The most valuable marijuana company in the U.S. is under fire for how it’s marketing and selling CBD, the trendy cannabis extract now sold at national retailers.
The Food and Drug Administration sent Curaleaf Holdings Inc. President Joseph Lusardi a letterdated Monday warning the company its lotion, pain-relief patch, tincture and disposable vape pen are considered drugs because they claim to treat conditions like pain, anxiety and ADHD, according to language on its website and social media pages.
The Wakefield, Massachusetts-based company’s share price plunged more than 14% on Tuesday, the biggest drop this year.
The letter is currently under review by our legal counsel,” the company said in an emailed statement, noting it will reply within 15 days and intends to “work collaboratively” with the agency to address the concerns. “Curaleaf is fully committed to complying with FDA requirements for all of the products that it markets.”
CBD, which doesn’t produce a high, is legal when derived from hemp, but the FDA hasn’t yet approved its use as an ingredient in food and beverages. The only clinically approved use for the cannabis compound is to treat rare forms of childhood epilepsy.
Still, CBD has been showing up in a host of consumer products since it was decriminalized last year by Congress. CVS Health Corp. began selling nonintoxicating hemp-derived CBD at more than 800 of its stores as part of a distribution deal with Curaleaf in March. The FDA didn’t mention CVS in the letter. CVS didn’t immediately reply to a request for comment and its Curaleaf webpage wasn’t loading as of 10:34 a.m in New York.
The FDA hasn’t determined how it will regulate CBD but has said it will go after companies that claim to treat diseases with the product without agency approval.
“Selling unapproved products with unsubstantiated therapeutic claims — such as claims that CBD products can treat serious diseases and conditions — can put patients and consumers at risk by leading them to put off important medical care,” acting FDA Commissioner Ned Sharpless said in a statement Tuesday when the letter was made public. There are still “many unanswered questions about the science, safety, effectiveness and quality of unapproved products containing CBD,” he said.
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