Santa Cruz County, Calif., Officials Prepare to Crack Down on Illegal Marijuana Delivery Services

As more states legalize adult-use and medical cannabis, another trend has been emerging across the U.S.: state industrial hemp statues, which allow licensed farmers to grow hemp that can be used in CBD product manufacturing. A corresponding explosion in that market segment has accompanied the growth, at large, across the cannabis industry.

Retailers must be on alert, as hemp-derived CBD products come with their own set of rules and their own industry mythos.

Maruchy Lachance, COO of Boulder Botanical & Bioscience Laboratory in Colorado, discusses the current trends in the hemp-derived CBD market and the regulatory context that you must bear in mind as you get into these products.

1. Know Your Source

The 2014 Farm Bill opened the door to hemp-derived CBD product manufacturing, but it’s an extremely circumscribed process as a matter of law. States may develop their own hemp agricultural programs, and, within the confines of those programs, licensed farmers may grow hemp for research purposes or for CBD production.

“To make it as simple as possible,” Lachance says, “I can tell you that, due to the Farm Act, … we can provide CBD in all 50 states as long as it is a finished product. What that means is that in a lot of states – like, for instance, Florida – the only way that they accept hemp is if it’s a finished product. If we walk in there with a seed or a plant, it becomes an issue.” (In certain states, like Ohio, state regulators have stepped in to place local law enforcement pressure on the sale of CBD products. The Drug Enforcement Administration (DEA) has insisted that CBD remains an illegal, Schedule-I substance, but has also stated publicly that it is not a prosecution priority at all.)

BBB produces capsules, tinctures, gummies – a wide variety of products that contain hemp-derived CBD. Florida is working toward developing a hemp agricultural program. As of August 2018, 40 states have implemented those types of programs.

“It does not impact anyone who is purchasing, as long as it is hemp-derived CBD,” she says. “There needs to be no THC in the product.” The current DEA limit is 0.3-percent THC content in hemp plants and hemp-derived products.

Retailers would do well to vet their vendors properly. In order to guarantee consistent quality from their sellers – and to communicate legitimate product information to consumers – dispensary buyers must be on guard in the marketplace.

“A lot of the time, asking questions is not really going to get the consumer the true answer that they want,” she says. “Everyone is trained to say the right thing. What I look for are the red flags. Some of the red flags are, for instance, you cannot make claims on your marketing or your bottling or packaging.”

2. Keep Your Eye on Trends

BBB has been researching CBD product manufacturing since 2013, and the company arrived in Colorado in 2015.

“We come from the nutra side; we were making dietary supplements,” she says. “So, when we saw this exciting ingredient coming up, we thought, ‘We need to get into this.’ We understood that it really helps people.”

Immediately, Lachance and her team began picking up on consumer trends in Colorado. Already on the vanguard of cannabis reform in the U.S., Colorado residents were also shaping the way that the rest of the country would go on to use CBD products.

“One of the ways that people were using it – it was the most popular method – was just taking the crude oil, putting it in a syringe and administering it under your tongue,” Lachance says. “That was back in 2015, which was just a few years ago – but in the CBD space, that may as well have been 20 years ago.”

With BBB’s nutra background, Lachance and her team knew there had to be a better way to deliver the power of CBD in a more palatable format.

“What we know for a fact is a lot of the pain management companies use capsules, tablets,” she says. “We thought, ‘Why are we trying to reinvent the wheel?’ Those people have all the money, they’ve done all the studies. Clearly, everyone is still using these after 50 years; we’re just going to … go ahead and make our CBD products and we’re going to put it in a capsule.”

The company did just that, and now BBB sells a spectrum of products, including capsules and tinctures. “We are now seeing it ingested in a variety of ways,” Lachance says.

BBB is developing a CBD gum, in fact.

Meanwhile, in Florida, Lachance says she was surprised to find that consumers there were using CBD oil syringes en masse. “It’s almost like the East Coast has not caught up with all of the improvements and advancements that we have seen here in Colorado,” she says.

3. Enter Epidiolex

It’s impossible to talk about the exploding CBD marketplace without a nod toward the recent FDA approval of Epidiolex, a CBD-based drug used to treat seizures. Manufactured by GW Pharma, Epidiolex is expected to cost $32,500 per year.

“To us personally,” Lachance says, “we are going to embrace any kind of regulating and … allow this product to get the attention that it needs and deserves. So, for us, it’s going to level off the playing field. This means that we now have a competitor in the market, and now we get to compare apples to apples.”

Too often, Lachance says, companies on the fringes of the CBD marketplace are able to drive prices down and skirt what little regulation exists in the industry. Companies like Boulder Botanical & Bioscience then lose out on the customers that prefer, say, lower price points to quality compliance.

“When we get all of these companies coming onboard, and the government is now starting to regulate it and get behind them, what it does for us is we’re finally in a place where people can compare us and see that we are in fact doing essentially what all of these companies that are coming up are doing – and maybe better,” she says.

GW Pharma and Epidiolex (along with the company’s plans for additional FDA-approved drugs) may signify a new era in CBD regulation in the U.S. How that develops is a narrative worth watching. any retail owner or vendor; in the meantime, the marketplace will take care of consumer demand and supply.

Top photo courtesy of Adobe Stock