Upcoming Issue Highlights

Industry Forecast … continued

Industry Forecast Industry Forecast

With sweeping changes in the U.S. political landscape ushered in by the 2016 elections, the natural products industry must navigate uncertain seas as it looks forward to 2017. Here is a continuation of NIE’s Industry Forecast article from the January 2017 magazine.


• Darrin Duber-Smith, Senior Lecturer, Department of Marketing, College of Business, Metropolitan State University of Denver, CO

• Jonathan Emord, Esq., President, Emord & Associates, Washington, DC

• Daniel Fabricant, PhD, Executive Director and CEO, Natural Products Association (NPA), Washington DC

• Michael McGuffin, President, American Herbal Products Association (AHPA), Silver Spring, MD

NIE: While hemp and recreational/medical marijuana are completely different things, what inroads is cannabis making in the natural industry now? Does the changing political climate and regulatory postures open any doors for hemp and its kissing cousins?

McGuffin: Hemp seed oil has been established in the market for decades and there appears to be no risk of it being removed. Congressional support for other hemp-derived products was clearly demonstrated in Section 7606 of The Farm Bill, which was signed into law in February 2014. That section authorized research on hemp to determine whether commercial production would benefit American farmers and businesses.

In addition, state acceptance of cannabis for medical purposes and adult use continues to expand. For the most part, the Obama administration did not intervene in state efforts to legalize cannabis. It remains to be seen how the incoming Trump administration will handle the growing number of states adopting laws that contradict federal drug policy for cannabis.

Duber-Smith: Cannabis is still illegal on the federal level, and I don’t expect that to change until a few more of the larger states exercise their right to make laws under federalism.

The status of the herb makes supply-chain issues very difficult, but this herb might eventually be seen as a nutritional supplement in the long run. This would suggest that most manufacturers should stay in the research and development stage of the new product development process for now. And even if marketers knew what product would sell in certain states, there is far too much risk marketing a Schedule 1 drug at present and distribution would be limited to dispensaries. Save your energy.

Hemp, on the other hand, is a whole different animal and perhaps a more common sense administration will look at this crop in a different light. It remains to be seen whether or not the incoming administration will apply this level of common sense, but I am actually quite hopeful. A wait-and-see approach is probably best.

Emord: It is one of the extreme ironies of federal law and policy that while a party selling an antioxidant vitamin for cancer risk reduction goes to jail, a person selling marijuana is left alone. Until the paradigm changes such that government refrains from taking enforcement action unless individuals are actually being harmed, political winds will determine who goes to jail and who remains free, inviting these inconsistencies precisely because application of the law depends on political factors (who you are and whether what you do is politically preferred) rather than what harm you cause.

Fabricant: Marijuana extracts, including CBD, just became a schedule 1 drug […] by DEA. I think the story on CBD just closed and the rhetoric that this is somehow still a gray area has now been clearly defined for the industry.

NIE: And speaking of herbs, what of kratom? It seems that industry organizations are not in agreement about how this herb and its constituents should be regulated. Wouldn’t reclassifying botanical constituents throw the baby out with the bathwater, as we did with ephedra? Or not?

Duber-Smith: Kratom is [likely] another highly publicized supplement that will generate lots of publicity and ultimately make a few bucks for a few companies while making the industry look more irresponsible. Memories of ma huang, kava kava, yohimbe, Cascara sagrada and maca are still too fresh in my mind to get excited about any one herb. And consumers are more interested in the product’s benefits than they are the product itself anyhow. But the confusion within the industry over how to regulate the herb and its constituents suggests that great pains should be taken to ensure that this substance is both safe and effective. Industry groups need to reach an agreement before the court of public opinion makes up its own mind.

McGuffin: AHPA has expressed concern about the DEA effectively banning a plant that is currently on the market by scheduling naturally occurring constituents of that plant under the Controlled Substances Act (CSA). AHPA also urged DEA to refrain from taking any action that would limit research in to the benefits and risks of a botanical. Restricting research is a disservice to consumers, especially those who may benefit from using the plant.

Fabricant: Kratom is the perfect example of why detractors of supplements condemn the industry. The responsible industry states that we are regulated, and it is. On the other hand, we have kratom companies making money from consumers by selling an ingredient that has never been through the new dietary ingredient notification process. These companies don’t spend a dime toward any evidence of safety and just proclaim it as a safe ingredient. There is a process, regulated by FDA, to follow in order for kratom to be lawfully marketed as a dietary supplement, a commodity of food in the U.S.

One thing is very important to remember with kratom, as a former Food and Drug Administration (FDA) official and regulators of the dietary supplement industry, I can tell you that finished kratom products and raw kratom botanical ingredients have not met the strict standards products and new ingredients must adhere to in order to be marketed to the public and deemed safe for regular use in either our food or our drug supply.

Addiction specialists are also cautioning against the use of kratom, claiming that many of their patients use the substance as a Band-Aid when they cannot find opioids or alcohol. I can’t think of an accepted food that has that effect on someone.

It has been banned in countries including Australia, Malaysia, Burma, Denmark, Poland, Lithuania, Sweden, Myanmar and Vietnam. Six U.S. states have also banned kratom, including Alabama, Arkansas, Indiana, Tennessee, Vermont and Wisconsin.

If proponents of kratom want to become legitimate, they should follow the rules at FDA and the Federal Trade Commission (FTC) regarding the marketing of a new dietary ingredient and the required evidentiary burden to substantiate claims. Firms must submit both safety and efficacy data and research they believe qualifies kratom as a bonafide, lawful ingredient sold in the U.S. marketplace.

Until the law is followed, however, NPA strongly urges DEA and FDA to take appropriate legal action to ensure that American consumers are protected from an unknown and unregulated botanical ingredient whose use could have widespread and unintended negative consequences for public health and safety.


Autism Hope AllianceNorth American Herb & Spice