Vol. 6, No. 51-- August 23, 2019 - Edited by Dr Lloyd Covens
CRYSTAL BALL GAZING BY VISIONARY CBD LEADERS-- The 6th CBOutLook hosted leading execs who offered their informed view of near-term CBD prospects. From left, Mile High Labs CEO Steve Mueller, Functional Remedies founder Tim Gordon, CV Sciences' hemp director Josh Hendrix (with mike) and Brett Goldman, GenCanna's v.p. for government affairs, joined 28 other national experts at the Aug. 14-15 gathering at the University of Denver. (Photo courtesy of Jarad Geldnar/ HIll&Knowlton)
Smokable Hemp Demand Draws Heated Debate at 6th CBOutLook
While farmers and processors wait cautiously for fall harvest results, the 2019 surprise demand sub-product has been sales of “smokable hemp,” giving farmers immediate revenue, not dependent on additional processing. Panelists at last week’s 6th CBOutLook clashed on whether the sub-CBD category was a life-saver for farmers—or conversely, a dangerous short-term gain which might work to undermine industry goals for good outcomes at the FDA.
“It is a high-margin product for growers which requires little processing or third party handling,” noted Ian Terry, CEO at Cannaissance Creative of Colorado. But GenCanna’s vice president for government affairs Brett Goldman countered that hemp-cigarette sales were sending a bad signal to Congress and regulators, arguing that the hemp industry was just separating itself from its’ marijuana cousin over the past six months. Smokable hemp products contain no THC(or are under the .03 level), and are often packaged like cigarettes, with some 20-count packs selling for $70 to $90 per box. Passage of the 2018 Farm Bill makes hemp—in all forms legal to possess and consume--however state lawmakers in Indiana, South and North Carolina are now pushing new measure to criminalize that hemp, in response to concerned local law enforcement. Other panel members at the West420 sponsored Aug. 14-15 event at the University of Denver, tackled the implications for upcoming federal hemp/CBD rules emanating from the FDA, the US Department of Agriculture, and state-submitted hemp growing policies. USDA economist Bill Richmond told CBOutLook’s audience that the complex issues for a national .03THC test was being debated at the “highest level” creating new rules for post-decarboxylation measurement of maximum-allowable THC which would have a widespread effect on every American hemp crop. Richmond’s agency also released a 2019 estimate of total planted U.S. acres surpassing 128,320—almost a four-fold increase from 2018’s acreage of 27,424 U.S. planted acres. Rules from USDA for 2018 Farm Bill implementation are expected by mid-October, followed by a 60-day comment period, Richmond said. All rules are expected to be ready for the Spring, 2020 planting season, including Native American compacts.
For 2020, executives with leading CBD companies (see photo above) were in agreement that increased government scrutiny and required testing (for safe sourcing, labeling and formulation) would effectively start to drive out more than 1000-plus (private-labled) brands and “fly-by-night” marketers selling into the CBD craze. “Education is key to long-term success” for responsible CBD makers, stated Dr. Marielle Weintraub, president of the U.S. Hemp Authority, now working on its second-generation of national certification standards.
In 2019 global sales, CV Sciences director of US Hemp Production Josh Hendrix predicted total sales topping $2Bil., while Mile High Labs president Steve Mueller confirmed his company would spend more than $60Mil on 2019 U.S. biomass purchases, followed by processing into finished goods at his Longmont (CO) facility --the massive factory formerly housing drug-maker Novartis. Functional Remedies founder Tim Gordon said even as consolidation and acquisition activity increases in the CBD sector, the companies “who continue to research and innovate will gain strong market share.” Delivery methods continue to increase, noted Bolivar Hemp CEO Larisa Bolivar who profiled the growth of vaping, sprays, lotions, pills and edibles all expanding the CBD segment, beyond the traditional oil/ tincture offerings. National expert veterinarian Dr. Rob Silver offered an in-depth analysis of studies on animal use of CBD, suggesting in general that THC may cause pet anxiety based on animal size and condition. Silver noted that studies have shown horses are particularly helped by CBD, but for all animals he suggests the use of broad spectrum formulations.
Mark Bolton, Senior Director for U.S. public policy and public affairs at GW Pharma (and subsidiary Greenwich BioSciences) said his firm is dedicated to working to build on its FDA-approved Epidiolex drug beyond its initial use for child-born intractable epilepsy. GW reported its’ second quarter revenues approaching $72Mil., up from just $3.3Mil from the year earlier quarter, and first half-yar sales of $102Mil. Epidiolex is now prescribed to 12,000 patients, and administered by more than 2500 doctors. Bolton agreed that a compatible "lane" for all FDA-controlled forms of CBD would benefit consumers, and noted new possible formulations for the marijuana-derived Epidiolex may include an emphasis on CBD-V, which is under clinical study at GW.
Returning to the hot-button debate over smokeable hemp, Terry asked why farmers should not be allowed to offer consumers a more healthy option for those wishing to quit tobacco smoking. Prices for high-CBD raw flower heading for pre-rolls have been quoted as garnering as much at $3000/pound, according to estimates from Keith Holocek, managing director of Hemp Benchmarks, another CBOutLook presenter.
Delegates were active in voting for Best CBD products in topicals, special formulations and pet CBD products. The winner for most votes was Florida's Green Roads for their "Terpene Juice" collection. Pet Releaf was voted Best Pet CBD, and Lord Jones was voted Best Topical. Next Week: See our link to the 24-file Data/Statz CBOutLook collection of much of the conference materials in next week’s West420 NewsWeekly.
Find the Expo East "HEMP & CBD SUMMIT" SEPT. 11, co-sponsored by Balanced Health Botanicals, Bluebird Botanicals, CV Sciences(PlusCBD), Charlotte's Web, Elixinol, EvoHemp, Functional Remedies, GenCanna, Green Roads and Shikai in Baltimore.
A long-awaited green light from the National Credit Union Administration will open the door for additional banking services for hemp growers and retailers. NCUA says its' policy will be revised and updated once the U.S. Department of Agriculture finalizes forthcoming hemp regulations and guidelines. Credit unions will be able to provide the customary range of financial services for business accounts, including loans, to hemp businesses within their fields of membership. “Lawful hemp businesses provide exciting new opportunities for rural communities,” NCUA Chairman Rodney Hood said. “I believe today’s interim guidance keeps with the mission of the nation’s cooperative credit system to serve people who have been overlooked and under-served. Many credit unions have a long and successful history of providing services to the agriculture sector. My expectation is that credit unions will thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership.”
Two middle-sized--but highly respected-- CBD makers are merging. South Carolina's Palmetto Harmony will join forces with R.E. Botanicals, of Boulder. R.E. was founded by John Roulac, who previously founded the major California-based hemp products company, NUTIVA. Palmetto CEO Janel Ralph said "John's kind of a legend in the hemp space," noting the two met a "Victory for Hemp" party to celebrate passage of the 2018 Farm Bill. The new company will retain the "Palmetto Synergistic" ownership structure, and will market products under the RE Botanicals brand. “This will give us the ability to get products onto more retail shelves, which is why we chose to partner with them,” said Ralph, who will manage hemp growing from South Carolina.
Sales taxes for legal California cannabis sales continued to show slow takeup rates, with the latest quarter (ending July 31) showing cannabis excise tax generating $74.2 million in revenue reported, with the cultivation tax generated $22.6 million. Sales tax from cannabis businesses totaled $47.4 million in reported revenue for the same period. The new sales taxes continue to hint at a cannabis industry which is more than 70 percent gray or black market in the state. -- Elsewhere is California, AB-266, to allow the legal sales of CBD in food, drinks and cosmetics, is expected to be heard in a State Senate committee August 30. Other pending states with a similar provision allowing the legal combination of CBD into food and drinks are Nevada, Pennsylvania and Connecticut.
Link-of-The-Week: A new study highlights to problem of federal MJ illegality actually contributing to consumer health risks-- not from the use of cannabis, but from the inability for federal agencies to set safety rules. The study states “States have had to determine on their own how to protect millions of cannabis users, and they have come up with widely varying responses,” often resulting in "an uncertain and occasionally incoherent regulatory landscape.” Read "Cannabis Contaminants: Regulating Solvents, Microbes, and Metals in Legal Weed" at the Environmental Health Perspectives' link
The state of Utah began their medical MJ program last year with plans to only allow cannabis from state-run dispensaries, and 8 licensed growers. Now, with concerns about state liability and the federal government, the state legislature has introduced a bill to allow private sector licensing of MMJ stores. Additionally, Utah Gov. Gary Herbert is calling a special session to deal with cannabis issues. Herbert previously called upon the federal government to take marijuana off the CSA's most restrictive schedule one designation.
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