"We remain concerned that some people wrongly think that the myriad of CBD products on the market, many of which are illegal, have been evaluated by the FDA and determined to be safe, or that trying CBD 'can't hurt’," FDA principal deputy commissioner Amy Abernethy said in a statement.

"Aside from one prescription drug approved to treat two paediatric epilepsy disorders, these products have not been approved by the FDA and we want to be clear that a number of questions remain regarding CBD's safety, including reports of products containing contaminants, such as pesticides and heavy metals. There are real risks that need to be considered.

"We recognise the significant public interest in CBD, and we must work together with stakeholders and industry to fill in the knowledge gaps about the science, safety and quality of many of these products."

The FDA update and warning applies to all forms of consumable and topical CBD products.

Also in November, the FDA issued warning letters to 15 companies for illegally selling products containing CBD in ways it says violate the Federal Food, Drug and Cosmetic (FD&C) Act. The agency was particularly stern in its language in the warning letters and its statement announcing the unexpected crackdown.

"CBD is marketed in a variety of product types, such as oil drops, capsules, syrups, food products such as chocolate bars and teas, and topical lotions and creams," the FDA stated. "As outlined in the warning letters issued today, these particular companies are using product web pages, online stores and social media to market CBD products in interstate commerce in ways that violate the FD&C Act, including marketing CBD products to treat diseases or for other therapeutic uses for humans and/or animals. Other violations include marketing CBD products as dietary supplements and adding CBD to human and animal foods."

What is clear, and the FDA reiterated it in its update, is that CBD can't be added to a food or marketed as a dietary supplement under current federal law. Additionally, the FDA maintains regulatory oversight of food, cosmetics, drugs and other products within its jurisdiction that have CBD as an additive.

The consumer update and issuance of warning letters to the 15 companies for illegally selling products containing CBD has injected added uncertainty into what is already a business operating under too much uncertainty.

Basically, although the sale of hemp-derived food, drink and cosmetic products are legal under the 2018 Farm Bill, their sale is unregulated at present by the FDA. The FDA is still figuring out how CBD should be regulated, but with the November consumer update and action against the 15 companies it is emphasising that adding it to a product meant for consumption is still illegal. The fine line the agency seems to be walking in its enforcement is that companies can sell CBD consumables but they can't make health-related claims deemed too bold by the department. 

It's too soon to know if this latest consumer update and crackdown will have a chilling effect on the booming CBD products' industry but the move by the FDA has sent shockwaves through the industry.

Whole Foods Market, which along with food and drug chains Kroger, Walgreens, CVS, Albertsons COS, Lucky's Markets, Earth Fare, Fresh Thyme Farmers Markets and some others, has been selling CBD products, mostly topicals, in its stores, said it was putting a hold on further expansion of CBD products pending further clarification from the FDA. 

The major projected growth of CBD products is predicated on their being on the shelves of big retail chains. Big retail chains dislike uncertainty and are very cautious when it comes to regulatory agencies like the FDA. As such, the recent action will likely slow big retail's adoption of CBD as a mainline category, in my analysis.

The Food Marketing Institute (FMI), the trade association for America's big food and drug retail chains, has submitted a comment to the FDA on the commercialisation of food, beverage and other products containing cannabis or cannabis-derived compounds, including CBD. It said food retailers need a "clear and comprehensive" regulatory framework for the marketing and sale of these products. In other words, more certainty is needed for both retailers and packaged goods companies in the CBD space to grow the category.

The projected market sales growth for CBD is massive - and ubiquitous - according to a host of packaged goods industry research firms.

For example, Nielsen forecasts that by 2020, sales of hemp-derived CBD products will reach at least $6bn. Chicago-based Brightfield Group, a market research firm that focuses on the CBD and cannabis industries, estimates current CBD product sales at $6bn annually, and projects hemp-derived CBD product sales to reach $23.7bn in 2023, a 47% compound annual growth rate.

However, other market research and financial firms say the actual number is much lower. For example, financial services firm Jeffries offers a more conservative estimate of CBD product sales of $3.5bn by 2022.

Like the CBD products themselves, the sales forecasts too are operating in a wild west manner - nobody really knows where the category is going because there are no rules, but all seem to agree that it's going to be big.

My analysis is that the outlook for the CBD products' business in the US is a very bright one, although I do believe there's a bit too much hype in terms of how big it will get and how fast it will get there. Perhaps November's shot across the CBD bows from the FDA will serve as a calming agent for what has become a category that's been running at too high an octane level in terms of promise vs. reality.

But in order for CBD to reach its promise, which is significant regardless of which of the sales growth projections is correct, the uncertainty for packaged goods companies and retailers must be reduced, as the FMI stated in its comment to the agency. The only way for this to happen is for the FDA to jump in and start regulating CBD. The agency says it hasn't had the chance to do adequate research to date but that's making the perfect the enemy of the good. More certainty is needed and the FDA is the only one that can provide it.

There's also much consumer confusion when it comes to CBD. For example, an October survey of 2,056 Americans by the Grocery Manufacturers Association (GMA) found that more than 75% of consumers assume CBD products are currently regulated by the FDA, although they aren’t.

"Today's multi-billion-dollar CBD industry operates within a disjointed, patchwork system of state regulations. Upon learning no federal agency oversees CBD products, 82% of Americans expressed alarm, 67% of whom say they are 'extremely' or 'very' concerned. Another 84% are worried about the varying regulations that could result from the current state-by-state patchwork system," GMA president and CEO Geoff Freeman said about the results of the survey.

"It is the role of federal agencies to ensure a safe and transparent consumer marketplace - but the CBD market is currently the wild west. Without a uniform federal regulatory framework in place, consumers lack the basic information they need to make informed decisions about CBD."

Freeman says the GMA is taking action to get the FDA to advance regulatory clarity on CBD and that it plans to build a broad-based coalition and lead an aggressive campaign to achieve it.

This consumer confusion and uncertainty must also be eliminated if CBD is going to become a mainstream category. Again, the FDA is the only one that can serve as the catalyst to make that happen. The CBD products business needs a sheriff, and the FDA is the one wearing the badge.