CBD is the next GOLD RUSH. So, get out your formulas. Perfect your brands. Position yourself for what is and what’s next.
Legalization has solidified that products containing cannabidiol (CBD) aren’t going away. Last February, Stephen Hahn, Commissioner of the Food and Drug Administration (FDA), acknowledged that it was “a fool's game” to attempt to pull hemp-derived CBD products off the market in the US. In Canada, the inventory is packed high so retailers can watch it fly.
One can only make the case for an FDA-approved pathway — essential to prevent the bank accounts of lawfully-operating US businesses from being closed. Not to mention retailers' refusal to stock CBD products and investors with deep pockets awaiting rules and regulations. Thus far, the FDA has been slow to act. While North of the border Canada is like CBD big brother in the sense that the US can look up to him and learn (from their mistakes).
The one mistake we have seen our friends to the North makes is poor branding or not at all. The second wave of cannabis success is not growing commodity flower but adding value through CBD innovation and stealthy branding.
It's important to examine the evolution of the CBD industry over the past several decades. In the 1980s, a number of West Coast folks saw CBD’s potential immediately after it had been isolated and reported by Dr. Rafael Mechoulam. Yet not until around 2008-2009 was the compound commercialized by the first CBD companies.
This was pre-2014 Farm Bill and lawful industrial hemp hadn’t yet been defined separately from illegal marijuana. The 2014 bill only legalized industrial hemp for research and development purposes, but the 2018 Farm Bill removed the R&D caveat.
CBD’s first movers were operating without federally-lawful domestic cultivation. Instead, these products were grown, harvested, and derived internationally, making the legal and regulatory strategy a great deal more intricate.
At the beginning, CBD oil was being imported into the US from China, but these products were quickly rendered unsuitable for distribution because of the presence of heavy metals and pesticides. Then oils were imported from a variety of European locations. This involved international trade, customs, uniform health and safety standards, fundamental legality questions, and dedicated legal positioning for widespread distribution.
Today, these pioneering companies are global leaders. Flash forward to the present when there are thousands of operators, thousands of brands, and countless international components — all more robust than ever. The U.S. and its regulatory agencies have never tried to shut the industry down, but the FDA recently sent out a number of warning letters to manufacturers. The message could not be clearer: do not make claims and make products that are safe.
This is where the opportunity lies. Backing up claims by doing the research. Claims can happen. They exist in the natural health and wellness industry and in the pharmaceutical industry. CBD has attracted the attention of both. There is much to explore. The specifics are yet to be determined. Unique CBD formulas successfully interfacing with a myriad of indicated pathologies provides a win-win. One for the economy and one for public health.
Most CBD products are regulated at the state level in the US and federally in Canada. In Colorado, the Hemp Foods Policy/Bill is the model for the FDA. When the DEA attempted to classify CBD as a Schedule I substance through its Drug code rule, it failed. A prolific group of lawyers (Hoban Law) litigated this case and the court ruled that hemp and its derivatives were no longer controlled. Can you say resilience? The industry is here to stay.
The CBD industry began as an offshoot of the marijuana extraction technology sweeping the nation in the early medical marijuana days. Individuals could lawfully grow hemp, purchase a piece of machinery for a nominal investment (compared to a decorticator for hemp textile processing), and derive cannabinoids in oil form – all with little oversight. The hemp-derivative sector was attractive to many who couldn’t qualify in lawful marijuana licenses due to regulations and entry barriers.
This is what initially caused the CBD explosion. In recent years, the landscape has changed, with the migration toward mainstream food and supplements distribution. This is true in the U.S., E.U., Brazil, Mexico, and Canada. The world is leading toward the global expansion of the cannabinoid industry. We now have billions of dollars in CBD sales, exorbitant demand, and leading consumer packaged goods companies developing their own cannabinoid product lines.
Still, the industry is facing obstacles in international trade. Even though the “Eyes of the World” are upon CBD. Canada has legalized it with federal controls. The US FDA has yet to issue guidelines (2021 is the earliest prediction). The European Commission is in the midst of a similar exercise with its Novel Foods designation and pivoting toward a narcotic classification. These regulatory agencies are primarily concerned with safety data. That takes years to collect and, simply put, mainstream government agencies don’t yet feel they have the necessary information. If they give the green light and something negative happens, all the blame falls on them.
The keyword here is Data. Data is gold. Data is an opportunity. Companies like www.tolktalk.com are collecting cannabis-related data through a consumer-facing community and business supported CRM/CX platform. Those looking to ride the next wave of cannabis success will be plugged into the data.
This leaves many questions unanswered for a global market that www.tolktalk.com plans on answering. What is the standard for CBD ingredients? How should it be sold? How will it be regulated? How should it be branded? What’s the preferred form — Full spectrum, Broad Spectrum, or Isolate?
The heyday for non-psychoactive cannabinoids, including CBD, is yet to come. Instead of hanging it up to see what tomorrow brings, cannabinoids are now part of an international marketplace and their “lane” is getting more defined.
Regulation on a global scale is coming. Cannabinoids are on the verge of being used in toothpaste, beverages, personal care products, and almost anything else you can imagine. There may be technical challenges ahead related to CBD as an Active Pharmaceutical Ingredient (API) and with synthetic or synthesized cannabinoids, but that’s a topic for another time.
When concrete regulations come, we’ll see a “second wave” of CBD sweep across the planet, along with the unleashing of minor cannabinoids and cannabis terpenes. So, get out your formulas. Perfect your brands. Position yourself for what’s next. If you don’t, you won’t be ready for the real gold rush.