Member Blog: CBD Oracle Launches Consumer Protection Standards to Address Industry-Wide Issues in Hemp Products
CBD Oracle has released a set of objective, expert-backed criteria to help consumers find better hemp products and lay out clear expectations for companies.
There is a lot of talk about self-regulation, but with very little top-down control, bad actors are still widespread and the challenge of finding safe, reliable, and effective products falls primarily on consumers. At the same time, honest brands are faced with competing pressures, hoping to put out products that tick all the right boxes but balance this out against profitability.
CBD Oracle set out to address these issues, interviewing 22 experts and two governmental agencies about what they’d look for in a hemp product if they were recommending one to friends, family, or patients. The result is a set of objective criteria for evaluating cannabinoid products, covering everything from the plant on the farm right through to the labeling and marketing of the finished product.
For consumers, it’s a guide for what to look out for, but for brands, it’s a blueprint for making the highest-quality cannabinoid products you can and standing out from the bad actors.
The Problems With the Hemp Industry and How They Affect Consumer Trust
While the 2018 Farm Bill left the regulation of hemp products to the FDA, the agency has dragged its feet in establishing regulations and left the task to the states. The end result of this is often described as a “patchwork of regulations,” but this misses what is arguably the biggest issue: enforcement varies drastically from state-to-state and this lack of oversight means that customers cannot depend on anything, even if their state theoretically has solid rules in place.
Reduced consumer trust: Consumers know that many brands don’t hit the mark, so they are more likely to stick to one or two brands they can rely on and shop around less.
Governmental scrutiny: The lax standards in the hemp industry attract negative media coverage and in turn encourage state governments to crack down on hemp.
Market uncertainty: The lack of trust from consumers and skepticism from the government brings uncertainty into the industry. The threat of increased regulation or even outright bans hangs over the future.
A Comprehensive Framework for Evaluating Cannabinoid Products: In Brief
CBD Oracle spoke to 22 experts from the industry, research, medicine, and the law, as well as the FDA and the California Department of Public Health, and reviewed existing standards to come up with their Comprehensive Framework for Evaluating Cannabinoid Products.
The entire framework is in CBD Oracle’s PDF report and blog post, but briefly, the experts identified several key factors consumers should look out for and the industry should strive towards.
The plant’s origin and cultivation method
The plant should be grown in the US, ideally using organic farming methods, outside under natural light, from a single strain and single origin, and preferably in states with ideal climates and robust hemp programs.
Extraction
The extract should be made from flower using a clean method that removes contaminants while preserving beneficial compounds, such as CO2, with natural cannabinoids (not converted) and terpenes (or at least 99% purity for isolates).
Third-party lab testing
There should be full-panel tests publicly available for each batch/lot of each finished product, ideally including tests of raw materials, from an accredited lab with a credible reputation, which confirms that the product is free from contaminants and the potency is within 10% of the advertised amount (20% for low-dose products). The lab report should be less than a year old and should have a QR code for easy verification.
Quality control
The company should be a GMP-certified manufacturer, with an FDA-registered facility, that oversees the entire production process (i.e. not a white-label brand) and has a chain of custody documentation. The hemp should ideally be USDA certified organic, and with NSF sport certification if it’s intended to be 100% THC-free.
Ingredients and additives
The product should be made without harmful or unnecessary additives, including (but not limited to) vitamin E acetate, synthetic fragrances, artificial colorings, parabens, or synthetic cannabinoids, shouldn’t include unregulated supplements, and any vape products should preferably use a base of propylene glycol (and/or vegetable glycerin).
Packaging and labeling
The product should comply with all labeling requirements, be packaged in a child-resistant container, with packing and expiration dates shown, clear dosing instructions, a batch/lot number for traceability, complete ingredient listing, a QR code linked to the lab report and appropriate health warnings.
Reputation, transparency, and marketing
The company should not make unapproved medical claims, use marketing intended or likely to appeal to youth, or sell hemp products without substantive age verification. They should be transparent about their team, work with experts, ideally engage in advocacy or be a member of industry organizations, and offer good customer service, including a money-back guarantee.
Conclusion – Working Towards a Better Industry
It’s likely that the upcoming update to the Farm Bill will come into force before we get any substantive regulation of hemp at the federal level, with the updatelikely restricting intoxicating hemp. The only way to show the industry is responsible before then is to hold it to higher standards, pushing customers to expect more and companies to do more to ensure their products are safe, efficacious, and reliable. While the criteria won’t solve the problems facing the industry, they offer a clear path forward for the industry and empower consumers to expect more of the companies whose products they buy.
Update from D.C.: The Latest on Marijuana Rescheduling and the Farm Bill
There were two major cannabis policy developments from Washington, D.C. last week: language of the proposed rule for rescheduling became available (accompanied by a video from the President reaffirming his commitment to reform) and the long anticipated text of the farm bill was released.
The text of the proposed rule confirmed that the Attorney General is seeking to move marijuana from Schedule I of the Controlled Substances Act (CSA) to Schedule III. Doing so would provide tax parity for the cannabis industry by ensuring legal businesses would no longer be subject to an arcane provision of the U.S. tax code — Section 280E — that prohibits deductions associated with “drug trafficking.”
The Department of Justice asked for public comment on various topics, including:
Facts and expert opinion on different forms, formulations, and delivery methods
Dosage and concentration information
Data on marijuana constituents, routes of administration, and impact of Delta-9 THC potency
Information regarding the scope, duration, and significance of marijuana abuse
Comments on the practical consequences of rescheduling marijuana to Schedule III under the relevant statutory frameworks
Comments on the economic impact of the proposed rule
Information on how rescheduling may impact “small entities”
The public comment period is officially open and will conclude on July 22. NCIA will be submitting comments during the rulemaking period on behalf of the hundreds of small businesses we represent in the legal cannabis industry.
In addition to this exciting announcement, the House Agriculture Committee also released the text of the overdue 2023 farm bill (the bill’s original deadline was September 30, 2023, but was extended for one year).
Included in the bill is language regarding hemp and hemp production. The 2018 farm bill legalized hemp by authorizing the production of hemp and removing hemp and hemp seeds from the CSA. Since then, the proliferation of hemp derived products containing various cannabinoids (CBD, Delta-8, THC-A, etc) has become commonplace. The increase of intoxicating products derived from hemp has concerned many — including those in Congress.
During the Committee markup, an amendment was offered by Rep. Mary Miller (R-IL) that would federally ban all ingestible hemp products with any level of THC. The amendment passed via voice vote.
This is an area we at NCIA are keeping a close watch. As the association that represents the entire cannabinoid industry, we are urging Congress to eschew the failed policies of prohibition and to instead move to regulate hemp and marijuana-derived products equally. Make sure you check out our brand new position paper “Navigating the Future of Cannabinoid Regulation: Balancing Safety, Innovation, and Consumer Access”, which delves into the complexities of cannabinoid production, differentiating between plant-extracted and synthesized cannabinoids. It also addresses the challenges posed by the current regulatory landscape and advocates for a common-sense federal framework that emphasizes safety, consistency, and quality across all cannabis-derived products.
Committee Blog: Your Voice Matters – Advocate for Crucial Changes in the American Hemp Industry
The Hemp Industry needs your help. The 2018 Farm Bill, which made it legal to grow and process hemp, was a big step forward for the larger Cannabis industry. After the bill passed, lots of growers, processors, and manufacturers started building the Hemp Industry. Like any new industry, it’s had its ups and downs. But there are some big roadblocks that Congress can remove to help the Hemp Industry grow and set the stage for better rules around all Cannabis in the future.
2023 is a crucial year for American hemp producers as the 2018 Farm Bill is due to expire. Congress is now drafting a new Farm Bill that will direct our agricultural and food systems for the next half-decade. During this critical period, the NCIA Hemp Committee is working tirelessly to rally support for amendments that will not only benefit the industry but also our customers. Our requests are as follows:
Update the legal definition of hemp to allow for up to 1% Total THC: This would offer critical protection for farmers and processors, as the current legal limit can sometimes be exceeded naturally in the crop growth process, leading to crop loss and financial hardship.
Support the Growth of the Hemp Industry by Encouraging Banking and Lending Services: The Treasury department should provide written guidance for banking and lending services to hemp-related businesses, removing barriers to growth in this burgeoning industry.
Support HR 3755 for Non-consumable Hemp: By recognizing the distinction between consumable and non-consumable hemp products, we can encourage the development of a wide range of industrial applications for hemp, from textiles to building materials.
Prevent Misuse of THC by Teens and Young Adults: This requires comprehensive educational initiatives to provide accurate information about THC and its potential effects. In doing so, we can ensure that the growth of the hemp industry does not inadvertently lead to misuse of THC among young populations.
During the recent NCIA Lobby Days, we had constructive meetings with influential decision-makers, including members of the Agricultural Committee and their staff. Our team left these sessions with a sense of hope and determination, having shared our top four priorities and discussed other important issues. Now, we’re calling on you, the supporters of the Hemp Industry, to make your voices heard and contact your members of Congress to showcase broad support for these initiatives.
“NCIA Lobby Days provides the stage and podium, and you bring the voice. We meet with decision makers (congressional staff) who ARE interested in our real-life scenarios, and it educates them to educate their Senate and House of Representative leaders. Education is power. It (Lobby Days) also provides an environment to meet like-minded people in the cannabis industry, share our stores, learn/educate, and collaborate. I plan to attend each year as it is enlightening and empowering!” Jillian Johnson
How can you help?
Remember, members of Congress are elected to represent the interests of their constituents – that’s you. But they can only effectively do so when they’re fully informed about the issues that matter to you. Your voice is powerful and essential to our democratic process. By speaking up, you can provide important insights and help shape the future of the Hemp Industry.
As we look forward to the 2023 US Farm Bill, there’s a substantial opportunity to modify the regulations around hemp cultivation and usage. Adjusting these regulations can stimulate the growth of the hemp industry while still ensuring consumer safety. The potential of hemp as an agricultural product is vast, with applications including food, fuel, fiber, building materials, grain, and medical use. It’s important to note that while cannabinoids often dominate the headlines, they make up only a small slice of the industry’s potential size.
Experts predict that incorporating hemp into cosmetics, construction materials, and textiles could catapult the industry to over $1 trillion in annual sales. However, the current regulations pose significant challenges to this innovative industry’s expansion, especially for conscientious farmers. The fear of having their crops destroyed because of slightly exceeding a set THC limit is a serious obstacle.
At present, the definition of hemp rests on a Total THC limit of 0.3%, a figure chosen in the 1970s for classification purposes, not for assessing the plant’s psychoactive effects. Bumping this limit up to 1% Total THC would have a negligible impact on impairment but could have a monumental effect on farmers’ operations.
Research from 2020 by the University of Illinois, University of Wisconsin, Michigan State University, and Purdue demonstrated that more than half of the common hemp varieties could surpass the Total THC limit under certain conditions. However, this research also revealed that only 4% would breach the limit if it were raised to 1%.
Growing hemp that exhibits desirable traits for industrial uses, like a long straight stalk, high fiber, or high seed yield, requires the plant’s full maturation. This maturation is often linked to higher THC profiles. Unfortunately, the current strict conditions and genetic variation restrictions severely limit the plant’s potential applications.
While responsible hemp growers are in favor of state-led regulations for cannabinoid extractions that can cause impairment, it’s clear that an unrealistically low THC limit isn’t the best approach. Other nations, such as Thailand, Mexico, and Switzerland, have already updated their regulations, defining hemp as containing up to 1% Total THC.
By making a small change to the legal definition of hemp, we can unlock the industry’s potential. It will allow farmers across the nation to make the necessary investments to keep pace with an industry set to grow from being worth billions to trillions of dollars. By encouraging this change, we can foster American innovation and boost rural economies, reinvigorating the manufacturing sector in the process. Now is the time to recognize and adapt to the potential of this versatile plant.
How can you help?
Remember, members of Congress are elected to represent the interests of their constituents – that’s you. But they can only effectively do so when they’re fully informed about the issues that matter to you. Your voice is powerful and essential to our democratic process. By speaking up, you can provide important insights and help shape the future of the Hemp Industry.
If you are a cannabis-related business, and are looking to accept credit cards, it is only possible to do so if you are selling a product that is defined as legal hemp by the 2018 Farm Bill.
The 2018 Farm Bill provides that:
“The term ‘hemp’ means the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
For the most part, it’s pretty cut-and-dry. Marijuana is a schedule 1 drug. Hemp is not. If your product has less than .3% Delta-9 on a dry weight basis, it’s not marijuana, it’s hemp. And since it’s hemp, it’s federally legal. And since it’s federally legal, it can be purchased with checks, credit cards, or debit cards. Hemp products are, reductively, as incendiary as a stick of butter.
Of course, there is the law and there is how acquiring banks—banks that offer merchant accounts—interpret the law. Across the U.S., there are hundreds of acquiring banks. Of those, only six or seven offer merchant accounts to hemp businesses.
That’s it, plus payment service provider Square.
The immediate problem for the few acquiring banks that have, laudably, said, “Yes,” to hemp is, “how do we distinguish products that are .3% Delta-9 or less (and therefore, yawningly legal) from those that are over .3% Delta-9 (and therefore, illegal as angel dust)?”
Enter the Certificate of Analysis, or COA, or lab report. While there is nothing in the law stating that COAs are required to prove that a product is within the federally legal limit, their role is sacrosanct during the boarding process. For every hemp-derived product, there must be a corresponding COA proving that the product being sold is hemp, and not marijuana.
Fortunately, there are labs across the nation. The U.S. Department of Agriculture website lists 85, as of May 2023. Manufacturers and businesses ship their samples to these labs. The labs run their tests and the COAs are issued.
Simple, right?
Not really.
There are no standards in place for these reports. No templates. Every laboratory’s COAs—while substantively providing the same information—look a little different. Furthermore, most bankers haven’t seen a lab report since high school chemistry, and you’ve got a recipe for confusion or misunderstanding (frequently both).
This COA, when it was initially presented to the bank, was rejected. To the underwriter, it was an open and shut case.
When the bank opened its door to offering acquiring to hemp businesses, its policy was to reject anything with greater than .3% Delta-9 by weight.
The top of this COA showed an instance of Delta 9 that read .189%. That passed muster, certainly. However, when he delved further into the analyte detail, he noted additional Delta-9 figures in excess of the .3% limit:
10.368 in the mg/unit cell
1.892 in the mg/g cell
It was not clear to the bank’s underwriter which of the two—per-unit or per-gram—corresponded with the by-weight percentage he was to be mindful of, but both were certainly over the .3% limit.
So, open and shut case: DECLINED
The salesperson that brought the merchant to this bank was surprised by the rejection. He hadn’t looked at the COAs very closely, but it seemed unlikely that this merchant had been selling products on her website that were in excess of .3% Delta-9.
Why? Because if the merchant had been selling products on its website in excess of .3% Delta-9, it would have been engaging in egregious felony drug trafficking. The salesperson doubted that was the case.
The salesperson did something he didn’t normally do: he took out his calculator.
He wanted to know why it read .189% Delta 9 at the top, but 10.368 in the analyte table. He noted the unit size at the bottom of the page was a gummy weighing 5.480g.
For the sake of simplicity, he multiplied that by 1000 to convert it to milligrams. That made it 5480 mg
Then he entered the onerous 10.368mg from the mg/unit figure in the analyte table and divided it by 5480mg. The resulting calculation netted the following total: .0018919.
Next, he converted it to a percent, and found that the result was .189%, which matched the figure at the top of the COA, exactly.
The next day, the salesperson presented the COA to the bank, with the markings and The Equation just as shown here.
It was an open and shut case: ACCEPTED
This situation is an example of why banks and credit unions unknowingly reject compliant hemp businesses from merchant processing solutions. As stated, a simple mathematical calculation was the difference between being accepted or rejected for necessary merchant processing services. Without proper merchant servicing not only are cannabis businesses’ profitability affected because they can only take cash; cash is also not as traceable or auditable as electronic transactions.
In general, businesses providing services to the cannabis industry are often challenged with disentangling legal risks with the benefits of their necessary services providing more transparency. With enhanced knowledge of the cannabis industry and its parameters, the cannabis industry will recognize a greater participation by all businesses necessary for the life of the industry thereby enhancing cannabis businesses’ likelihood to succeed but also enhancing the legitimacy and regulation of the industry.
Committee Insights | Meet the Minors (Novel, Minor, Synthetic Cannabinoids – Part II)
In this edition of our NCIA Committee Insights series, originally aired on May 11, 2023, we were joined by members of NCIA’s Cannabis Manufacturing, Scientific Advisory and Hemp Committees for an in-depth discussion of the most talked about minor, novel, and synthetic cannabinoids.
What scientific publications exist for each compound? What do we know about each molecule’s physiological, psychoactive, and therapeutic effects?
You’ll find out during this informative session featuring leading chemical experts, manufacturers and product development specialists. Along with audience members they explored these compounds from various perspectives to examine their implications for consumers, medical practitioners, patients, producers and regulators.
Learning Objectives:
• Molecular Structures and Identification of novel, minor, and synthetic compounds
• Published Physiological and Psychoactive effects of these compounds
• Perceived therapeutic effects
• Opportunity to ask about other new compounds not in presentation.
Safeguarding Consumers in the Cannabinoid Product Landscape (Part III):
Know Your Hazards – Occupational Health and Safety Considerations in Cannabinoid Ingredient Manufacturing (Part IV): https://bit.ly/3rEUeKP
Concepts for Regulatory Consideration – Shifting the Conversation from “Cannabis vs. Hemp” to “The Cannabinoids” (Part V): https://bit.ly/3P3r5AW
Video: NCIA Today – Thursday, February 9, 2023
NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on LinkedIN for NCIA Today Live.
Member Blog: Payment Processing In The Cannabis Space
There is a lot of confusion about payment processing in the cannabis space because payment processing is somewhat confusing to begin with, and because, in the cannabis space, ambiguity is a way of life.
The title of this very blog post could, realistically, seem misleading to some.
So, to be clear, when I say, “Cannabis Space,” I mean the entire industry — from plant-touchers (CBD included) to the ancillary businesses built up around it.
The passage of the 2018 Farm Bill marked an exciting new chapter for the industry. Suddenly, CBD, or, more specifically, any ingestible cannabis product containing .3% THC or less by volume, was classified as hemp. And since it is marijuana, and not hemp, that is defined as a Schedule I substance under the United States Controlled Substance Act, the Farm Bill, technically, made products like CBD as legal as cow milk — federally, anyway.
The upshot of this new classification is that now, at least some players in the cannabis space can market their products to a national base of consumers and clients, and they can do so by accepting credit cards as payment.
However, the myriad Acquiring Banks across the United States have not exactly jumped for joy at the prospect of providing credit card processing in the form of merchant accounts to CBD retailers. Reticence rules. CBD is considered high risk, and four years on, only a handful of them have thrown their hat in the ring.
Jargon Alert I: Acquiring Banks and Issuing Banks
In merchant processing parlance, banks fall into two categories: Acquiring Banks and Issuing Banks. Acquiring Banks, or, Acquirers, provide merchant processing accounts to businesses wishing to accept credit card transactions. Issuing Banks, short for Card Issuing Banks, are banks that offer branded payment cards directly to consumers. For example, if your bank has ever offered you a Visa card, it is an Issuing Bank (not that it couldn’t also be an Acquiring Bank, too).
Jargon Alert II: CBD is ‘High Risk’
CBD is deemed high risk by the card associations (i.e., Visa, MasterCard, American Express), and when the card associations deem a product or industry high risk, most Acquiring Banks tap out. This is because financial institutions are, by nature, risk averse (subprime mortgage crisis notwithstanding).
So let’s talk for a minute about risk. High risk, that compound term, is a truncation of a longer phrase: ‘Higher risk of fraud or chargebacks.’
Why are CBD products at higher risk of fraud? It’s impossible to say for sure since the Visas and MasterCards of the world are publicly traded companies with their own trade secrets and IP, but there are several characteristics unique to CBD, or any cannabis product now federally legal, that likely figured into that decision.
Those FDA disclaimers that CBD retailers must print or paste on all product packaging and webpages are as good a place as any to start. They are mandatory because none of the benefits assigned to CBD have been clinically proven. There just isn’t enough data or testing at this point, and no big story there. That’s what happens when you demonize a plant for 100 years.
Consequently, from the perspective of the FDA, and the card associations, by extension, consumers are making CBD purchases with baked-in expectations based, exclusively, on word-of-mouth advice and anecdotal data. That’s a recipe for dissatisfied customers. And dissatisfied customers tend to charge back transactions.
The card associations, and the banks who provide merchant accounts, worry incessantly about fraud and chargebacks.
Too Close for Comfort
Dissatisfied customers aside, there are onerous legal nuances that make the prospect of boarding cannabis merchants, even those selling products that are federally legal, daunting for banks.
Selling a product with .31% THC across state lines is felonious. It is a federal offense. Violating a law like that could get a bank’s charter revoked, or, at a minimum, result in massive fines.
On the other hand, selling a product with .30% THC across state lines is 100% federally legal. As stated above, safe as milk, federally.
That is a heck of a distinction. If any product contains more than .3% THC by volume, it is ‘marijuana’ in the eyes of the federal government. From the perspective of the banks, that’s a little close for comfort. Furthermore, banks don’t operate laboratories. They must rely on testing data presented to them in the form of third-party lab reports — Certificates of Analysis or COAs for short — to verify that the products being sold are federally legal.
The last thing an Acquiring Bank wants to do is violate a federal law EVER. It could result in a loss of their charter, lawsuits, and massive fines. And it’s important to keep in mind that the Acquiring Banks out there offering merchant accounts to CBD retailers are not giant, publicly traded institutions like Bank of America or Wells Fargo. They tend to be much smaller, and therefore, have infinitely smaller war chests for court cases.
Still, separating the federally legal Tier I cannabis product from the federally illegal Tier I cannabis product should be pretty cut-and-dry. If the product you’re selling is .3% THC by volume or less, it is exempt from the Controlled Substance Act (CSA). If that threshold is documented in the product’s Certificates of Analysis (COA), you ought to be able to sell it.
Unfortunately, it’s not that simple. When bank underwriters look at percentages of Delta 8, Delta 9, and Delta 10 on the COAs that cross their desks, they’re frequently at sixes and sevens trying to figure the whole thing out.
From the perspective of the 2018 Farm Bill, a cannabis product is hemp if it contains .3% Delta-9 THC or less by volume, but what everybody says is “.3% THC or less by volume.” Consequently, when the compliance officer at the bank is performing her due diligence by inspecting the COAs corresponding to each product, she may encounter a lot of crooked numbers, and she may blanch at the results.
Those results, often, look something like the following:
00.195% D9-THC
52.475% d8-THC.
Federally, the Delta-9 threshold is the only threshold that matters. The 2018 Farm Bill says as much, and the 9th Circuit Court of Appeals in California affirmed it in a ruling this past May. Therefore, in the example above, the Delta-9 threshold has not been crossed. It’s not even close. It is textbook HEMP, even if the Delta-8 threshold is off the charts.
However, if the compliance officer was provided the remit, “.3% or lower,” he’s likely to look at this and say, “Fail,” without realizing that the Delta-8 THC information is irrelevant as far as federal law goes.
Complicating the underwriting further is the fact that there is, to date, no standard template for COA reports. Every lab presents them differently. Bank compliance officers rarely moonlight as scientists. Like most of us, these CBD COAs are probably the first lab reports they’ve looked at since high school chemistry.
Furthermore, the banks can set their own rules. They don’t have to board CBD merchants. Few do, and those few that do have their own standards and practices.
Todd Glider has been an e-Commerce leader since the start of the Internet age. He has an MFA in Creative Writing from the University of Miami, and has served as CEO for small and medium-sized technology companies in Spain, Austria and the United States. As our Chief Business Development Officer, Todd introduces MobiusPay’s suite of award-winning financial services to new industries, and implements the development strategies and key partnerships needed to bring value to new customers.
MobiusPay, Inc. is a U.S.-based global financial services organization that is committed to empowering individuals and businesses. For more than a dozen years, MobiusPay has leveraged state-of-the-art secure billing technology, long-standing relationships with financial institutions and award-winning customer support to provide merchant processing and payment solutions to brick and mortar and digital businesses around the world.
Member Blog: Top 6 Pathogens Seen in Cannabis Plants
By Angel Fernandez and Felipe Cisternas, MyFloraDNA
Pathogens cause diseases when looking for a host body to infect. They come in diverse forms: bacteria, fungi, worms, viruses, and also prions. Pathogens are one of the significant threats to cannabis fields. These silent visitors may cause your plants to produce fewer trichomes, small buds, or even death.
Identifying each pathogenwill help to understand how each of them propagates, its symptoms, and its consequences. In this blog, you’ll find everything you need to know about:
Hop Latent Viroid (HLV) is a single-stranded infectious RNA that interferes with cannabis plant growth. Once the Hop Latent Viroid has infected the plant, the obvious sign of infection is dudding, which is when the plant grows smaller, shorter leaves in the process. HLVcan also cause other symptoms, such as yellowing, and necrotic and malformed leaves.
These plants will have fewer traces of trichomes in their structure. Detecting HLV on time is crucial to avoid an existential threat to the entire garden.
Botrytis Cinerea
Botrytis Cinerea, or bud rot, is a fungus that damages the tender parts of plants in areas of high humidity. This necrotrophic fungus will invade damaged tissue. The symptoms include smaller buds, the development of gray mass spores, and brown, water-soaked spots found on leaves. A major consequence of this fungus is that it can kill cannabis plants within a week.
Lettuce Chlorosis Virus
Much like Botrytis Cinerea, Lettuce Chlorosis Virus can potentially destroy an entire garden. Likewise, Lettuce Chlorosis Virus occurs in lettuce grown in southern California. The plants change into a frail yellow color. They will become very brittle and stunted. One way to prevent the virus from spreading is to take a sample of tissue from a cannabis plant and perform qPCR tests to make sure the plant is virus free.
Cannabis Cryptic Virus
Cannabis Cryptic Virus is a double-stranded RNA virus causing subtle symptoms to plants. Some of these symptoms include smaller flower quality and stunted growth. Thus, this virus can affect plants by producing fewer terpenes, cannabinoids, and trichomes, which are three essential components that serve different purposes for cannabis plants.
Alfalfa Mosaic Virus
Another pathogen is Alfalfa Mosaic Virus, the virus starts by killing cells within a plant and this can be a potential problem for groups of plants. Aphids, small insects, will begin to infect one plant after another as they move and transmit the virus instantly. Seed transmission is also a possibility. There’s no known cure so it is best to care for plants to avoid infection from this type of virus. The symptoms are the same as many of the previous viruses and diseases; stunted growth, slower yield, and calico or yellow color is typically seen on leaves. The good thing is that this can be detected on time by performing serological tests, or antigen and antibody tests to help prove immune status.
Beet Curly Top Virus
Lastly, Beet Curly Top Virus is a dangerous plant virus containing a single-stranded DNA that can affect all kinds of plants, especially cannabis plants, giving them a serious infection. Symptoms include showing a yellow color with purple veins, leaves beginning to curl, seedlings dying out, and deformation beginning at the buds. Since this virus contains a protein carrying a unique code that allows for host cell replication if the virus is not detected on time the cannabis plants will die.
Recognizing the danger these pathogens pose to cannabis plants, and acknowledging their potential to prevent cultivation is very important for growth and success.
Author: Angel Fernandez, CEO & Co-Founder at MyFloraDNA. “It is time to fill in the gap between DNA Sciences and Agriculture. MyFloraDNA is willing to show the huge opportunities that exist for modern genetics in agriculture. Now, it is time for another agricultural revolution”
Co-author: Felipe Cisternas, Intern at MyFloraDNA
Editor: Ashlyn East, Intern at MyFloraDNA
About MyFloraDNA: We are a genomic laboratory based in Woodland California, delivering modern genomics for the cannabis industry. MyFloraDNA provides data-driven decisions to help breeders increase their plant yields.
Our services include Trait detection (cannabinoid profile and sex/gender ID), Pathogen Detection, and Genetic Validation Services. We offer breakthrough solutions using the inner power of your plants.
Who asks if you think you have an infection in your garden?
We highly recommend you consult with DNA Laboratories. They will guide you through the process, test your plants, and let you know if they are infected with HLV or not.
U.S. Federal Appeals Court Legalizes Delta-8 THC, Setting Precedent for the Cannabis Industry
By Sadaf Naushad, NCIA Intern
Thanks to the Agricultural Improvement Act of 2018 (2018 Farm Bill), hemp is now federally legal, permitting U.S. farmers to cultivate, process, and sell hemp. Since its passing, however, businesses in the hemp industry have found themselves in a legal gray area.
With the 2018 Farm Bill eliminating restrictions on the psychoactive cannabinoid delta-8 THC, the companies deemed their delta-8 THC products within legal guidelines. Several jurisdictions disagreed, calling for clarification on the status of delta-8 THC.
Last week, the U.S. Court of Appeals for the Ninth Circuit addressed the dilemma, claiming delta-8 THC products as federally legal.
Let’s consider what delta-8 THC legalization means for the future of the cannabis industry.
Because recreational cannabis use remains federally illegal, delta-8 THC products continue to gain popularity nationwide. Manufacturing developments have led to enhanced consumer products, in which cultivators safely extract delta-8 THC cannabinoids from hemp plants.
While delta-9 THC constitutes a major psychoactive cannabinoid in the marijuana plant, delta-8 THC appears in trace amounts of the plant. Its psychoactive properties grant consumers gentler side effects compared to delta-9 THC.
On Thursday, a three-panel judge of the U.S. Court of Appeals published their opinion regarding delta-8 THC, ruling products containing the psychoactive ingredient as federally legal. According to the panel, delta-8 THC qualifies as a legal substance under the present federal definition of hemp. Federal law outlines hemp as “any part of” the cannabis plant, in which “all derivatives, extracts and cannabinoids” with less than 0.3% delta-9 THC by weight are allowed.
Had U.S. Congress unintentionally created a loophole leading to the legalization of delta-8 THC, the U.S. Federal Appeals Court stated that Congress should be responsible for resolving the issue. The panel specified that they would not replace its own judgment with Congress’ policy rulings. In the meantime, the Court defines the federal hemp law as “silent with regard to delta-8 THC.”
According to a Politico article, “Members of Congress have proposed fixes to federal hemp laws that would close this loophole. Rep. Chellie Pingree (D-Maine) introduced a bill in February to limit hemp and hemp products by calculating the total THC rather than focusing on Delta-9 THC. At the same time, state hemp regulators are voicing for a similar change advocating for the 1 percent total THC definition of hemp. Meanwhile, some states have moved to ban the sale of Delta-8 THC products or to regulate them similar to recreational marijuana.”
NCIA takes a strong position that Delta-8 products and any other psychoactive cannabinoids must be restricted to adults over 21 and regulated by the states so that these products are subject to the same testing requirements, track-and-trace rules, and excise taxes as other adult-use cannabis products.
Furthermore, if you are interested in learning more or getting involved with NCIA’s Government Relations work please contact Madeline Grant at madeline@thecannabisindustry.org to schedule a call. As the oldest and largest trade association, our Government Relations team has been hard at work for over a decade educating and working with congressional offices. NCIA held its Virtual VIP Lobby Days last week, May 16-19 on Capitol Hill. NCIA’s Evergreen members participated in congressional meetings all week long to advocate and educate members of Congress(s) and staff on the importance of cannabis policy reform. We discussed the importance of keeping the Secure and Fair Enforcement (SAFE) Banking in the America COMPETES Act and descheduling cannabis at the federal level. You can read more about cannabis and banking from last week’s blog HERE.
NCIA members were able to share their personal stories about being in the cannabis space and relay their expertise to further understanding of the struggles and hurdles cannabis businesses face every day. There is never a time more important than now to support NCIA’s efforts for cannabis policy reform.
Video: NCIA Today – Thursday, March 24, 2022
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Video: NCIA TODAY – Thursday, March 10, 2022
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Member Blog: Hemp Cultivators and Processors Get a Head Start in New York Adult-Use Cannabis Industry
While the Garden State and Land of Steady Habits are convincingly in the lead of the tri-state dash towards adult-use cannabis sales, new legislation passed last week at least gives the Empire State a burst of energy.
There has been much anticipation since the Marijuana Regulation and Taxation Act legalized cannabis in New York for adults last year. But only medical patients in the state can legally purchase products right now. New York’s slow start to recreational sales has reportedly led to even more unregulated products flooding the marketplace, including delta-8 THC — which is banned under NY state law though widely being sold throughout the state.
By Governor Hochul signing Senate Bill8084A into law on February 22, 2022, the legal cultivation, processing, and distribution of cannabis in New York should be accelerated. Specifically, the new legislation permits hemp cultivators and processors to apply for growing and processing adult-use cannabis, and aims to promote certain equity goals in the process. It creates two new temporary license categories: (1) conditional adult-use cultivator licenses; and (2) conditional adult-use processor licenses. These licenses must be issued by December 31, 2022, and will be valid through June 30, 2024.
Among other requirements, applicants seeking conditional cultivator licenses must be prepared to demonstrate they are authorized hemp growers in good standing. Although they must only show good standing since December 31, 2021, applicants must also show proof of growth for two of the last four years.
Cultivators must also comply with geographic restrictions for growing and are limited to outdoor or greenhouse settings. Outdoor facilities may have a maximum of 43,560 square feet of flowering canopy. Greenhouse canopy may not exceed 25,000 square feet, and can use up to 20 artificial lights. As expected, licensees must also comply with any environmental standards and requirements mandated by the Office of Cannabis Management.
For those seeking conditional processor licenses, licensees must hold an active cannabinoid hemp processor license. This license must have been granted before January 1, 2022. And, as a condition of licensing, transfer of ownership will be restricted through the end of the conditional period. The processor license will allow the acquisition, possession, processing, and sale of cannabis, along with enabling the licensees to engage in blending, extracting, infusing, packaging, labeling, branding, and preparing cannabis products.
In addition, all conditional licensees must enter into a labor peace agreement, participate in an environmental sustainability program and social equity mentorship program. Licensees must also, among other things, become operational within six months from the day they receive the conditional license.
Hemp farmers and processors are no doubt getting a big nugget from the Big Apple. While more regulations on adult-use licensing are anticipated soon, a trail is now blazed for certain New Yorkers in the hemp industry and social equity participants.
Charles J. Messina is a Partner at Genova Burns LLC and specializes in Franchise & Distribution, Agriculture and Cannabis Law. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.
Jennifer Roselle is a Partner at Genova Burns LLC and specializes in Cannabis Law. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.
For over 30 years, Genova Burns has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.
Our firm is proud of its proven track record of assisting multiple clients with being awarded medical licensure in New Jersey, and continuing to counsel clients on the dynamic federal and state regulatory landscape, as well as with corporate transactional, labor/employment, real estate, land-use and other issues.
Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.
SAFE Banking, Hemp, and SCOTUS Update
Photo By CannabisCamera.com
by Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Since I last provided an update from Washington, D.C., not much has changed in terms of cannabis reform. That being said, there are still a few short developments that we’ve been keeping an eye on that we want to bring to your attention! Keep reading to learn the latest:
SAFE Banking
SAFE Banking passed the House for the sixth time in February as part of the America COMPETES Act. More recently, a stakeholder meeting was held with lead champion Congressman Perlmutter that NCIA was proud to have participated in.
During this stakeholder meeting, Rep. Perlmutter reviewed where the bill is at, the hurdles it must clear in order to pass, and reiterated his commitment to passing the bill before this session is over. Congressman Perlmutter also talked extensively about a recent hearing that the House Financial Services Subcommittee on Consumer Protection and Financial Institutions held titled “Small Businesses, Big Impact: Ensuring Small and Minority-Owned Businesses Share in the Economic Recovery.” Chaired by Rep. Perlmutter himself, the subcommittee heard testimony from the Minority Cannabis Business Association’s (MCBA) Executive Director, Amber Litteljohn, on the economic barriers federal policy has created within the burgeoning cannabis market.
Hemp
A few weeks ago, the United States Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS) released the results of the 2021 Hemp Acreage and Production Survey in its National Hemp Report. This is a massive, first-ever survey of its kind to be done at the national level, and is set to provide a “benchmark” analysis of the economic impact of the burgeoning newly legal market.
The survey collected data for hemp grown in the open and hemp under protection. Planted area for industrial hemp grown in the open for all utilizations in the United States totaled 54,152 acres. Area harvested for all utilizations totaled 33,480 acres. The value of U.S. hemp production in the open totaled $712 million. The value of production for hemp that was grown under protection in the United States totaled $112 million. Area under protection totaled 15.6 million square feet.
SCOTUS
The Supreme Court has officially asked the highest lawyer in the land, the solicitor general, to weigh in on cannabis.
Justices were asked whether or not employees seeking workers’ compensation for medical cannabis after being hurt on the job should receive the assistance, but before they do, they want the broader government to comment. They have requested that the solicitor general submit a brief on the topic. For more details, check out this great piece our friends at Marijuana Moment published.
While this week’s update was another “hodge-podge”, NCIA’s government relations team continues to work hard at passing reform this Congress. We continue to meet with offices to elevate the need for SAFE Banking – primarily for small and minority-owned businesses, discuss the decimation that 280E is wreaking, and highlight opportunities for restorative justice. Interested in becoming more involved with lobbying and our government relations efforts? Contact Stefan at stefan@thecannabisindustry.org to talk about becoming an Evergreen Member today!
Equity Member Spotlight: Raina Jackson – Purple Raina Infused Self Care
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I am an Oakland-based hemp CBD & cannabis brand strategist, product developer/educator, and cannabis industry advocate who recently became a member of the NCIA DEI Committee.
I am a Black “urban hippie” born and raised in San Francisco’s Haight Ashbury neighborhood who earned a B.A. with honors from Stanford University in cultural anthropology and sociolinguistics as a first-generation graduate and an MBA from the NYU Stern School of Business.
A product junkie with over 15 years of experience in sales/marketing management, personal care product development, and education. I have worked in the cannabis industry in sales management, distribution, and field marketing since 2015 and have been a Verified San Francisco Cannabis Equity Applicant seeking a cannabis business permit and license since 2018.
PURPLE RAINA Self Care is the culmination of my personal and professional passion for self-care products, the color Purple, and the artist Prince. Prior to entering the cannabis industry, I worked for top NYC beauty/personal care companies Maybelline and L’Oréal Professional, trained at the Vidal Sassoon school in London, and taught cosmetology at The Aveda Institute in SOHO NYC.
Upon returning to the San Francisco Bay Area in 2013, I became enamored with cannabis dispensaries and the local cannabis culture. While waiting for my permit, I decided to offer a hemp CBD version of PURPLE RAINA to show proof of concept, gain market feedback, and to promote the benefits of hemp CBD to a broader audience. The THC:CBD version will be launched in mid 2022.
What unique value does your company offer to the cannabis industry?
PURPLE RAINA Self Care offers topical infusions that soothe sore muscles and joints, nourish the skin from head to toe, and pamper the senses with aromatherapy. PURPLE RAINA Self Care promotes “mindful self-care and grooming” and seeks to appeal to our collective humanity focusing on our common need for daily grooming and self-care on a physical, mental, and spiritual level.
PURPLE RAINA offers a fresh approach to the category through multi-purpose infused topicals that will serve a range of self-care and grooming needs from head to toe, regardless of gender. Most topical products addressing pain relief overlook daily skin/hair care, personal grooming, and aromatherapy. Many have unpleasant odors and can be irritating to sensitive skin. I created PURPLE RAINA for people like me seeking to moisturize dry/sensitive skin and to soothe sore muscles with aromatherapeutic plant-powered products free of allergens and artificial ingredients.
PURPLE RAINA will eventually employ people from the community. I plan to recruit a “Purple Posse” of brand ambassadors who will conduct impactful in-store product demonstrations for consumers and retail staff. The “Purple Posse” will earn income and gain valuable sales presentation skills training.
What are some lessons learned from the beauty industry that you brought into your cannabis business?
My career has more recently reached the intersection of beauty/personal care and cannabis products. I recently learned that some of the largest cosmetic/personal care companies in the world are now incubating emerging brands instead of regarding them as competition to be squashed or absorbed. Some are being groomed for future acquisition but not always anymore. It’s a more mutually beneficial business relationship.
These beauty behemoths realize the importance of an ecosystem of high-end products, mid-priced and value brands, mature institutional brands, and young indie/niche brands readily available online and in stores. It best serves the customer when they have multiple quality choices at a range of price points. These companies are also assuming their corporate responsibility to the industry and society. They are abstaining from unfair competitive tactics aimed at eliminating competition from emerging brands.
What is your goal for the greater good of cannabis?
The cannabis plant, as a metaphysical healing force, deserves to be represented by an equitable accountable industry under a new breed of conscious compassionate capitalism valuing Profit & People / People & Profit like Yin & Yang.
During the 2021 Meadowlands conference/retreat at Camp Navarro, CA, surrounded by majestic redwood trees, I imagined the notion of a relationship between big trees and little trees as an analogy for cultivating an equitable cannabis ecosystem where little trees can still thrive to grow among the big trees, some eventually becoming big trees themselves. Imagine if big trees could share the nutrients in their roots with neighboring little trees, as a metaphor for how corporate financial, technical, and educational resources could be redirected to help benefit emerging equity and legacy businesses. This doesn’t exist in nature but imagine the social and financial impact it would have on so many who have been systematically excluded and discriminated against, as well as on those who contribute these resources.
What kind of challenges do you face in the industry and what solutions would you like to see?
Challenges: I face financial challenges like so many other cannabis entrepreneurs. Yet this is compounded as a Black woman, a member of an underestimated undervalued group that is underrepresented as cannabis business executives and owners. We receive the lowest amount of investment funds across industries due to racism and sexism, though we are the fastest-growing group of business owners in the U.S. and tend to be successfully bootstrapped and financially savvy.
Additionally, there is a big disconnect in current equity programs between the criteria to qualify and the financial resources and business acumen necessary to succeed if you don’t have access to investors and sound cannabis business and legal advisors. Late in the game, I was even told that I didn’t need a cannabis license to make my products and can just hire a manufacturer to produce them under their license. This is a viable option initially to go to market but not long-term. I would have wasted significant time and money and missed the whole point if I abandoned the pursuit of my own license. Also, as a brand of customized topical formulations manufactured by contract manufacturers, my rare business model tends to be overlooked by local and state cannabis regulations. For example, it took a few years and forfeited application fees for the type 13 transport only/self-distribution license I now seek to be introduced, representing the only feasible path to licensure and the only way I could go to market, other than the type-S shared license which doesn’t work for me.
Solutions: As part of a corporate responsibility mandate, successful profitable cannabis businesses along the supply chain, MSOs, and future alcohol and tobacco corporations entering the industry should make contributions into a Cannabis Equity/Legacy Fund collected by state licensing agencies and administered by an industry non-profit like the NCIA or a group of B-corps operating in the highest integrity. These big trees would contribute financial resources and access to key technical services as part of their platinum “industry membership fees,” a standard cost of doing business. In the same way their license fees are proportionate to projected revenue, their contributions into the fund would be proportionate to recent and projected revenue.
Our allies are instrumental in helping those who are resistant or just don’t know what to do to recognize their responsibility to use their privilege for the greater good, ultimately benefiting all parties’ bottom lines and corporate morale. There’s no need for guilt or blame, just empathy, goodwill, good works, and collaboration to help undo historic wrongs over time.
I want to see U.S. cannabis legalization soon with equity and anti-monopoly policies already in place. The cannabis industry should under no circumstances become fully dominated by oligarchies/monopolies like the early telephone and utility companies that had to be split up or even the current social media and tech giants under scrutiny. This policy should demonstrate recognition of the value DEI and BIPOC partners bring to the cannabis industry along the entire supply chain. Government solutions would include SBA grants and forgivable PPP-like loans like any other industry receives.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
I always wanted to join the NCIA since I attended an annual conference years ago but couldn’t afford it. The best part of being a member through the Social Equity Scholarship Program is the weekly Zoom call held by Mike Lomuto for equity cannabis entrepreneurs and allies nationwide. We check in to discuss our triumphs and challenges and share valuable business insights and ideas for building a more equitable cannabis industry. These calls inspired me to apply for the DEIC and to intensify my cannabis equity advocacy and thought leadership.
Video: NCIA Today – Friday, November 19, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
Member Blog: How Can Hemp Businesses Better Self-Regulate?
The hemp industry is still in its early stages, especially when it comes to emerging products like delta-8 THC. While there is some regulation for hemp products, it’s much less than for legal cannabis, and this gives companies some freedom in terms of how they operate and what they do. For the most part, this is a good thing, but there is a downside too. Our report into the industry found that 76% of delta-8 THC products contained illegal quantities of delta-9 THC. This is terrible for consumers, but it also poses a risk to the industry: if you keep raising red flags, the government will eventually swoop in and take action. This is why self-regulation is a crucial concept for hemp businesses going forward.
Why Self-Regulate?
Self-regulation is crucial for hemp businesses because of the scrutiny the industry faces and to improve consumer confidence. Although CBD is generally accepted, this is especially important for companies selling something like delta-8 THC, which attracts more scrutiny because of its psychoactive nature. With states like Texas attempting bans on the substance and the findings of our report showing that the vast majority of products break legal limits for delta-9, the industry is in serious danger of attracting the attention of more lawmakers who may opt for an outright ban. In fact, there are already 18 states with some form of ban or restriction on the substance.
Jayneil Kamdar, PhD from InfiniteCAL Labs commented to us that: “The current delta-8 THC products on the market are very concerning because there is no regulatory body monitoring the safety of these products.”
In our report, we also found that companies tend to undercut customers on delta-8, that only 14% of companies perform substantial age verification checks and that two-thirds of companies don’t test their products for impurities.
It isn’t that self-regulation would be a cure-all, but if companies opt to act responsibly, it is much less likely that they will attract attention from lawmakers. In addition to this, though, self-regulation sends a strong message to consumers that you care about them and that they will get what they wanted when they buy your products. When this doesn’t happen,people will tell others about it.
The more the industry can mirror the regulations of regulated cannabis companies, the better things will go in the long run.
How Can Companies Better Self-Regulate?
However, “self-regulation” can’t just become a vague, catch-all term for generally responsible business practices: clear recommendations are essential in making this goal a reality. Luckily, our in-depth investigation of the delta-8 industry and other similar investigations into the CBD industry have revealed some key areas companies can focus on.
Provide Transparent Lab Reports with QR Codes
Lab reports are a vital part of building consumer trust, and you should ensure there is a QR code on the report so it’s easy for consumers to verify the report on the lab’s website.90% of CBD companies already do this, based on our industry analysis.
Offer a Lab Report for Every SKU
Many companies, however, only offer a COA for the base distillate, rather than every specific type of product it produces. If you sell vape cartridges, for instance, you should have a report available for each variation in flavor, strain, and potency.
Choose Credible Labs for Your Report
Not all labs are equal. If you get a report from a questionable or unknown lab, savvy consumers will still be wary of your product, and in some cases, the results may be unreliable. It’s best to choose a lab with a strong reputation, such as ProVerde, Anresco, SC Labs, InfiniteCAL, and CannaSafe.
Test for Impurities
With two-thirds of delta-8 companies not lab testing their products for impurities, this is a good way to stand out in the marketplace as well as good practice in general.
Verify Customer’s Ages
With most CBD companies not performing robust age verification checks, using a credible age verification system such asAgeChecker is a great step towards self-regulation. They stay up to date with FDA requirements, state laws, and merchant account policies, so you can set it up and then continue basically as normal. This is especially important for delta-8, but it’s also crucial for higher-strength CBD products too.
Label Your Products Accurately
What you claim on the label should be what’s in the product. Lab reports help you verify that this is the case.
Warning and Caution Labels
Only about 55% of hemp delta-8 companies use a warning label, but this is another key part of self-regulation. Suggested verbiage includes:
This product should be used with caution when driving motor vehicles or operating heavy machinery.
Use this product under the guidance of a physician if you have a medical condition, are pregnant or lactating.
Keep out of the reach of children.
This product was manufactured from hemp material that meets federal requirements for hemp products; however, consumption may be flagged by some drug tests.
This goes hand-in-hand with the above, but also, having your products that looklike a bag of Cheetos or anything along these lines is not a good look.
Avoid Medical Claims
Although many people opt to use delta-8 and CBD for medical purposes, if you’re selling the products, making medical claims that might not meet official organizations’ standards of proof is simply a terrible idea. Leave it to your consumers to determine.
Get Industry Certifications
Getting certified by an organization like theU.S. Hemp Authority is a great way to show your customers that you’re one of the responsible companies.
Conclusion
Self-regulation really just means taking a few basic steps to establish to both customers and politicians that you’re running a legitimate business which does what it claims to and is socially responsible. It might increase costs in the short-term, but over time and especially as consumer knowledge increases, it will pay off many times over. And the next time there’s a situation like what happened recently in Texas, the industry will have a much easier time defending its practices.
Lee Johnson is a writer at CBD Oracle who has been covering science, vaping, and cannabis for over a decade. He focuses on research-driven deep dives into topics ranging from medical uses for CBD to industry and user statistics, as well as general guides and explainers for consumers. He is a passionate advocate of both CBD and cannabis, and a strong believer in informed choice for consumers.
CBD Oracle is a consumer research company working to improve the safety and transparency of cannabis products, producing in-depth statistics on CBD and cannabis, detailed research pieces and analysis of social and legal issues.
Allied Association Blog: Memories of the Campaign for Prop 215
Scanning my collected newspaper articles from the era for our slideshow has really brought back memories of my early activist days working toward The Compassionate Use Act of 1996, commonly referred to as Prop 215.
The year was 1995…
Those were the days when you had to say “water pipe” not “bong” for fear of being kicked out of a head shop. I once had a pipe shop refuse to carry hemp lip balm citing that it would imply that their pipes were being sold for marijuana use. Even some in the hemp industry were opposed to associating marijuana with hemp. That said, there were supporters of medical marijuana, and some who just needed education.
I was 24 years old and my relationship with the cannabis plant had been purely recreational. Then I made a new friend, Alan Silverman, who introduced me to a community (and career path) that changed my life. He took me to a screening of a new film, “The Hemp Revolution.” It was an eye-opening event with the director in attendance, and notably several Sonoma County businesses selling their industrial hemp wares. I was deeply inspired, not having known the history and multitude of uses of the plant. I joined the hemp industry with the contacts I met that night, distributing their wares to local shops and tabling at festivals and markets. It was more of a public education service than a profitable business, as many were not familiar with the hemp plant and some saw it as an excuse to promote marijuana. I transitioned into a day job with HempWorld, an industry magazine. These were fun years even if we were ahead of our time.
Which comes first?
Alan also told me about a state initiative campaign that was in the planning stages and educated me on the medicinal uses of marijuana. I had previously studied ecology, the idea that our environment has countless symbiotic relationships between lifeforms fascinated me. So, learning about the fiber, oil, and seed of the hemp plant while also gleaning information about medicinal benefits of marijuana just strengthened my impassioned advocacy for both. I felt at the time that consumable marijuana would need to be destigmatized before industrial hemp would ever have a chance.
Allies!
I joined the volunteer group which we at first called “Sonoma County Chapter Californians for Compassionate Use” to match the name of the state-level group behind the current campaign. The term “compassionate use” was not so well known; when I set up our voicemail, the representative thought we were advocating for “Compassionate Youth.”
Being our media liaison, a news reporter from the local TV station called me one morning. The story we had discussed fell through and he asked if there was anything else he could cover. In a few frenzied hours, I was able to find an oncology nurse from a local hospital willing to be interviewed in support of medicinal marijuana. She led me to a medical marijuana patient she knew, who introduced himself to me on the phone by saying, “I’ve been HIV positive for ten years, and I’m fat!” He wanted to be interviewed, too. Enough local activists joined us that afternoon in front of our County Board of Supervisors chambers to fill the camera frame. The nurse requested her interview be conducted apart from the activists, as to not appear a part of our group, which was better optics for our message. She was being brave and outspoken.
We made up small binders with recent news pieces supporting medical marijuana and sent them out to all our local media contacts. We included a commentary published in the Journal of the American Medical Association, an editorial from The Lancet, along with a Universal Press Syndicate piece by William F. Buckley, Jr, and a Cannabis Canada article, “Cannabis Buyers’ Club Flourishes in ‘Frisco,” written by Rose Ann Fuhrman, a fellow local activist and writer. The soon-to-be iconic red cross with overlayed green leaf image was printed for the covers of the binders.
Education was Essential
The cross and leaf image for the movement so effectively portrayed the topic, some of us, while gathering signatures, simply wore 11 x 8.5” signs with this image around our necks to gather attention of potential signers.
All in all, Sonoma County was an easy place to gather signatures on this issue. Rather than approach people individually, I’d stand in a trafficked area and repeat the same spiel, it was along the lines of “Sign the medical marijuana petition, it helps with epilepsy, multiple sclerosis, chemotherapy, glaucoma…” I remember one man who walked right past me into a grocery store parking lot, only to turn around when I verbalized the ailment that affected his family member. Another signer who stood out was attending a concert. He walked up to me in the free speech zone between the parking lot and the venue. Signing his name, he said, “I’m a cop. I’m tired of the hypocrites.”
The local coverage that I was most excited about occurred on Friday, November 1, 1996, four days before the election. Elvy Musikka had been traveling around California speaking in favor of Prop 215. Elvy was interviewed by The Press Democrat newspaper about being one of eight people in the United States who not only could legally smoke marijuana, but also was being provided joints by the federal government. The story ran with a large photo of Elvy smoking a legal joint in my living room. Elvy will be speaking at the Cal NORML conference.
Meeting Dennis
Another inconsistency with what most knew at the time was the existence of the San Francisco Cannabis Buyers’ Club. Founded by Dennis Peron, who also wrote San Francisco’s Prop P, this ground-breaking club was raided by the DEA, but enjoyed great local support. Prop P passed by 80% of San Francisco voters in 1991, basically making marijuana possession and cultivation the lowest priorities for law enforcement. Dennis, who passed away in 2018, is a legend in the world of medical marijuana. I had the unexpected experience of meeting him when Rose Ann and I went to his club to pick up the initiatives for our group to collect signatures. We all had barely begun when informed that the first initiatives had a printing error and needed to be replaced. We had car trouble in the city and Dennis invited us to stay overnight in the club, an historic experience I relish. Dennis will be represented at the 25th Anniversary event via a recorded statement and through his family members, Jeff and Bryan Peron.
It was an exhilarating time for me, I met many truly impressive activists, authors, and businesspeople who were inspired to make the world a better place. I felt I was making the world a better place. Ellen Komp, one of my co-workers from my years with HempWorld, went on to become the Deputy Director for California NORML, she hired me onto the organization in 2017. For the 25th Anniversary of Prop 215 events this week, I will be celebrating with many of the folks who made 215 possible. I hope you’ll join us in honoring the history that launched the modern industry.
Kharla Vezzetti is the Business Membership and Advertising Manager for California NORML, a non-profit, member-supported organization that has been advocating for sensible and fair cannabis laws since 1972. She can be reached at kharla@canorml.org
The PACT Act Final Rule Has Been Released Prohibiting the Mailing of Cannabis/Hemp Vaporization Products. Is Your Business Ready?
By Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy
After months of delay, the United States Postal Service (USPS) has released its FINAL rule enforcing the Prevent All Cigarette Trafficking (PACT) Act, effective October 21, 2021, and unfortunately, they are indeed applying it to cannabis/hemp vaporization products. The PACT Act has now made it extremely difficult for anything related to vaporization to be mailed, either business to business (B2B) or business to consumer (B2C). Your business could be affected even if you are not mailing out products. Although this is a massive burden on the cannabis/hemp vape industry, there are ways to deal with it. NCIA remains vigilant in making sure the federal government understands this unnecessary hardship to the industry, and making sure our members are fully educated on this issue.
What is the PACT Act?
The Prevent All Cigarette Trafficking (PACT) Act went into effect June 29, 2010, applying strict regulations to the mailing and taxation of cigarettes and smokeless tobacco products, effectively banning the mailing of cigarettes unless authorized by an exception. With the rise of e-cigarettes, especially their popularity among youth, Congress decided that vaporization products should be included in those provisions. On December 27, 2020, Congress modified the definition of “cigarettes” to include Electronic Nicotine Delivery Systems (ENDS), broadly defining ENDS to include nearly all vaporization products, regardless if they contain nicotine or are used for nicotine. Specifically:
“(1) any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device; and (2) any component, liquid, part, or accessory of an ENDS, regardless of whether sold separately from the device.”
When the USPS issued their notice of proposed rulemaking, they received more than 15,700 comments, with many expressing frustration with the broad interpretation of ENDS, so the USPS delayed issuing FINAL rules while it considered the practical application to the unique cannabis and hemp industries. NCIA was proud to submit comments with a broad coalition and to issue an action alert to get our members to express their concerns.
In the meantime, the USPS issued a guidance document (“April 2021 Guidance”) (86 FR 20287) to help prepare businesses for the final rule and what documentation will be needed to apply for an exception. The exceptions include:
Intra-Alaska and Intra-Hawaii Mailings: Intrastate shipments within Alaska or Hawaii;
Business/Regulatory Purposes: Shipments between verified and authorized tobacco-industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;
Certain Individuals: Lightweight, non-commercial shipments by adult individuals, limited to 10 shipments per 30-day period;
Consumer Testing: Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes; and
Public Health: Limited shipments of cigarettes by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
18 U.S.C. 1716E(b)(2)-(6). These exceptions are the ONLY way to mail these products moving forward. Unfortunately, the USPS was not accepting applications for exceptions until the final rule was published, but now that it has been published, it is time to apply for an exception.
FedEx and UPS have already banned delivering these products, so they are out as an alternative.
How can it affect me?
If you manufacture, sell, or buy vapor products, you will be affected. Manufacturers and distributors who use the mail to get their products to stores for resale (B2B) will have to apply for an exception through the USPS Pricing and Classification Service Center. If you are a business receiving these products, you will have to work with the business that mails it to you to be included in their exception as a recipient. If you are a retailer who delivers vaporization products to consumers via the mail, such as online retailers (B2C), you will also need to apply for an exception. If you buy the end products as a consumer, expect an increase in price because of the extra costs placed on the suppliers.
What should I do?
If your business has ANYTHING to do with the manufacture, delivery by mail, or retail of cannabis/hemp vaporization products, including liquids, batteries, empty cartridges, etc., you should get familiar with this final rule that is in effect as of October 21, 2021. The USPS spends the time addressing potential issues or suggestions from the comments it received, so any questions of why they did something are probably answered there.
You will also want to read the guidance document the USPS issued in the Spring that details if you qualify for an exception and how to apply for it. This will require cooperation between the mailer and the recipient, so make sure you are working with your supplier/retailer to get all the necessary information.
What is NCIA doing?
NCIA remains committed to making sure our members understand all of the legal ramifications and how to continue operations despite this rule. We continue to work with our coalition partners to better understand the effects and best practices, and will share with you as much information as possible to ease the transition via blog posts and webinars.
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
On the latest episode, Bethany discusses the millions of dollars the cannabis industry is losing each year to moisture, an update on cannabis policy reform in D.C. as the federal government acts on other issues, an upcoming Fireside Chat Webinar with our Government Relations Team on environmental sustainability, and more.
Registration to the Cannabis Business Summit in San Francisco is now open with special limited-time super early bird pricing on tickets available, head to our website for more information today.
Member Blog: Evaporation is Costing the Cannabis Industry Millions. Here’s Everything You Need to Know.
As cannabis ages, many of its therapeutic components degrade and transform into less effective compounds. Here’s everything you need to know about cannabis degradation, how the compounds are affected, and a few ways to restore products that have seen better days.
How long do cannabis and hemp buds stay fresh?
Cannabis is made up of various naturally occurring chemical compounds, including cannabinoids, terpenes, flavonoids, lipids, and fibers. Just like all organic materials, these components break down and degrade over time.
Think about your favorite fruits. Fresh oranges for example, will eventually rot as they age and their molecular compounds break down. When exposed to light, their outer layers start to spoil in a process known as photodegradation that causes discoloration and loss of flavor, vitamins, and proteins.
Further enzymatic chemical reactions occur and transform water, vitamins, and other molecules into different formations that can degrade even further with added heat or moisture loss. The oranges will lose their zesty aroma, sweet flavor and will be more susceptible to microbes, which will eventually cause the fruit to spoil. That said, dried fruits can be stored in a pantry for much longer before they’re no longer safe to eat as the “conditioning” or “curing” process can make them shelf-stable for up to a year.
Like dried fruits, cannabis and hemp undergo a curing process that helps to equalize the moisture content among the buds. This process reduces the risk of mold and spoilage while keeping the flower fresh, flavorful, and potent. Following this process correctly can keep cannabis and hemp flower “fresh” for 3-6 months or longer if stored properly. However, even with the most disciplined processes and practitioners, eventually, all organic materials begin to break down from exposure to the elements.
Much like our dried oranges example above, cannabis and hemp stored in suboptimal conditions are more susceptible to “rot” and can lose everything that makes them special. Light and temperature can contribute to the degradation of these natural features, but the biggest factor in terpene degradation is moisture content – or the lack of it. Moisture helps to preserve these compounds for prolonged periods of time.
What happens to the terpene profile and moisture content of cannabis and hemp over time?
On average, 12% of all cannabis and hemp biomass is moisture. As that moisture evaporates, it takes valuable terpenes and other essential oils with it leading to dry and brittle plant matter. Terpenes are naturally occurring chemical compounds found in plants that are responsible for their unique aromas and flavors. They also add and help preserve moisture. Cannabis and hemp contain an unparalleled profile of 100+ different terpene isolates that all evaporate at different rates based on temperature and humidity.
While live terpenes smell most potent during the flowering phase, terpene degradation starts immediately after the buds are cut from the stem. This happens because terpene oils, especially the most pleasant ones found in tiny amounts, tend to have low-temperature tolerance thresholds and evaporation levels. Once these terpenes have evaporated they will not be replaced by the living plant after cutting. This is why curing and storage is so important post-harvest. The curing stage allows for the terpene profile to mature but, even during this process terpene potency will continue to weaken.
When flower is stored below 50-55% RH (Relative Humidity) it leads to the fragile cannabinoid and terpene-rich trichomes to become brittle and break off. This lowers potency and causes the terpenes to evaporate with the remaining moisture content. The longer cannabis and hemp are stored in these conditions, the less potent, flavorful, and aromatic they become. On the other hand, going over 65% RH is in the danger zone of where mold can thrive and wreck a harvest with bona fide rot.
Who is affected by terpene and moisture degradation?
In short, terpene degradation affects everyone. Growers see the most significant profit loss as evaporation can take pounds and pounds of cannabis away from their final numbers in as little as 14 days. Dispensaries also see a loss of profit as the flowers dry during transit and while sitting on the shelf, making it so that they paid for more than what they actually ended up selling to their customers.
In the end, consumers are eventually the ones left holding the bag. Not only is the flower at its highest degradation stage by the time it gets into their hands but loss in weight can turn a pre-packaged 3.5g eighth into 3.15 grams or less.
The example in the graphic below outlines how moisture degradation affects both yields and profit.
How can you stop your cannabis from drying out?
Using orange peels and pieces of bread for rehydration used to be the norm in what feels like ages ago. In the more recent past, cultivators, dispensaries, and consumers alike have relied heavily on moisture-control products like Boveda brand or Boost brand humidity packs. These products can help to keep moisture in the 50-65% optimal range. However, they do have their drawbacks.
The humidity packs have a definite shelf life and in extremely dry conditions, they can’t keep up with the rate of evaporation – almost to the point where many claim they don’t actually work. While they can help maintain some moisture content, they can’t rehydrate buds that have gone below the 50% humidity threshold. This makes them closer to a moisture stabilizer of sorts than a moisture booster or replenisher. Beyond using the aforementioned “ancient ways” to rehydrate abused cannabis flower, these packs have been the only option available to the industry.
However, recently a new product on the market called the “Cure-Egg” has been making waves and has been proving invaluable when it comes to product reclamation and preservation. The Cure-Egg’s patented ergonomic design and utility works in a similar way to the hydration packs but boasts the ability to rapidly rehydrate biomass in a few days’ time while staying under the mold growth threshold.
In addition to its ability to quickly rehydrate cannabis and hemp flower it also comes with the added benefit of terpene infusion to counteract terpene loss. Oftentimes beautiful-looking flower is grown but it somehow misses the mark when it comes to the nose. This product could be a game-changer for farms, dispensaries or anyone sitting on older product that has lost its zing from prolonged storage or errors in production.
Users are quickly finding out that they can take less than premium flower destined for the world of “affordable pre-rolls” and easily turn them into a flavor and aroma-packed desirable product that doesn’t have to come at a discounted price. Time will tell if this product will become the next industry staple but one thing is for certain, innovative new products are definitely shaking things up.
Peak Supply Co provides the first true all in one solution providing terpenes, vape cartridges, package design and production, helping clients progress from starting creative to finished product.
Take A Survey: U.S. Cannabis Industry Sentiment and Business Conditions
NCIA chief economist and his cannabis economics firm, Whitney Economics, are collaborating with NCIA to conduct a national survey of businesses and stakeholders in the U.S. cannabis industry. Below, please find a link to the Survey of U.S. Cannabis Industry Sentiment and Business Conditions. It examines the key issues facing the industry including what you are experiencing when doing business in the industry. The survey seeks to investigate what is working and what can be improved from the perspective of businesses and stakeholders in the cannabis industry.
The goal of the survey is to tabulate ancillary business and cannabis operator opinions on the state of the U.S. cannabis market. Responses are confidential and will be kept anonymous.
Your participation and insights will help policymakers understand the issues that face the industry from your perspective. The survey takes between 4–5 minutes to complete. Please complete the survey by Sunday, October 31.
What would it take for cannabis to become a commodity? To answer this question, we must first understand what a commodity is. Commodities are often raw materials, such as mineral ores, petroleum, sugar, rice, corn, wheat, etc., traded in large quantities, with little restriction, with prices fluctuating based on supply and demand. These commodities are often traded on exchanges to facilitate transactions, as price and availability are the main factors, not product differentiation or branding. Thus, standardization of the commodity and minimum quality standards are essential to commoditization. Currently in the EU and UK, hemp raw materials and finished goods must be compliant with the Novel Food Regime to be sold. To be compliant, manufacturers must apply for Novel Food status which will then be approved by the Food Standards Agency. This is a perfect example of standardization beginning to take place. However, globally, there are ~800 recognized strains of cannabis, although realistically, that number is likely in the thousands. This is in comparison to most commodity markets which usually have less than a dozen different variations. We can break this down into three main sub-sectors: industrial hemp, medical cannabis, and adult-use cannabis, and the challenges to commoditization for each.
Industrial hemp is cultivated primarily for its seeds or fibers to make clothing, paper, biodegradable plastic, building materials, etc. Most CBD extracts also come from industrial hemp, so the hemp farmers can potentially be seen as commodity producers while the buyers, who then use the CBD extracts to produce their differentiated products, are not. However, one major issue is the lack of price stability and transparency for differentiation seen in other commodities. In the United States, prices for high-CBD cannabis biomass declined up to two-thirds in value in 2020 compared to the previous year.
Medical cannabis, which can be over the counter or pharma-grade, has various medical applications, some still yet to be discovered. On the pharma side, GW Pharma has the only cannabis drug that has been approved by the FDA, which treats different types of epilepsy. Cannabis is also being researched for its effectiveness in treating Alzheimer’s, cancer, eating disorders, mental health disorders, seizures, and many more. However, firms focused on medical cannabis often attempt to produce products with specific ratios of THC and CBD through crossbreeding and generating unique terpene profiles. However, for a company to develop pharma-grade products, the product must meet the minimum standards required by its prospective country. These are usually for a particular type of treatment, making commoditization difficult.
Adult-use cannabis has seen tremendous growth and legalization in the past years; however, products differ between producers. While there are thousands of strains of cannabis, even the same strain can vary widely between producers depending on cultivation methods and conditions. Naturally occurring terpenes also allow for differentiation. It can come in a wide range of different potencies, even due to farming techniques, thus making it challenging to produce premium quality cannabis at scale consistently. At the same time, countries are beginning to implement minimum requirements for its products, like the EU and UK’s Novel Food Regime explained above. As countries continue implementing these requirements, the ability to differentiate products will decrease.
As you can see, the most likely to be commoditized would be industrial hemp, as standardization would be a massive obstacle for both recreational and medical cannabis. However, other factors need to be resolved before cannabis can reach commodity status, including price transparency and legalization. There are benchmark prices for commodity products that are easily accessible, and currently, a platform to publish these benchmark prices has not been fully developed yet. Regarding legalization, in the US, cannabis with a THC content over 0.3% remains federally illegal, despite individual states allowing growth, processing, and sale. Multi-state operators cannot transport THC products across state lines, preventing the national distribution of branded products. The problem with interstate commerce would disappear when cannabis becomes federally legal, but it is currently a challenge and simply put, for now, a surplus in California stays in California.
While there are still many hurdles for cannabis to become a commodity, many tailwinds could lead to its successful commoditization. Federal legalization in the U.S. would likely remove restrictions in transactions, allowing for the free trade of cannabis within the country. On a global scale, the real barrier to global trade centers around the United Nations Drug Treaty. In December 2020, the U.N. Commission on Narcotic Drugs transferred cannabis from a Schedule 4 to a Schedule 1 drug. Schedule 1 drugs are still prohibited substances but are seen as having medicinal value. For cannabis to trade freely, the United Nations must move cannabis to a U.N. Schedule II or III drug. This is because countries must be compliant with the 1961 U.N. Convention to import and export cannabis, which requires a narcotic license. Additionally, once regulators such as the FDA come out with specific rules, CBD will begin to act more like a commodity with significant supply and demand. One World Pharma, The Cannabis Mercantile Trading Exchange (CMTREX), Panexchange, and Canxchange have begun developing exchanges for cannabis to trade on, with One World Pharma even beginning to offer limited futures contracts. On the positive side, cannabis has a head start in testing to meet minimum quality standards. Most jurisdictions already require it, although the threshold levels needed to sell the product still vary between locations. The regulations between different countries vary greatly, as countries in South America and places like Canada and Israel are very open to cannabis. However, in others, such as most EU and Asian nations, there is still a lot of stigma surrounding cannabis, which will likely take much longer to gain widespread acceptance. While there are still many hurdles to cross until commoditization, the current Biden administration has shown a willingness to legalize cannabis federally, the first and most crucial step towards cannabis becoming a commodity.
Ms. Della Mora is the Co-founder ofBLC, a financial advisory and investment firm based in Los Angeles with satellite offices in Houston, New York, London, Hong Kong, and Melbourne. During her tenure at BLC, she successfully invested, assisted in the capitalization, and helped business develop small cap oil companies in Kentucky, Texas, Louisiana, Illinois, Colorado, California, Wyoming, North Dakota, and Alaska. She has also structured oil & gas partnerships in several U.S. states, and in Ecuador, Central America. Ms. Della Mora has been involved in many LNG (Liquid to Natural Gas) projects in the U.S., as well as many commodity trades worldwide. She has personally advised also Chinese conglomerates in their U.S. oil & gas investments.
Black Legend Capital is a leading Merger & Acquisition boutique advisory firm based in California with offices worldwide. Black Legend Capital was founded in 2011 by former senior investment bankers from Merrill Lynch and Duff & Phelps. We provide M&A advisory services, structured financing, and valuation services primarily in the cannabis, technology, healthcare, and consumer products industries. Black Legend Capital’s partners have extensive advisory experience in structuring deals across Asia-Pacific, Europe, and North America.
Video: NCIA Today – August 20, 2021
Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
FDA Punts on Regulating CBD Again
by Morgan Fox, NCIA’s Director of Media Relations
Last week, the hemp and CBD industries took another blow from the Food and Drug Administration when the agency refused to grant a request from prominent CBD producer Charlotte’s Web to regulate the substance as a dietary supplement. This is the latest in a series of delays and setbacks on the part of the FDA when it comes to regulating hemp-derived cannabinoids and products since they became technically legal at the federal level under the 2018 Farm Bill.
Bloombergreports: “The company’s bid to sell its full-spectrum hemp extract with CBD as a dietary supplement won’t be considered because of the FDA’s own prior decision to treat CBD as a drug, according to a letter posted on the agency’s website Wednesday. This shouldn’t disrupt the business of Charlotte’s Web or prevent other companies from continuing to sell such products, which already exist in a gray area without the agency’s oversight. The decision shows the agency’s ongoing hesitancy to regulate cannabidiol, the non-psychoactive ingredient in cannabis plants better known as CBD… The FDA’s objection rested in part on its prior approval of Epidiolex, a CBD drug to reduce seizures, which the agency said precludes it from authorizing CBD for dietary purposes. Even if the drug hadn’t been approved, though, the FDA said in the letter to Charlotte’s Web dated July 23 that it “has concerns about the adequacy of safety evidence” that the company submitted.”
This position is likely to create serious problems for the CBD industry. Without allowing CBD products to be regulated as dietary supplements or food additives, the FDA will be forcing producers to get federal approval for their products under the Investigational New Drug program. This process can often take years and cost applicants millions of dollars.
This casts even more doubt on what the future of the CBD market will look like as producers continue to operate in an uncertain landscape. The legality of CBD combined with the lack of federal regulations has created a lot of opportunities for responsible producers to bring products to market without dealing with the often overly strict state cannabis programs, but it has also opened the door to irresponsible operators who have been accused of actions from making misleading or unsubstantiated health claims to selling mislabeled or adulterated products.
Furthermore, the lack of federal regulations has discouraged many larger retailers from selling CBD or hemp-derived products altogether, drastically limiting the market options for producers. Some industry insiders have theorized that lack of access to those retailers has directly led to some producers desperately searching for ways to unload their excess CBD, including processing it into unregulated Delta 8 THC and flooding the markets in both legal and prohibition states, creating concerns among regulators, lawmakers, licensed cannabis operators, and consumers.
This troubling news follows on the heels of another memo issued by the Farm Credit that suggests that financial institutions that provide financing to hemp businesses should only do so if the company is operating under the auspices of a USDA-approved state hemp program.
“While many states and federally recognized tribes have since submitted those plans, 20 states are still operating under an earlier provision: a hemp pilot program created by the 2014 Farm Bill. That program, which is still valid and would befurther extended under pending legislation that has passed the House and is pending in the Senate, requires less federal oversight than the new USDA-approved programs,” Marijuana Momentreports.
Some in the industry are concerned that the memo will lead to lenders dropping their hemp clients operating under the pilot programs, but others have suggested that it will not have a significant impact on the lenders who are already working with hemp businesses given the amount of reporting that they must already complete for the federal government and the lack of federal prosecutions for doing so historically.
It seems pretty clear by this point that the FDA will not move forward with regulating CBD in a timely and reasonable manner without outside pressure. You can add your voice to the chorus calling for sensible CBD regulations by visiting RegulateCBDNow and urging Congress to take action.
Committee Blog: Safety – Terpene Limits in Cannabis Manufacturing
by NCIA’s Cannabis Manufacturing Committee
From the taste of your fruits and vegetables to the aroma that travels from trees and flowers in bloom, terpenes are the organic compounds that play a vital role in the flavors and smells we experience daily. Terpenes are common ingredients that are used in many industries such as food, cosmetics, tobacco, and pharmaceuticals. Therefore, the information on the safety of terpenes in these industries can be used for determining the safe use of terpenes in a wide range of product applications.
Terpenes are currently being introduced into a variety of adult-use and medical cannabis preparations across the U.S. and hemp-CBD markets around the world for both flavor and functional purposes. Much research has been and still is being conducted on the therapeutic effects of terpenes and their synergistic effects when used in conjunction with cannabinoids. The strong research background supports the benefits of infusing terpenes into cannabis extracts, both in reference to endogenous terpenes found naturally in the plant and those terpenes that have been added back into preparations from other botanical sources. Therefore, almost every manufactured cannabis product contains a percentage of terpenes. However, the clear lack of understanding of the full potential of the terpene profiles, and misuse of these volatile, fragile compounds bring up various misconceptions regarding terpene safety versus their efficacy in creating an elevated user experience.
As terpenes make a significant contribution to the quality of cannabis products, which varies from one consumption method to the other, it is highly important to utilize the most advanced knowledge regarding terpenes in order to maximize their potential while maintaining product safety.
Inhalation
Bioavailability
Terpenes are a naturally occurring constituent in resin cannabis extracts. Terpenes have been incorporated into vaporizable formulations in the form of pre-filled cartridges. These terpene formulations are designed to produce specific effects based on the creator’s intentions, or the terpenes are simply reintroduced to mimic the source material since the extracts are often refined to the point that they have little or no taste (i.e., lost their original essence).
Inhalation of these volatile molecules leads to quick absorption of the compounds via the lungs and directly into the bloodstream. The high solubility of monoterpenes in the blood and hydrophobic medium suggests a high respiratory uptake and accumulation in fat tissues (Falk 1990a). This was confirmed by recent studies of uptake and elimination of a-pinene and 3-carene in humans (Falk 1990b, Falk 1991b). The bioavailability range via inhalation of alpha pinene, camphor and menthol has been studied and reported to be 54-76% (Kohlert 2000) which is relatively high compared to oral bioavailability. Therefore, terpenes via inhalation are an efficient route of administration which allows low dosage of terpenes.
General Guidelines
When examining terpene infusion, the points below should be taken into consideration:
From accumulated knowledge within the cannabis industry and considering terpenes’ natural ratios in cannabis (1 – 5%) and data on safety, it is suggested not to exceed a concentration of 10% in the final product.
As terpenes are volatile molecules, the final terpene-infused product is recommended to be used only with adjustable temperature vaporizers such that the oil will not be heated to high temperatures to prevent unnecessary heat-derived toxin production.
Aerosol testing for the final product is recommended to test for heavy metals leaching into the vaporizable product.
Terpenes are recommended to be used within their defined expiration date labeled on the suppliers’ bottle. The final vaporizable product must be tested in a certified lab under the requirements of the authority having jurisdiction to make sure it meets all quality and regulatory requirements.
Terpene Limits
By using position papers such as the ANEC Position Paper on E-cigarettes and e-liquids, suggestions regarding terpene limits can be made for cannabis inhalable products. It is important to mention that the final decision on added terpene amounts and determination of product safety is the sole responsibility of the manufacturer based on their assessments, internal procedures, and local regulations.
The following numbers are the suggested infusion percentage of specific terpenes in E-liquid. This suggestion was calculated by using DNEL (Derived No Effect Level) levels in inhalation as well as frequency of puffs a day.
On average, E-liquid users take 500 puffs a day (ANEC position paper), whereas cannabis users take around 9 puffs a day. Therefore, the suggested terpene limit percentage in cannabis inhalables may be higher than E-liquid due to the lower daily usage.
Substance
Suggested Terpene Limit in E-liquid According to ANEC
Linalool
0.34%
Menthol
7.8%
Beta Pinene
0.7%
Alpha-Terpineol
1.1%
Geranyl Acetate
7.4%
Carvone
0.14%
Ingestion
Bioavailability
Terpene presence in foods of plant origin and in herbs with functional properties has led to further exploration of their bioavailability following oral consumption. The research on terpenes’ bioavailability is commonly done through medicinal plants since they are subjected to digestion within the mouth and stomach before accessing the small intestine. Bioavailability through oral ingestion is affected by mechanical actions, enzymatic actions, and different pH conditions, Transformations into usually more water-soluble and more readily excreted in the urine compounds affect this process as well. These transformations appear mainly in the liver, but also in the gastrointestinal tissue, lungs, kidneys, brain, and blood (Furtado 2017) Several studies have shown that terpenes consumed orally are absorbed through the gastrointestinal tract and are bioavailable as soon as 0.5 h after intake, reaching their peaks between 2 and 4 h (Furtado 2017, Papada 2018).
General guidelines
Terpenes are commonly used as flavor ingredients and their usage guidelines are clear when used in foods, such as the FEMA values table below. However, when terpenes are used for therapeutic purposes, the suggested dose in food is not fully researched, and the balance between flavor and functionality is still yet to be determined. Basing the dosing according to flavor guidelines is a good place to start. Upper limits should be defined by safety limits such as the DNEL values table found below. It is important to use natural, Food Grade terpenes that are backed up with certificates of analysis and are safe to ingest.
Terpene Limits
The Flavor and Extract Manufacturers Association of the United States (FEMA) has developed an innovative program utilizing the GRAS concept to evaluate the safety of flavoring substances. The FEMA GRAS program began in 1959 with a survey of the flavor industry to identify flavor ingredients then in use and to provide estimates of the amounts of these substances used to manufacture flavors. This database provides information on all ingredients that have been determined to be “generally recognized as safe” under conditions of intended use as flavor ingredients. According to The FEMA GRAS assessment – aromatic terpenes used as flavor ingredients are ubiquitous throughout the food chain; and therefore, not surprising that they serve as effective flavoring ingredients.
The below table presents the average maximum usage levels of terpenes used as flavors in several product types as provided by FEMA.
Product
Lime Terpenes
Average Max (ppm)
Orange Terpenes
Average Max (ppm)
Grapefruit Terpenes
Average Max (ppm)
Limonene Average Max (ppm)
Myrcene Average Max (ppm)
Linalool Average Max (ppm)
Beverages, Nonalcoholic
750
1,550
500
31
4.4
7
Beverages, Alcoholic
1,000
1,000
1,000
NA
NA
50
Chewing Gum
20,000
20,000
20,000
2300
NA
200
Hard Candy
5,000
5,000
5,000
49
13
400
Soft Candy
5,000
5,000
5,000
NA
NA
10
ppm is an abbreviation for “parts per million” and it also can be expressed as milligrams per liter (mg/L) or in a percentage where 10,000 ppm is 1%. For example, the maximum suggested infusion for orange terpenes in chewing gum is 2%, where the suggested infusion in hard candy is 0.5%.
*Point of thought*: Since terpenes in the cannabis industry are mostly infused in cannabis-based products, the frequency of usage of such products is lower than regular food products.
Additional safety data can be gathered from reviewing reports from governmental agencies such as European Chemicals Agency (ECHA). The following data about the DNEL (Derived No Effect Level) in the category of General Population was collected from ECHA website. These numbers may be used as a guideline for maximum daily intake via oral administration:
Substance
DNEL (Derived No Effect Level)
Calculated Daily DNEL for 70kg subject (mg/day)
Linalool
0.2 mg/kg bw/day
14
Menthol
4.7 mg/kg bw/day
329
Beta Pinene
0.3 mg/kg bw/day
21
Alpha-Terpineol
no hazard identified
no hazard identified
Geranyl Acetate
8.9 mg/kg bw/day
623
Carvone
69.4 µg/kg bw/day
4,858
For example, a 70 kg person consumes a 1g cookie that is infused with 1% Pineapple Express terpene formulation and Linalool constitutes 10% of the formulation, then there will be overall 10mg of terpene formulation in the cookie, out of the 10mg there is 0.1mg of Linalool which doesn’t exceed the DNEL level.
Topical
Bioavailability
Terpenes are lipophilic, small, and nonpolar molecules that are considered to be the largest group of natural fragrances. Terpenes can easily penetrate the skin and enhance transdermal delivery (Aqil 2007) and can potentially aid cannabinoid transdermal delivery. Terpenes are also known to have several dermal benefits including anti-inflammatory (Maurya 2014), wound healing (d’Alessio 2014) and anti-acne (Yuangang 2010). Terpene bioavailability via transdermal delivery ranges between 3-12% depending on the type of terpene, medium and application (Brain 2007, Gilpin 2010). Following topical application, maximum plasma levels of terpenes are reached within 10 minutes (Kohlert 2000).
General guidelines
While some terpenes are known as dermal irritants, the severity of the irritation may depend on their concentration. These should not be used on any inflammatory or allergic skin condition and should always be appropriately diluted. The oxidation of terpenes can increase risk of causing skin reactions because the oxides and peroxides formed are more reactive. This can be seen with (+)-limonene, δ-3-carene and α-pinene and arise due to the formation of oxidation products, some of which are more sensitizing than the parent compound. For this reason, proper storage of terpenes is required to preserve their effectiveness and decrease the risk of adverse reactions.
The table below lists commonly known allergenic terpenes, and for this reason, should be declared on the packaging or in the information leaflet if the concentration of these allergenic fragrances is higher than the permissible concentration of 0.01% in shower gels and baths (rinse-off products) and higher than 0.001% in body oils, massage oils and creams (leave-on products)
Allergenic Terpenes
Citral
Citronellol
Eugenol
Farnesol
Geraniol
Isoeugenol
D-Limonene
Linalool
Terpene Limits
The International Fragrance Association (IFRA) defines which compounds represent a potential allergy risk and determines their maximum concentration to produce safe cosmetic products. IFRA also issues recommendations for the safe use of fragrance ingredients, which are published in the IFRA Code of Practice and its guidelines. In the below table, there can be found specific infusion recommendations for specific terpenes.
Substance Name
Restriction Limits in the Finished Product (%) according to IFRA:
Lip Products
Body Lotion, Cream & Oils
Hand Sanitizer & Hand Cream
Body Wash
Citronellol
2.20%
12.00%
3.20%
24.00%
Citral
0.11%
0.60%
0.15%
1.20%
Farnesol
0.21%
1.20%
0.29%
2.30%
Eugenol
0.45%
2.50%
0.64%
4.90%
Geraniol
0.85%
4.70%
1.20%
9.20%
Alpha Bisabolol
0.42%
2.40%
0.60%
4.60%
Testing of terpenes in dermal products can be achieved safely by making a sample product with terpene formulation infused at 0.5% to 5% concentrations in petrolatum. Patch testing can be a useful technique to detect and avoid skin reactions.
House Rules Committee Weighs In On Cannabis Appropriations Amendments
By Morgan Fox, NCIA’s Director of Media Relations
The process of approving the federal budget is moving full steam ahead, with the House Rules Committee considering several amendments related to cannabis to a series of funding bills this week. Amendments that pass this committee move on to a full vote on the House floor.
In terms of overall cannabis policy reform, the most prominent amendment is one that would prevent the Department of Justice from using funds to interfere with state adult-use and medical cannabis programs or target people and businesses that are in compliance with state cannabis laws. This amendment was offered by bipartisan congressional cannabis champions Reps. Earl Blumenauer (D-OR), Tom McClintock (R-CA), Eleanor Holmes Norton (D-DC) and Barbara Lee (D-CA). The amendment was ruled in order Wednesday and will proceed to a vote, possibly as soon as this week.
Even though the DOJ has generally been respecting state cannabis laws in recent years, passage of this amendment in the final federal budget would add the force of law to that policy for the next fiscal year, providing peace of mind for tens of thousands of regulated cannabis businesses and millions of consumers across the country. This would also add significant momentum to congressional efforts to remove cannabis from the schedule of controlled substances and regulate it at the federal level in separate stand-alone legislation.
Provisions to prevent the DOJ solely from targeting state-legal medical cannabis programs and providers have been approved by Congress every year since 2014. With public support for medical cannabis at roughly 90%, these protections have become mostly a non-issue in Congress and have been included in the original base language of the relevant House appropriations bills since 2019.
The amendment extending those protections to state adult-use programs was approved by the House in the budget votes in 2019 and 2020. Unfortunately, it did not receive the same support in the Senate and was not included in the final funding packages approved by the previous Congress.
An amendment that would remove the renewal of medical cannabis program protections from this legislation, flying in the face of long-supported policy and unnecessarily taking up lawmakers’ time, was also introduced by Rep. Doug LaMalfa (R-CA) and ruled in order.
Rep. LaMalfa, a staunch prohibitionist, has also introduced several amendments to appropriations bills to increase DEA funding for eradication efforts. He made headlines recently when his office released videos of him joining law enforcement in bulldozing outdoor cultivation sites in Siskiyou County, California while grandstanding for the camera and ripping off quotes from the film Apocalypse Now. These sites were located in primarily Hmong communities, a Southeast Asian ethnic diaspora that alleges that the county has prevented its members from obtaining cannabis licenses and prevented water shipments to their communities with serious harm to the quality of life there. LaMalfa’s behavior in these videos is particularly offensive given that many Hmong fled their homes to settle in the United States during and following the Vietnam War after facing persecution for supporting America in that conflict.
Unfortunately, some positive cannabis amendments were ruled out of order by the committee this week and will not be voted upon in this legislation. Delegate Norton offered a pair of provisions that would have prevented the Dept. of Housing and Urban Development from using funds to punish residents of federally assisted housing for state-legal cannabis use in adult-use and medical states, respectively. These reforms are incredibly important, as people living in federal housing can be and are frequently evicted from their homes if they or anyone in their household exercises their legal rights or uses the medicine that works best for them. This leaves many people with no place to legally use cannabis, leading to increased public consumption in low-income communities and continued racial disparities in arrests and citations.
On the positive side, an amendment from Rep. Kurt Schrader (D-OR) to highlight the need for the Food and Drug Administration to establish regulations for CBD products was also ruled in order and approved.
Last week, another bad amendment, introduced by Rep. Debbie Lesko (R-AZ), to remove language from the original legislation that would allow federal funding for universities that are conducting cannabis research was ruled in order but voted down in the House.
The House appropriations bills have a broad range of other cannabis provisions related to topics like banking reform, research, law enforcement funding and grant programs, federal employment guidelines, and allowing the District of Columbia to finally regulate cannabis after it was legalized by voters in 2014. We’ll get into these in more detail in the coming weeks as we get closer to a full vote in the House. Stay tuned!
Member Blog: Why Cannabis Accessories are the Future of Corporate Gifting
Cannabis, CBD, and hemp companies are giving out cannabis-themed promotional gifts – but they’re not the only companies to follow this trend.
The stigma against cannabis is slowly disintegrating. And the more mainstream cannabis gets, the more companies are establishing themselves as open-minded and unique by using cannabis as a part of their marketing and business strategy.
A decade ago, cannabis and hemp were still niche topics. Few people outside the industry could’ve predicted that we’d now be living in a world where cannabis was so widely accepted. CBD can now be found in most health stores, there’s bipartisan support for cannabis legalization, and the world’s biggest celebrities have their own CBD and cannabis lines.
While we still have a long way to go in terms of breaking down stigma and advocating for reasonable cannabis laws, it’s clear that we’re getting somewhere. One thing that demonstrates this is the fact that many companies are aligning their brands with cannabis – even those that aren’t in the industry.
CBD, in particular, is gaining more mainstream interest. This popularity is partly because CBD is non-intoxicating and doesn’t carry the same level of stigma. As a result, health stores and pharmacies -– including chains like Walgreens and CVS – are selling CBD. Even Sephora, one of the U.S.’s most popular beauty stores, now stocks CBD-infused skincare products.
It’s not just huge corporate businesses that are embracing cannabis: smaller businesses are, too. At-home beauty spas use CBD-enriched serums. Local health stores stock CBD oil. Little bakeries are offering edibles. Small clothing companies are creating sustainable garments using hemp. While this proximity to cannabis might’ve been shunned years ago, these businesses are now simply keeping up with demands, staying on-trend, and experimenting with the now well-known benefits of cannabinoids.
It’s clear that, as our society moves away from cannabis stigma, cannabis is becoming a signifier for open-mindedness. Brands that embrace cannabis, CBD, and hemp products show that they’re in touch with the latest trends and informed about the science-backed benefits of these products. This establishes those companies as modern, progressive, and youthful.
As a branded merchandise company, we know that corporate gifts, promotional items, and branded apparel say a lot about a company. When someone orders branded goods for their business, they choose items that align with their business’s values, brand, and target market.
Just as with regular gifting, corporate gifting says a great deal about the giver. When you give someone a gift, they’ll think of you whenever they see or use it. The same goes with corporate gifting and branded items: companies give out items that they want us to associate with their brand. If you want to know how a company sees itself, take a look at what they’re willing to put their name on.
As such, branding merchandise companies, like our own, have access to interesting insights. We can tell what’s trending based on what the most innovative and exciting brands are gifting their clients, staff, and partners. Gift-giving is something of a litmus test when it comes to industry trends.
And what’s trending now is cannabis. More and more companies – including those outside of the industry – are excited to put their names on cannabis-related items, such as grinders, storage products, and rolling papers.
When we decided to establish a category for our cannabis-specific merchandise, we expected cannabis companies to be our main clients. We didn’t expect companies outside the industry to be interested in those same items, but we were wrong.
It seems to be that more and more brands want to align themselves with the cannabis industry, even when they don’t directly offer cannabis-related goods or services. Edgy new clothing companies and innovative start-ups alike might use cannabis-specific promotional items to show that they’re forward-thinking companies that rebel against outdated, traditional concepts.
The other side of gifting is that you expect the recipient to actually use their gift. This is why time-tested promotional items, such as branded pens and tote bags, continue to be brand favorites. The more often someone uses your gift, the more likely they are to think positively of you, so it makes sense to choose functional items instead of white elephants.
In the same way, the popularity of branded cannabis accessories is a reflection of how widespread and accepted cannabis use is. Nowadays, cannabis use is tolerated more than ever before, and CBD is a household name. Companies that use cannabis-related promotional items are saying something about their target market: their intended audience is cool with cannabis.
Two decades ago, young starlets who were “caught” using cannabis were the subject of scandal. This year, Academy Awards nominees were given a compensatory gift bag that included luxury cannabis vaporizers. Part of the assumption of giving gifts here is that people will be excited to use what they receive, and the exact same principle applies to promotional items.
Up until recently, you’d never have seen CBD-infused items on a Mother’s Day gift guide. But in 2021, the world’s approach to cannabis and hemp is far more permissive, especially since more people are now informed about the potential health benefits of cannabinoids. We’re at the point where cannabis and CBD items aren’t just something you’d buy yourself: you can gift it to others because you think they’ll like it, too.
In many ways, corporate gifting and promotional merchandise can tell us a lot about branding trends. The growing popularity of cannabis-specific branded items is a reflection of how society is becoming more and more tolerant of – and excited about – using cannabis, hemp, and CBD.
The fact that this once-disparaged plant is slowly being embraced by individuals and businesses alike is encouraging. It shows us that the stigma is slowly fading away – a sign that the industry is slowly gaining more and more support.
Dan Broudy is the CEO of rushIMPRINT, a marketing supply chain firm providing products and programs that stimulate sales, motivate employees, and strengthen corporate identity. rushIMPRINT serves companies and organizations throughout the USA and Canada.
As a finance and marketing expert with over 20 years of experience in the industry, Dan realizes the importance of having a recognizable brand. That is why he takes great pride in providing cost-efficient branded solutions using state-of-the-art technology. rushIMPRINT creates branded merchandise for the cannabis industry, such as grinders, storage solutions, rolling papers, personalized lighters and more – a unique offering for a growing industry. In addition, rushIMPRINT offers apparel, promotional products, signage, business cards and brochures to help you grow your business.
His current goal is to partner with dispensaries, distributors, labs, growers, cultivators, and vape shops to help them scale their businesses. Dan is excited to get involved in this revolutionary industry by assisting innovative cannabis and hemp brands.
Dan has an undergraduate degree in Psychology from Washington University in St, Louis. He also holds an MBA in Finance and Marketing obtained from the University of Miami Herbert Business School and is a Certified Franchise Executive (CFE).
Dan’s visionary perspective, enthusiasm, and exceptional organizational skills have earned him opportunities to work with brands such as European Wax Center, Blaze Pizza, TCBY, and Amazing Lash.
Hurry Up And Wait: Descheduling, DEA Licenses, And Other Reform Legislation to Watch
By Morgan Fox, NCIA’s Director of Media Relations
The cannabis world is still eagerly awaiting the introduction of Senate Majority Leader Chuck Schumer’s comprehensive descheduling legislation, but that doesn’t mean things haven’t been moving on the policy front in recent weeks!
First up, the DEA announced that it was finally moving forward with approving applications to cultivate cannabis for research purposes, which would effectively end the federal government’s stranglehold on research production. The agency spent years fending off lawsuits from applicants, who correctly asserted that not only was the monopoly limiting research, but the cannabis being grown at the single licensed facility at the University of Mississippi was basically unusable for research purposes anyway. This announcement comes several years after the DEA publicly stated that it would begin the licensing process. Better late than never.
Next, Sen. Ron Wyden, who is also working closely with Majority Leader Schumer on descheduling along with Sen. Cory Booker, introduced S. 1698 last week. While text of this bill is currently not publicly available, the name suggests that this legislation would direct the FDA to allow hemp-derived CBD, made legal under the 2018 Farm Bill, to be used as a dietary supplement or in food. Some perceive this bill as necessary to get some regulatory clarity from the FDA, which has been dragging its feet and missed several deadlines for CBD regulations. Many in the industry blame this lack of regulation for larger retailers staying out of the CBD market, which has led to massive supply gluts of the substance and has been hypothesized to be a leading cause for the recent boom in Delta 8 THC production.
And earlier this month, Rep. David Joyce, an Ohio Republican who co-chairs the Congressional Cannabis Caucus, introduced a narrowly tailored bill to remove cannabis from the schedule of controlled substances. The bill assigns regulatory responsibilities to the FDA and the Alcohol and Tobacco Tax and Trade Bureau and gives them a one-year deadline to come up with a regulatory structure similar to alcohol. It also contains provisions similar to the protections that exist in the House-approved SAFE Banking Act, calls for studies on how cannabis impacts pain and driving, and improves access for veterans. Notably, this bill does not contain any social equity or restorative justice language.
While the chances of such legislation passing in the Democrat-controlled House are slim, it could serve as a doorway to get fence-sitting Republicans into the debate. It could also be a tool to identify those members of the GOP who are steadfastly opposed to any legalization bill and out of touch with their constituents, many of whom would directly benefit from cannabis policy reforms and who are increasingly in support of ending federal prohibition.
We’re also getting word that the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act is getting reintroduced in the House this week (and may have already been at the time of this publication). This legislation made history last December when it became the first descheduling bill to receive a floor vote – and pass – in either chamber of Congress. We are hopeful that there will be some revisions from the previous bill, including the removal of a provision that would allow federal licensors to deny applications for cannabis business licenses based on prior state or federal felony convictions, and the inclusion of a more sensible and robust regulatory framework.
We are less than halfway through the calendar year, and it is shaping up to be a momentous one for cannabis advocacy! Stay tuned for more updates from Capitol Hill.
P.S. On the state side, Alabama became the latest state to approve an effective medical cannabis law. Yes, Alabama. That brings the count of medical states to 36, after unfortunately losing Mississippi to a shameful court decision. So far in 2021, four states have approved adult-use or medical cannabis legislation, and more are expected to do so in the coming weeks and months.
Cannabis Advertising, Marketing, and Branding Restrictions are Aimed at Preventing Youth Use, So Why Are We Driving Them to Drink?
by Rachel Kurtz-McAlaine, NCIA Deputy Director of Public Policy
A Seattle Hempfest lawsuit against the Washington State Liquor and Cannabis Board asks this question.
The title for this piece was inspired by the late Steve Fox, one of the founders of the National Cannabis Industry Association and co-author of the book, “Marijuana Is Safer: So Why Are We Driving People to Drink?” Written in 2009, it questioned why we were punishing adults for choosing a safer alternative to alcohol by criminalizing cannabis use while alcohol was legal. But it remains relevant when considering the laws and regulations under which each respective industry operates.
Last week I wrote about SMS text messaging and the challenges the cannabis industry is currently facing. The industry turns to SMS (text messaging) to a large extent for marketing purposes, often connected with loyalty programs. SMS is a great way to reach someone who specifically asked to receive the marketing and has already been vetted at the store to be over 21, which is huge in an industry with so many restrictions around marketing, advertising, and branding.
But a lawsuit currently under appeal at the Washington State Court of Appeals (having been passed down by the Wash. Supreme Court) is questioning some of these restrictions, especially when compared to the dearth of alcohol marketing restrictions. Seattle Events, who produces Seattle Hempfest, and a couple of legally licensed Washington cannabis companies brought the lawsuit against the Washington State Liquor and Cannabis Board (WSLCB) challenging some statutes and regulations that unfairly harm the industry and Hempfest by imposing restrictions around marketing, advertising, and branding that are not based on any meaningful data and are far more severe than restrictions around alcohol marketing. The differences are pretty stark when comparing the marketing rules and regulations on alcohol RCW 66.08.060 and WAC 314-52-070 with those on cannabis RCW 69.50.369 and WAC 314-55-155.
In Appellant’s Opening Brief, Hempfest and the other appellants offer convincing arguments on First Amendment grounds and broader free speech protections under the Washington state constitution for why some regulations are over-restrictive, but they also make very clear they agree that the prevention of use by youth is a valid state interest. In general, the cannabis industry is interested in keeping cannabis away from minors except for medical purposes – it’s one of the reasons we promote a safe, legal, regulated market. (To fully understand the legal arguments in this appeal, read the WSLCB, et. al/Respondents’ Brief here, and Hempfest, et al./Appellants’ Reply to the Response here.)
As more and more states legalize cannabis for medical and adult-use, and descheduling is contemplated at the federal level, lawmakers and regulators are working with the cannabis industry to craft rules and regulations around such things as marketing. State policymakers are connecting with each other to see where they can make their regulations more uniform, and federal policymakers are considering to what extent they’ll regulate marketing at the federal level on top of what the states do individually.
While these conversations are happening, it’s important to keep in mind the real-world effects these regulations have on the cannabis industry and if they’re unnecessarily more restrictive than the alcohol industry. That’s not to say the cannabis industry wants to look like the alcohol industry, being sold next to toys at Target, or mixing intoxication with driving by sponsoring NASCAR, but sometimes the industry is accused of purposely marketing towards kids for things like infused gummy candies when adults regularly use gummies to take vitamins.
The industry needs to take control of the narrative around youth prevention, working with agencies around rational messaging and regulations. The alcohol industry has a close relationship with the state and federal agencies that regulate it. In fact, a large part of marketing restrictions are self-regulatory standards, aimed to discourage underage drinking, that are entirely voluntary. The more we as an industry can voluntarily create marketing standards, the less likely harsher regulations will need to be implemented. Cronos, an NCIA Evergreen member and a leader in the international cannabis market, recently released its own standards limiting marketing to youth, and NCIA committees frequently release standards that are best practices for the industry.
The cannabis industry is incredibly creative, and thinking outside the box toward what appeals to adults without marketing to kids can be rewarding. The NCIA Marketing and Advertising Committee recently held a contest for best marketing around the 4/20 holiday. You can check out the webinar showcasing the best of that contest for examples on how creative we can be.
The cannabis industry wants to be a shining example of what a responsible industry can look like, that includes how advertising, marketing, and branding might interact with youth. But it is important to use real data for what actually works, come up with voluntary standards, and not put unnecessary restraints on an industry that is under enough restraint.
(If you’re interested in contributing to an Amicus Brief in support of Seattle Hempfest’s lawsuit, please contact Rachel.)
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Todd Glider has been an e-Commerce leader since the start of the Internet age. He has an MFA in Creative Writing from the University of Miami, and has served as CEO for small and medium-sized technology companies in Spain, Austria and the United States. As our Chief Business Development Officer, Todd introduces MobiusPay’s suite of award-winning financial services to new industries, and implements the development strategies and key partnerships needed to bring value to new customers.
Author: 
By Sadaf Naushad, NCIA Intern 
I am an Oakland-based hemp CBD & cannabis brand strategist, product developer/educator, and cannabis industry advocate who recently became a member of the NCIA DEI Committee. 
My career has more recently reached the intersection of beauty/personal care and cannabis products. I recently learned that some of the largest cosmetic/personal care companies in the world are now incubating emerging brands instead of regarding them as competition to be squashed or absorbed. Some are being groomed for future acquisition but not always anymore. It’s a more mutually beneficial business relationship.
The cross and leaf image for the movement so effectively portrayed the topic, some of us, while gathering signatures, simply wore 11 x 8.5” signs with this image around our necks to gather attention of potential signers. 
By Rachel Kurtz-McAlaine, NCIA’s Deputy Director of Public Policy 
Ms. Della Mora 
by Morgan Fox, NCIA’s Director of Media Relations
by NCIA’s Cannabis Manufacturing Committee
Dan Broudy is the CEO of 
