The New York City Department of Health and Mental Hygiene last week issued a ban on the use of CBD (more formerly known as cannabidiol, a non-psychoactive chemical component of cannabis) in food and beverage items sold in restaurants, bars, and cafes.
Los Angeles, Maine, and Ohio have also recently seen similar crackdowns by city and state officials. These restrictions on sales are due in part to the fact that federal regulators haven't had a chance to set standards for this burgeoning category. In the case of New York City, the Department of Health is following federal guidelines that CBD is "not safe as a food additive."
Considering that CBD tinctures aren't difficult to find or order online, people can (and will) still make infused food and drinks on their own. Moreover, entrepreneurs in the space (other than restaurant, bar, and cafe owners) haven't seen the recent restraints as too big of a roadblock.
Take Prima, a startup in the CBD space created by Christopher Gavigan, the co-founder of The Honest Company. Prima has yet to launch any products, but it has already received $3.3 million in funding based on plans to create a spate of "emerging beauty and pain management" products around hemp cannabinoids. The goal is to expand into ingestible products, too –– but while regulators sort out their stance on what's safe, the company will have plenty of other items to launch. Gavigan, who likes "very nascent, stigmatized markets," seems up for the challenge.
Meanwhile, upscale retailer Barneys is getting in on the cannabis trend with the announcement of its new shop, "The High End," at its Beverly Hills location. While it seems that much of the concept space will focus on luxe marijuana accessories like ashtrays and storage boxes, it's a natural fit to include CBD products, too.
No matter how long the FDA hurdles last for CBD edibles, we predict the category overall will still be on pace to reach the market estimate of $22 billion by 2022, considering the number of players eager to enter the game.
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