CVS share price down 2% after announcing CBD sales
CVS stock is down after announcing upcoming sales of CBD products in hundreds of its stores.
CVS share price is down 2% after announcing that it will sell Curaleaf cannabidiol (CBD) products. The hemp-based products will be sold in eight US states in 800 stores.
Why is CVS selling CBD products?
CVS is selling CBD products because of the popularity of the product that is derived from the same plant as marijuana. Marijuana and CBD-based products from companies like Curaleaf and Aurora Cannabis are a multi-million dollar business. CVS Health spokesperson, Mike DeAngelis, noted that the chain will sell Curaleaf CBD because of customer demand. CVS will sell Curaleaf lotions, creams, and oils.
‘We are carrying hemp-derived CBD products in select states to help meet consumer demand for alternative care options,’ said DeAngelis.
Is it safe for CVS to sell CBD?
While CBD has been touted as a ‘alternative medicine’ treatment for anxiety and pain, little medical research has been conducted for it to be approved by the US Food and Drug Administration(FDA). CVS will not be selling CBD food products because they are not regulated in the United States.
Former FDA Commissioner, Scott Gottleib, said in December 2018 that CBD products was risky to sell in stores.
‘Selling unapproved products with unsubstantiated therapeutic claims is not only a violation of the law, but also can put patients at risk, as these products have not been proven to be safe or effective,’ said Gottleib.
CVS pledges to ensure that the Curaleaf products are safe for customers to use.
‘We are working only with CBD product manufacturers that are complying with applicable laws and that meet CVS’s high standards for quality. Only products passing these independent tests are offered for sale in our stores,’ said CVS in a statement.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
