf responded by shutting down its hemp blog and removing links to third-party research identified by the FDA. The company has promised full compliance with FDA requirements.
“In the 30 years that I have built many, many billion plus [dollar] companies, moving fast and getting market share in a new industry is very, very important. And you will have missteps along the way. That’s just part of doing that. Those that don’t take risk never make it to the finish line,” Jordan added.
“I'm not pointing my finger at the FDA . . . These are new industries moving at a very fast pace and they haven't even written the rules.”
CEO Joe Lusardi has previously lashed out at the FDA. In a May interview with Yahoo Finance, he called the regulator “out of step with the American public.”
Curaleaf is placing big bets on growing demand for CBD-infused products, including skin creams, massage oil and lip balm. The company plans to begin shipping its 15-product beauty and wellness line this month.
“Although CBD is a nascent market, we’re highly encouraged by the amount of interest that has been shown by national retail,” said Lusardi on Tuesday’s conference call.