Troy Trygstad, PharmD, PhD, MBA, gives CBD facts and fiction.
Cannabidiol (cbd) is a non-psychotropic extract found in cannabis plants. One of over 100 cannabinoids found in cannabis plants, it has burst onto the US market in recent years. Cannabinoids are active with cannabinoid receptors in the brain. For decades, understanding of cannabinoids has been somewhat limited in mainstream medical and pharmaceutical research and practice circles due to the presence of tetrahydrocannabinol (THC), the psychoactive chemical that has played an outsized role in the war against Drugs. Because cannabis remains a Schedule I substance at the federal level, CBD has found itself in a complicated and protracted public educational and regulatory quagmire.
What it is not
Based on all available evidence, CBD cannot get people high and it is produced legally in a number of countries. Still, it’s not entirely legal in most countries. Interestingly, some countries, such as China, are beginning to profit from the production of the extracts, but maintain some of the strictest laws against the use of the product(s) extracted from growing cannabis or hemp plants. Canada, European countries and other industrialized countries all have ambiguous, contradictory and confusing positions on CBD and sometimes THC.
Above all, although we are finally beginning to apply credible and more conventional scientific research to cannabinoids, we can still only guess at the mechanism of action of CBD.1 The World Health Organization has published a great resource on what CBD is and isn’t and where the world is heading with it.2
A rapidly emerging market
Forbes reported this year that by 2024, CBD is expected to be a $20 billion industry in the United States alone, while its wide array of delivery systems, such as cream, gummies and oil , is starting to hit retail store shelves.3 Expect the local grocer to get involved due to CBD’s deep margins and continued growth in social acceptance. Ironically, CBD can be found in any store but not necessarily in pharmacies. According to the same report, THC products are expected to add $25 billion to the cannabinoid market in states where they are legal but still federally illegal.3
These sell-offs will likely continue in the dispensaries, as traditional investors don’t want to look over their shoulders at the Drug Enforcement Administration during quarterly earnings calls.
Traditional medicine vs alternative medicine
While the arc of CBD products has been interesting to follow, the most significant trend may be the growing acceptance of alternative types, outlets, and sources of alternative medicine, both pharmaceutical and otherwise. It seems that traditional Western medical models are increasingly opening up to Eastern models of health care delivery, just as fusion themes are popular in restaurants, with East and West often coming together. Significantly, the rise of CBD, along with THC, began with patients with hard-to-treat epilepsy and children with special needs. When traditional medical solutions did not work, these patients and their parents turned to alternatives. The children finding relief was apparently too much for regulators to hold the line.
CBD is not alone
About 1 in 4 adults received massage therapy last year, and this industry has more than doubled in a decade to $18 billion.4 In the world of prep pharmacy, hormone therapies for perimenopausal and postmenopausal women are popular with those who have access to a prep pharmacy and good women’s health resources. Physiotherapy has also grown significantly over the past decade in its number of disease approaches and procedures and is now a $34.5 billion industry, expected to grow more than 6% annually, faster than the expected growth rate for hospitalizations, drugs and physician services.5 Dry needling, myofascial cupping, and Rolfing, among other techniques, have only become mainstream now, even though they have been around for decades, if not centuries, in one form or another. As with the craft beer industry, which had existed for many decades before the recent market explosion, it took a shift in consumer access and expectations to reach an inflection point.
Physicians write hundreds of thousands, if not millions, of prescriptions each year so that patients can get their over-the-counter medications using their Health Savings Accounts or equivalent tax-protected accounts. It also includes all those “alternatives” to what we consider to be traditional western medicine. These ‘prescriptions’, written to appease the Internal Revenue Service, also contribute to the integration of previously ‘alternative’ medicines and procedures. As more and more Americans are offered expensive drugs and procedures, expect them to seek out alternatives.
Stuck between thin margins and the regulatory safe harbor
Perhaps the most significant legislation affecting CBD, and potentially the housing and household goods market, is the Farm Bill of 2018. Yes, you read that right. This federal bill restores the legality of growing hemp, which contains little (>0.3%) THC. Expect millions of acres of hemp production over the next decade, as CBD only accounts for 23% of the hemp market.6
Everyone seems to be relieved of the regulatory control of alternative therapies, with the exception of pharmacies. Profit margins on physiotherapy are 14.5% and can reach 60.0% or more on CBD. Farmers trying to ride out soybean tariffs and happy to earn $30-40 per acre can switch to hemp production and expect $300-350 per acre.7
Yet pharmacies are generally blocked by FDA-approved means of market entry. Although many pharmacies sell CBD products, most pharmacy boards are still reluctant to endorse them. In 2018, the FDA approved Epidiolex, a pure form of CBD that costs tens of thousands of dollars per year. This makes it inaccessible without insurance coverage, leading to discount games and thus subjecting pharmacies to low, zero or negative markups – if pharmacies have access to it, as it will likely remain a specialty product.
Pharmacies would do well to take a close look at the emerging alternative medicine market, including services rather than just products. Examples of pharmacies suitable for complementary and alternative medicine are now present in every state, and they can be part of the solution to sustainability in an increasingly difficult third-party payment environment.
Troy Trygstad, PharmD, PhD, MBA, is vice president of Pharmacy Programs for Community Care of North Carolina, which works with more than 1,800 medical practices to serve more than 1.6 million Medicaid, Medicare, commercially insured and uninsured patients. He earned his PharmD and MBA degrees from Drake University and a Ph.D. in Pharmaceutical Outcomes and Policy from the University of North Carolina. He also serves on the board of the American Pharmacists Association Foundation and the Pharmacy Quality Alliance.
- Campos AC, Moreira FA, Gomes FV, Del Bel EA, Guimarães FS (December 2012). “Multiple mechanisms involved in the broad-spectrum therapeutic potential of cannabidiol in psychiatric disorders”. Philosophical Transactions of the Royal Society of London. Series B, Biological Sciences (revision). 367 (1607): 3364—78.