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Cannabis store thumbs as FDA manager's departure leaves CBD regulation in limbo

Cannabis shares fell across the board Wednesday, as investors refused the surprise news that the head of the US Food and Drug Administration has resigned and leaves the fate of the cannabis ingredient's CBD in regulatory limbo. Commissioner Scott Gottlieb, known for his efforts to stop the teenage struggle, will go down next month after two years in the role. Only last week did Gottlieb say that public meetings are held once in April to hear from relevant parties about how to best regulate the CBD derived from hemp, which was legalized in December in the agriculture bill of 2018. The FDA is responsible for regulating the CBD, a non- psychoactive ingredient in cannabis not included in hemp cultivation due to lack of research on its long-term effects on human health. CBD is widely held to have wellness features, and many cannabis companies plan to launch food, beverages and cosmetics that contain it, but the FDA has said they cannot do so without their prior approval. Gottlieb told a hearing before a subcommittee on household fees last week that the FDA will set up a team of experts to inform him of regulatory options for the subject. The FDA has already approved a CBD-based medication designed to treat a very serious type of childhood epilepsy, but it was based on traditional clinical trials, a long and expensive process that companies would prefer to avoid. Jonathan Havens, co-chairman of Cannabis Law Practice and Vice Chairman of Food and Beverage Practice at…

Cannabis shares fell across the board Wednesday, as investors refused the surprise news that the head of the US Food and Drug Administration has resigned and leaves the fate of the cannabis ingredient’s CBD in regulatory limbo.

Commissioner Scott Gottlieb, known for his efforts to stop the teenage struggle, will go down next month after two years in the role. Only last week did Gottlieb say that public meetings are held once in April to hear from relevant parties about how to best regulate the CBD derived from hemp, which was legalized in December in the agriculture bill of 2018. The FDA is responsible for regulating the CBD, a non- psychoactive ingredient in cannabis not included in hemp cultivation due to lack of research on its long-term effects on human health.

CBD is widely held to have wellness features, and many cannabis companies plan to launch food, beverages and cosmetics that contain it, but the FDA has said they cannot do so without their prior approval. Gottlieb told a hearing before a subcommittee on household fees last week that the FDA will set up a team of experts to inform him of regulatory options for the subject.

The FDA has already approved a CBD-based medication designed to treat a very serious type of childhood epilepsy, but it was based on traditional clinical trials, a long and expensive process that companies would prefer to avoid.

Jonathan Havens, co-chairman of Cannabis Law Practice and Vice Chairman of Food and Beverage Practice at Saul Ewing Arnstein & Lehr and a former FDA supervisory adviser, said that the regulator’s position on the CBD has been consistent for years.

“The FDA issued a similar statement after the 201

4 Agriculture Bill,” he said. “Since this time, people said,” why is the FDA involved? “And” it’s a babysitter! “But the FDA has said the same thing for a while and not because of the CBD’s past history of being a controlled substance, but because it was studied in a clinical trial and approved, and you can’t just add a drug ingredient to food products.”

He noted that Gottlieb has said that the FDA was open to alternative pathways to CBD approval, including allowing only low concentrations in food and drink and keeping high concentrations for drugs to encourage further research.

Still, “the one who follows the FDA regulations knows that this is not a six-month process,” he told MarketWatch. “Gottlieb has said to do it fast, the FDA can come back to Congress and say” we may need to delegate another authority or make a new proposition. “

If you missed it: Hemp is now legal in the US, so what does it mean for pot companies?

In Canada, British Columbia’s first collection of cannabis tax revenues is expected to come to just $ 68 million over the next three years, according to data provided by the regional finance minister quoted in the Vancouver Sun. It is well below the estimate of $ 200 million over three years included in the 2018/19 budget. Cannabis sales have been at a slower rate than expected in Canada after full legalization in October, due to an early lack of substance after provinces underestimated initial demand and other factors.

See now: Canada’s black cannabis market remained strong in the fourth quarter

In business news, Namaste Technologies Inc.

N, -7.37%

said late Tuesday that PricewaterhouseCoopers LLP has resigned as an accountant and that it is unlikely to meet on March 31 for submission of audited financial statements.

“The company will continue to assess this and will update the market over time,” Namaste said in a statement.

Read: How the unpolluted rise of the potato industry has made dime bags a billion dollars business

The news comes just a few weeks after Namaste dismissed his CEO for reason after discovering self-trading in the sale of its US subsidiary in 2017. The company has launched legal action against Sean Dollinger for damages and disgorgement. The stock is stopped in the market for appeal.

For more, see: Canadian cannabis company Namast’s stock slips by CEO are fired for cause

Shares of New Age Beverages Corp.

NBEV, -3.58%

slipped 4.3%. The company has said it plans to launch a series of CBD infused drinks in collaboration with the Marley brand created by the family of late Rastafarian reggae singer Bob Marley.

Elsewhere in the sector, Aurora Cannabis Inc.’s US listed shares were 1.9%, giving rise to some of its previous gains made after Cowen named it a top pick in the cannabis industry.

Tilray Inc.

TLRY, -0.49%

was down 0.2%, Hexo Corp.

HEXO, -0.73%

was down 0.3% and Aleafia Health Inc.

ALEF, -4.90%

ALEF, -4.90%

was down 6.1%. OrganiGram Holdings Inc.

OGRMF, -2.33%

was down 3.4%, CannTrust Holdings Inc.

CTST, [1.36% TRST, [0.8459007] -0.84% ​​

was down 1.5%.

GW Pharmaceuticals PLC

GWPH, -4.15%

fell 4.6% and Cronos Group Inc.

CRON, -4.14%

CRON, -3.97%

was down 5.1%. Canopy Growth Corp. shares

-3.05%

WEED, -2.73%

wear 2.5%

See: People in states where marijuana is legal eat more cakes and ice cream

Horizons Marijuana Life Sciences ETF

HMMJ, -1.84%

was down 1.6% and ETFMG Alternative Harvest ETF

MJ, [1.68%] was down 1.8%.

S & P 500

SPX, -0.40%

and Dow Jones Industrial Average

DJIA, -0.41%

was about 0.4%.

For all MarketWatch’s coverage of cannabis companies, click here.

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Faela