(GSB) – Alongside stock market losses, cannabis stocks were mixed Thursday ahead of the first public hearing by the U.S. Food and Drug Administration aimed at providing information on the substance and its ingredients. The goal of the hearing is a regulatory framework for CBD. The hearing comes after Congress legalized CBD, which is derived from the hemp plant.
The FDA will listen to testimony from proponents and opponents to CBD, which the FDA has yet to fully research. The watchdog views CBD as a drug. The FDA has only approved one drug with CBD: GW Pharmaceuticals PLC’s Epidiolex, which treats childhood epilepsy.
Companies hoping to launch edibles and beverages with CBD are expected to present evidence for the benefits of the substance.
We are reviewing available databases and medical literature about CBD’s safety. Thus far, the data appear insufficient. A key goal of our upcoming public hearing on 5/31 is to obtain better information. We hope some of the knowledge gaps can be filled but there is uncertainty.
— Dr. Amy Abernethy (@DrAbernethyFDA) May 23, 2019
The FDA has cracked down on companies claiming that CBD treats illnesses, which the Administration argues is not back by scientific evidence.
Marijuana Business Daily reports that U.S. retail cannabis sales should rise 35% in 2019, approaching the $30 billion mark by 2023.
“Interest continues to skyrocket,” said D.C. attorney Miriam Guggenheim, co-chair of the food, drug and device practice group at Covington & Burling. “It is mainstream, interest is mainstream. It is not fringe anymore, which doesn’t mean mainstream companies are ready to jump in. But they want to be prepared to do so once the legal landscape is clarified.”
Cresco Labs Inc. shares were up 4.7% early Thursday. The company reported positive first-quarter earnings. The operator, which is based in Chicago and serves multiple states, claimed a net loss of $7.6 million. Revenue rose 300% to 21.1 million and was up 24% from the quarter prior.
MedMen Enterprises Inc. shares fell 3.5% after the company said it would cut executive salaries due to growing losses, which in the fiscal third-quarter comprehensive net losses of $63.1 million, approximating 20 cents per share.
Trade Via Trend sees cannabis, and other markets as sitting on a support level, with a possible change of trend on the horizon. Pot stocks could be due for profit-taking.
Across the board, the stock market is facing resistance. Since the last stock market correction, pot stocks have traded more in line with the broader market, so expect them to pull back if the S&P does, as well.