Americans have turned to melatonin to soothe pandemic-induced stress. Experts worry high demand, little federal oversight, and insufficient data leave the industry ripe for scams.

• American consumers spent $825,559,397 on melatonin supplements in 2020, representing a 42.6% year-over-year increase, according to Nielsen.
• Industry analysts expect the melatonin market to continue to grow, but a lack of federal oversight of supplements and sparse research into melatonin's long-term effects may harm consumers.
• As more sellers look to cash in on the melatonin hype, doctors ask Americans to use caution when shopping.
• Visit Business Insider's homepage for more stories.

Alex Goris has been taking melatonin every night for the last six months.

Goris, a 22-year-old lab technician in Salt Lake City, said his stress over getting exposed to coronavirus at work was keeping him from getting enough sleep before his 4:30 a.m. shifts. Melatonin has helped ease his late-night anxiety.

"I have a friend who who said: It's a lot easier to sleep through it than to live through it right now," Goris said.

The COVID-19 pandemic worsened the mental health in millions of Americans like Goris. Gallup found emotional wellbeing sunk to an all-time low in 2020, and psychiatrists said trauma from job loss, losing loved ones, and isolation has led to rises in anxiety and depression.

For relief, many Americans have turned to melatonin, a hormone supplement.

American consumers spent $825,559,397 on melatonin supplements in 2020, representing a 42.6% year-over-year increase, according to Nielsen. Melatonin serves as a cheap, easy solution to fixing declining sleep habits: The supplement costs as little as $5 a bottle in some cases. 

"When you go to bed, your whole day replays in your mind," said Asim Shah, professor and executive vice chair at the Baylor College of Medicine. "If you worry throughout the day whether you are going to catch the disease or your loved ones are going to catch the disease, of course it is difficult to sleep."

But last year's surge in melatonin sales could have long-term consequences, experts warn.

The Food and Drug Administration regulates dietary supplements less strictly than over the counter or prescription drugs, meaning companies could falsely advertise the amount of melatonin within their product, according to Jennifer Martin, a member of the American Academy of Sleep Medicine Board of Directors.

Read more: American's mental health and sleep is deteriorating, but these brands are cashing in on the combined $86 billion mood-boosting supplement and sleep aid market

One major concern with the rising melatonin demand is the relative lack of Food and Drug Administration oversight into the dietary supplement industry compared to medications.

A 2017 study in the Journal of Clinical Sleep Medicine found the amount of actual melatonin in 71% of supplements is off by a 10-percent margin, meaning the majority of sellers mislabel how much of the hormone is in the pill. The study also found the amount of melatonin within pills in a single jar can vary by a whopping 465%.

"Because melatonin is not [as] regulated, there's no guarantee about the purity of what you're buying," Martin said. "There's no guarantee that each pill in a bottle has the same amount of melatonin in it."

As the industry explodes, analysts predict melatonin lattes and kid gummies are on the horizon.

Demand for melatonin shows no signs of slowing.

Andrew Houlberg, president and CEO of Natrol, a 41-year-old supplement company, said the firm's sales doubled over the last three years. 

Now, a cottage industry of melatonin startups has already formed, hoping to cash in on the high demand, Insider's Bethany Biron reported. Without increased research and oversight into the growing industry, consumers risk losing their money - or worsening their health - with faulty products.

"I think from an supplement industry perspective, the concern with anything that's rapidly growing is people wanting to take advantage of that," said Claire Morton Reynolds, a senior industry analyst at Nutrition Business Journal.

As demand for melatonin will likely stay high, Reynolds expects companies to experiment with new ways to sell the product. 

Melatonin's rise could be likened to CBD, a part of the cannabis plant, Reynolds said. Analysts predict the CBD market could grow to $5.3 billion by 2025 as the industry swells with startups selling infused coffees, oils, makeup, and hand sanitizer.

Melatonin could expand into food and beverage. Reynolds has seen an increase in kid-specific sleeping aids and gummies marketed toward children. Irene Chang, a research analyst at Euromonitor International, saw spikes in younger consumers purchasing melatonin-based sleeping aids through advertising on social media sites. 

Over-the-counter sleeping medication companies might even rebrand to cash in on the melatonin hype, Chang added. 

Biotech upstart Inhale Health has already devised a new way to sell melatonin: inhalation pens.

In 2017, Inhale Health began selling melatonin pens that resemble vapes or e-cigarettes, but contain no nicotine or tobacco.

The firm uses a direct-to-consumer model that benefited from the e-commerce boom last year. Inhale Health CEO Daniel Shapiro told Business Insider the firm saw "fantastic viral effects'' on social media as TikToks of young people using the product garnered hundreds of thousands of views.

Goris, who came across an ad for Inhale melatonin "vapes" as he was scrolling through Instagram, bought three melatonin pens for himself and a friend - he said he doesn't think they worked.

Houlberg said Natrol plans to stick to more traditional melatonin products like gummies and pills, but said his firm stands out as the only company with quality certifications from NSF International and United States Pharmacopoeia. Shapiro said Inhale Health uses USP-grade melatonin, but regulators are still "catching up" to the new product.

Consumer Reports suggests buying products verified by supplement watchdog organizations to ensure the product contains safe dosages and no potentially dangerous ingredients. 

Shah recommends buying from a "reputable brand," sticking to three- to six-milligram doses, and talking to your doctor when taking the product. 

With more research and oversight, good-quality melatonin supplements can benefit health.

The American Academy of Sleep Medicine does not recommend the hormone supplement for insomnia, but rather to change the timing of your sleep cycle. 

Growth in melatonin demand should prompt more government-sponsored research to study the hormone, Shah said. The psychiatrist said no long-term study on the effects of melatonin exists right now, partly due to the lack of financial incentives private firms have in funding research. 

"When a drug is not regulated, it can be manufactured in a room," Shah added, "it can be manufactured by a big company, by a small company, with the least number of regulations and quality and standards."

But with more research and oversight, good-quality melatonin supplements can benefit health.

Russel Reiter, a professor of cell systems and anatomy at the University of Texas at San Antonio, has studied the impacts of melatonin for decades. Aside from promoting sleep, melatonin works as an antioxidant and can reduce inflammation in COVID-19 patients. He said some research has indicated melatonin reduces the severity of other viruses, like influenza.

Melatonin even has higher safe dosage than aspirin and ibuprofen, Reiter said. Researchers studying melatonin in animals haven't found the maximum amount of material needed to establish overdose, or cause death in 50% of subjects when consumed at once.

The Poison Control Center in Washington, DC, states toxicity from melatonin appears "mild." 

"Considering the cost-benefit ratio, melatonin is certainly a good bit for general use," Reiter said. "The FDA has not disapproved or approved melatonin in any regard, but I think they should seriously consider it in a positive light."