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What Does Scott Gottlieb’s Departure Mean for Cannabis Stocks?

FDA commissioner Scott Gottlieb announced yesterday that he would be retiring after nearly two years in the role. Seaport analyst Brett Hundley believes his departure adds another layer of uncertainty around the evolution of the US CBD market specifically, and the US medical and ingredient (M&I) cannabis market more broadly.

Just last week, in testimony presented before the House Appropriations Committee, Gottlieb revealed new details about plans to pursue alternative pathways for CBD regulation. Gottlieb said the FDA will hold a public meeting “sometime in April” to hear from stakeholders about how to best regulate CBD derived from hemp, which was legalized late last year as part of the 2018 Farm Bill. Gottlieb also said he would be forming a working group comprised of agency experts to inform him on regulatory options for CBD.

Read also: Wake Up Marijuana Investors! Aurora Stock Is Just as Good as Canopy — But Cheaper

Hundley commented, “Gottlieb’s departure is most relevant for the US CBD market, along with the development of cannabis as a therapeutic ingredient product […] We have been watching for developing guidelines on full CBD legalization in the US, based on two potential regulatory catalysts: (1) the ECDD/UN, or (2) the FDA.”

The analyst continued, “Now, with Gottlieb’s resignation, additional questions related to his successor’s views and the Senate confirmation process could cloud CBD/M&I market growth even further. We acknowledge that CBD has still found its way onto many store shelves across the US, but it is our view that approval by the FDA will unleash considerably more in the way of market growth, with new entrants in the form of CPG, pharma, and retail grocery adding a material amount of muscle to M&I market evolution. Until this happens, we see the US CBD market remaining relatively constrained. We view prior FDA Commissioner short-list candidates like O’Neil, Gulfo, and Srinivasan as favorable for de-regulation and thus CBD approval, but we also worry about the Senate confirmation process and what happens to an FDA (and its review of CBD) that goes on too long without a leader in place.”

Check out the articles in this category focused on cannabis stocks. By gaining a strong foundation in both the fundamentals and technical details usually involved in cannabis stocks, you’ll be able to invest with greater confidence.


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