Cannabis stocks fell Friday, weighed down by the selloff in the broader market after President Donald Trump opened a new front in his trade war, this time with Mexico, and as a key hearing aimed at creating a regulatory framework for CBD kicked off.
The Dow Jones Industrial Average DJIA, -1.06% tumbled 321 points in early trade, while the S&P 500 SPX, -1.00% was down 37 points, after Trump said he would impose tariffs on imports from Mexico until that country takes measures to stem the flow of immigrants into the U.S. from bordering countries. The news came amid reports that China is planning fresh retaliatory moves against the U.S.
Against that backdrop, the first speakers were addressing an FDA hearing seeking information and data on cannabis and its ingredients that will last until 6 p.m.
The FDA will hear from all of the parties looking for clarity on the rules for CBD, which is widely believed to have wellness benefits, especially in dealing with inflammation, pain and anxiety. But the substance hasn’t been deeply researched and is viewed by the FDA as a drug, because it is the key ingredient in the only cannabis-based drug to receive FDA approval, GW Pharmaceuticals GWPH, -1.03% pidiolex, a treatment for severe forms of childhood epilepsy.
Adding to the complication, CBD, which can be derived from the cannabis plant or from hemp, was expected to be legalized along with hemp in last year’s Farm bill. But instead, regulation of CBD was moved over to the FDA, which immediately told companies it cannot be added to food nor drink.