The Billion-Dollar Marijuana-Industry Spinoff You Haven’t Heard of Yet

Change is coming for a small but blooming corner of the marijuana industry.

A compound in marijuana that’s been linked to a range of potential health benefits — but doesn’t cause a high — is increasingly being eyed for use in salves, oils, balms, and beverages. It’s also the active ingredient in a new drug that’s on the cusp of federal approval.

Cannabidiol, or CBD, is estimated to make up a roughly $1 billion industry. If and when the Food and Drug Administration approves the new CBD-based drug— a decision currently slated for the end of June— it will turn the compound into one that can be legally prescribed by a doctor.

That approval will also jump-start demand for products that have not been federally reviewed, opening up a huge opportunity for retailers and manufacturers to either work alongside the new regulations or take advantage of the legal grey area in which they’re currently operating.

The move could unleash what Drug Enforcement Administration public affairs officer Barbara Carreno called a “sea change” for the existing market of less expensive but untested and potentially risky CBD products, such as those sold in convenience stores and marijuana dispensaries.

The drug that could revolutionize the CBD market

Since at least 2017, drug company GW Pharmaceuticals has been presenting strong research data to suggest that its CBD-based medicine, a syrup called Epidiolex, can treat the symptoms of two rare forms of childhood epilepsy that are characterized by violent seizures (known as drop seizures).

Although the Food and Drug Administration is not slated to make a final decision on the drug’s potential approval until June 27, experts say an official green light is likely.

“This is clearly a breakthrough drug for an awful disease,” John Mendelson, a panel member and senior scientist at the Friends Research Institute, said during a public pre-approval meeting to discuss the drug’s scientific benefits in April.

Orrin Devinsky, a neurologist at New York University Langone Health and a lead author on some of the GW Pharmaceuticals studies, told Business Insider, “I’d personally be very surprised if this drug was not approved.”

If Epidiolex is approved, the DEA has 90 days to shift the classification of marijuana-derived CBD from the current categorization as something with “no recognized medical use” to either a Schedule 2 or 3 drug, much like the popular ADHD medication Adderall.

Once that happens, “all the [CBD] manufacturers have to be registered with us,” Carreno said. “That’s going to make a huge difference to the industry.”

But for now, thousands of CBD products exist in legal limbo…

Full story at Business Insider

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