Now That Hemp’s Legal, All Roads Lead to Mass-Market Retail
On December 20, President Trump signed the 2018 Farm Bill, making it a historic day for hemp in the United States. After more than 80 years of prohibition, U.S. farmers are finally allowed to grow hemp legally. Section 10113 of the bill removes hemp from the Controlled Substances Act, extracting it from Schedule I status alongside its intoxicating cousin marijuana.
In a victory for farmers, the bill removes banking, water and other regulatory roadblocks from hemp farming, plus authorizes crop insurance. It also allows hemp farming in communities left out of the 2014 Farm Bill, including U.S. territories, tribal lands and reservations. Now, hemp is clearly defined as “whole plant,” including extracts, and as cannabis containing less than 0.3 percent THC.
Despite hemp’s previous illegality, the U.S. industry is booming. The Hemp Business Journal estimates that in 2018, the total retail value of hemp food, supplements and body care products in the U.S. reached $553 million.
Eric Steenstra, president of Vote Hemp, a national advocacy organization dedicated to a free market for industrial hemp, thinks hemp farming will be only one trending item in 2019. Even without the protections of the 2018 Farm Bill, the acreage of hemp grown in the U.S. more than tripled from 2017 to 2018.
With new protections, traditional farmers will feel more comfortable entering the industry. “A number of new states will allow hemp production, including Arizona, California, and New Mexico,” Steenstra tells Freedom Leaf. “It will definitely be changing.”
Now, hemp is clearly defined as «whole plant,» including extracts, and as cannabis containing less than 0.3 percent THC.
Running alongside an influx of new farmers will be an uptick in major manufacturers of farm and infrastructure equipment venturing into hemp agriculture. “Companies will rise to meet the market,” he adds. “That’s a huge piece needed for the industry to be successful and grow, and I think we’ll see bigger companies like John Deere get involved.” He also predicts large food manufacturers like Kellogg’s and Nabisco and major cosmetic companies will start adding hemp to their products.
Colleen Keahey Lanier, executive director of the Hemp Industries Association—a nonprofit working to advance the hemp economy—believes that hemp genomics and research on CBD will begin in earnest. With the Farm Bill passage, researchers will be able to investigate hemp varieties and applications, from industrial uses, like fiber, to CBD. “New genetics will be advancing in the hemp industry,” she explains. “It’s an exciting time for researchers.”
Lanier expects CBD to continue to be an ongoing wellness trend as existing CBD businesses begin to diversify toward becoming full-spectrum cannabinoid companies. CBD has seen astronomical growth and shows no signs of abating. Typically derived from the hemp plant, it’s non-intoxicating and reportedly helps all kinds of medical conditions, from epilepsy to rosacea. Cannabis market research firm The Brightfield Group reported that CBD sales garnered $591 million in 2018 and could reach a whopping $22 billion by 2022.
But one thing the Farm Bill did not do is legalize CBD. FDA Commissioner Dr. Scott Gottlieb, on the day it was signed in December, issued a statement reasserting the agency’s power to regulate cannabis products, specifically CBD. Citing concerns about CBD sellers touting the compound’s ability to cure, treat or prevent diseases, he said CBD products “must go through the FDA drug approval process for human or animal use before they are marketed in the U.S.” Only one cannabis medicine, the high-CBD Epidiolex, has received FDA approval.
But one thing the Farm Bill did not do is legalize CBD.
Lanier acknowledges the confusion around the legality of CBD. Even in marijuana-friendly—and legal—California, officials have said CBD products are off-limits in food and supplements. In South Dakota, legislators are considering a bill to criminalize CBD oil.
But she believes the confusion is simple to demystify, despite the FDA’s efforts to muddy the waters by referring to CBD generally as cannabis-derived and not demarcating the difference between marijuana and hemp. “When we’re talking about CBD, we specify the source,” she notes. “Is it a marijuana source or a hemp source? If it’s a hemp-sourced CBD product or ingredient, it has all the benefits of being considered a commodity under the 2018 Farm Bill.”
Even though the FDA has positioned itself strongly against CBD sales, Sean Murphy, founder of the Hemp Business Journal and director of hemp analytics at New Frontier Data—a cannabis industry data firm providing vetted information to industry stakeholders—does not see the letter from the FDA as a CBD smack down.
“Our analysis is in the next six months we’ll see [hemp] trade industries and the AHPA (American Herbal Products Association) work with the FDA to come up with a regulatory framework,” Murphy explains.
Whole Foods Market recently chose hemp as one of the top 10 food trends for 2019.
He believes that sound framework will set off a domino effect in the rest of the industry. As the dust settles around CBD and FDA regulations, banks and credit card companies will feel comfortable working with the industry. Then mass market retailers, like Walmart and Target, will begin stocking CBD and other hemp-based products. “The FDA has to work through the science and the regulation, but all roads are leading to mass-market retail,” he predicts.
Another trending item on the CBD front is it being added to more skincare and beauty products. Whole Foods Market recently chose hemp as one of the top 10 food trends for 2019. And professional chefs are already on board: In a survey conducted by the National Restaurant Association, 77% of respondents believe CBD drinks will be the number one trend, followed by CBD food.
Not since the Marihuana Tax Act of 1937, when hemp became de facto illegal, has the road been so open and free of obstacles for farmers, researchers, Big Agriculture and consumers to take full advantage of hemp’s myriad benefits, from industrial applications like construction materials to textiles, medicine, food and clothing. It’s about time.
Hemp to the Future: U.S and Canada Industrial Crops on the Rise
Freedom Leaf Dives into the Hemp/CBD Market
Joy Beckerman: Hemp Industries Association Evangelist
Freedom Leaf FAQ: 16 Questions CBD and Hemp
Roger Adams: The Man Who Discovered CBD 75 Years Ago!
This article appears in Issue 35. Subscribe to the magazine here.