The Business of Hemp
28 MARCH 2019 WINSIGHT GROCERY BUSINESS
applications. Vitamin shops, cafes, pet stores, hair salons,
pharmacies, grocery stores and more have the possibility
to cash in on this cash crop, which analysts project will be
a multibillion-dollar business within five years.
However, while the 2018 Farm Bill has been integral in
paving a path toward the category’s consummation, the
course is not without obstacles. National hemp regulations
from the U.S. Department of Agriculture (USDA) are pend-
ing, and the scope of the U.S. Food and Drug Administra-
tion’s (FDA’s) authority to ban CBD from food, drugs and
cosmetics remains obscure. As such, retailers and manu-
facturers are searching for direction through the intrinsic
maze of hemp’s complexities and uncertainties, with some
boldly marching head on, others proceeding with caution
and many awaiting a finalized map before diving in.
While the pathway is indeed hazy, experts agree that
one concept is clear: Budding opportunities are embedded within the weeds.
Unpacking the 2018 Farm Bill
s retailers prepare to venture into
the precarious CBD landscape, it
is important to first examine the
terrain at hand, because the passage of the 2018 Farm Bill
sparked equal parts excitement
and confusion in terms of next
steps for business operators.
Cannabis enthusiasts rejoiced at the bill’s landmark
removal of hemp from the CSA, provided it contains no
more than 0.3% THC on a dry-weight basis, as well as the
legalization of the sale, cultivation, possession and transport of industrial hemp across state lines for commercial
However, the bill has several yet-to-be-determined caveats—paramount to which tasks the USDA with determining
national hemp regulations “as expeditiously as practicable,” based on findings of a yearlong study of the progress
of 42 states with existing hemp pilot programs to “
determine the economic viability of the domestic production
and sale of industrial hemp,” to be submitted to Congress.
Additionally, the bill allows states, territories and
Native American tribes to submit their own hemp-grow-ing regulation plans—including inspection procedures
that must be conducted at least once annually, bookkeeping on land used for hemp cultivation and disposal plans
for hemp that exceeds the THC limit—to the USDA, but
it does not provide states with any guidelines as to how
hemp should be regulated or manufactured.
The air around CBD is even foggier, because the com-
pound can be derived from both hemp and marijuana
plants. Yet only hemp is exempt from the CSA, and mar-
ijuana remains a Schedule I controlled substance, which
makes the distinction between hemp-based and marijua-
na-based CBD crucial.
Erica McBride Stark, executive director of Washington,
D.C.-based National Hemp Association, says CBD lies in
the limbo of being “neither a controlled substance nor
FDA approved.” States have taken it upon themselves to
decide how it will be treated, with many allowing CBD as
part of a medical program, others legalizing it and a few
states banning it altogether, McBride Stark says.
At the time of the Farm Bill’s passage, FDA Commissioner Scott Gottlieb said in light of the proliferation of
products containing cannabis, the agency planned to
“advance new steps” to better define its public health
obligations in the area and would continue to closely scrutinize products that could pose risks to consumers and,
if so, issue warnings while taking enforcement actions.
Barring the Buzzword
he passage of the 2018 Farm Bill
could very well mark the first step
toward nationwide marijuana
legalization, but CBD advocates
should caution against lumping
cannabis and CBD into the same
retail category, advises Blake Pat-
terson, co-founder and president
of hemp category management provider MarketHub
Retail Services, based in Denver.
While the stoner connotation around cannabis is slowly
subsiding, there are distinct categorical differences
between cannabis and CBD—in terms of not only legali-
ties but also consumer comprehension and acceptance—
Source: Hemp Industry Daily, 2018 Farm Bill Report
Annual U.S. hemp-derived CBD retail sales estimates
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