Member Blog: Where Is Delta-8 THC Legal and Where Is It Banned? CBD Oracle’s Map Has the Answers
Delta-8 THC is probably the most controversial cannabinoid on the planet right now. With the 2018 Farm Bill being widely considered to have removed the THC isomer from the federal list of controlled substances, hemp and CBD companies quickly found a use for their excess CBD isolate. But if you’re considering selling delta-8 THC,federal law is only a part of the picture, and at state level, you have a patchwork of different laws and regulatory schemes to contend with.
This is why CBD Oracle, working alongsideNeil Willner co-chair of the Cannabis Group at Royer Cooper Cohen Braunfeld, has produced astate-by-state map of delta-8 THC’s legality based on extensive reviews of state law. If you want to know what’s going on with delta-8 THC in a specific state, this is one of the best resources around to get the answer you’re looking for.
Delta-8 THC Is Legal in 22 States and 1 District With Limited Regulation
Despite the controversy surrounding delta-8 THC, it remains legal in 22 states and 1 district, with only limited regulation. This covers the following states:
Alabama*
Arizona
Arkansas
Florida*
Georgia (?)
Illinois
Indiana (?)
Kentucky*
Maine
Maryland* (?)
Missouri
Nebraska
New Jersey
New Mexico
North Carolina
Ohio
Oklahoma
Pennsylvania (?)
South Carolina (?)
Texas (?)
Washington D.C.
Wisconsin
Wyoming*
Here, a * beside the state’s name means they’ve instituted age restrictions, preventing anybody aged 21 or under from buying delta-8 THC. States marked with (?) are currently involved in legal action about the status of delta-8 THC.
In the majority of these cases, state law basically follows the blueprint laid down by the 2018 Farm Bill with few or no additional rules. In fact, only a handful of states (Alabama, Florida, Kentucky, Maryland and Wyoming) have even passed laws preventing youth from buying delta-8 THC.
Legal actions are ongoing in several states, with the situation being slightly different in each. For instance, in Maryland, thehemp industry won a temporary injunction against the state, preventing the state from enforcing the provisions of House Bill (HB) 556 which relate to hemp until the action is resolved. The bill originally made it so that delta-8 THC products (and most CBD) could only be sold in licensed marijuana dispensaries, but this was deemed by the court to create a monopoly.
Delta-8 THC Is Banned in 17 States and Severely Restricted in 7 More
For every state where delta-8 THC is de facto legal, there is another state which has either banned or severely restricted the cannabinoid. In total, CBD Oracle’s analysis shows that delta-8 THC is banned in 17 states and severely restricted in 7 more. The states with bans are:
Alaska
Colorado
Delaware
Hawaii
Idaho
Massachusetts
Mississippi
Montana
Nevada (technically could be approved for marijuana industry)
New York (isomerization banned, could theoretically be sold in adult use)
North Dakota
Oregon
Rhode Island
Utah (possible in medical industry)
Vermont
Washington
West Virginia
And there are severe restrictions – limiting all THCs to be under 0.3% for hemp products, unless otherwise noted – in the following seven states:
Iowa
Kansas
Louisiana (all THCs must be under 8 mg per serving and 1% by dry weight)
Michigan (all THCs under 0.3% and only marijuana-derived delta-8 allowed)
Minnesota (all THCs under 0.3% and less than 5 mg per serving)
New Hampshire
Virginia (2 mg serving limit or >25:1 CBD:THC ratio)
Exactly how delta-8 THC is banned or restricted varies by state. For instance, while Coloradobans the “isomerization” process used to make delta-8 from CBD, Idahobasically bansanything that contains THC at all, even if it’s just CBD with trace, federally-acceptable levels of delta-9 THC. For the restricted states, most require that all THCs total to under 0.3% by dry weight, which is technically possible for a delta-8 THC product to meet, but essentially none do.
The analysis also revealed that – just like with marijuana – making delta-8 THC illegal doesn’t automatically remove it from a community. In Hawaii and Mississippi, for instance, despite state law banning delta-8 THC, it is still openly sold.
Only Three States Have Substantial Regulations on Delta-8 THC
In California, Connecticut and Tennessee, delta-8 THC is legal but has substantial regulations in place. In California and Connecticut, delta-8 THC is treated as marijuana and is sold as part of the adult use industry. This automatically institutes a wide range of requirements on the cannabinoid, including rules on testing and labeling to ensure safety and transparency for consumers.
Tennessee is the unique case here, where delta-8 THC is regulated as a “hemp-derived cannabinoid” and is legal to sell to adults aged 21 and over.Senate Bill (SB) 378 includes requirements for testing for contaminants, informative labeling and marketing which does not target youths, as well as a 25 mg serving size limit.
The Patchwork of Laws and the Future of Delta-8 THC
The key take-away for sellers of delta-8 THC is that current state regulations are a patchwork, making it very difficult to navigate for even the most responsible of companies. The product you can sell in Arizona without issues is probably not legal in Kansas, and would require batch testing and more to be sold in Tennessee.
This uncertainty may be resolved by the upcoming 2023 Farm Bill, but even this isn’t a sure thing. While the 2018 Farm Bill opened the door to a whole host of products and simply assumed (incorrectly) that the FDA would step up to regulate finished products, the new version might offer the clarity that was lacking. However, it’s just as likely that the bill will redefine “hemp” in a way that excludes delta-8 THC by default.
Pretty much the only thing you can depend on is that you’ll need to keep a close eye on state laws in the coming year. CBD Oracle’s map will be continuously revised to reflect the current legal reality and help responsible hemp companies remain compliant. ______________________________________________________________________________________
Lee Johnson is the senior editor at CBD Oracle, and 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.
CBD Oracle is a cannabis consumer research company working to improve the safety and transparency of cannabis and hemp products, which publishes in-depth scientific, legal and consumer analyses on cannabis and cannabinoids.
Committee Insights: Where Risk Assessment Integrity Meets Policy
Join us for Episode 3 of the vape-focused #IndustryEssentials webinar series, brought to you by NCIA’s Cannabis Manufacturing Committee. In this informative session, we will delve into the critical intersection of Risk Assessment Integrity and Policy within the cannabis and hemp industries.
As the cannabis and hemp sectors continue to experience rapid growth, ensuring product safety and integrity is paramount. This webinar will provide industry professionals, policymakers, and stakeholders with the knowledge and insights needed to navigate the complex landscape of risk assessment, compliance, and policy development.
Learning Objectives
• Ingredient Risk Assessment Exploration
• Discuss the Balance of Regulations vs. Innovation
• Gain Insights on Due Diligence for New Products
• Impact of Counterfeiting and Effectiveness of Track & Trace on Authenticity
• Overview of the Global Cannabinoid Containing Product Landscape
• Explore Evolving Advertising and Marketing Regulations
• Precautions for Cross-State Shipping and Product Integrity
• Discover Strategies for Youth Prevention and Emerging Technologies
Panelists:
Gillian Schauer
Executive Director
Cannabis Regulator’s Association
Raza Lawrence
Counsel
Zuber Lawler Group
Shawna Vreeke
Head of Research
True Terpenes
Josh Borodin
Head of Product
GREENTANK
James Granger
Chief Political Officer
Cliintel Capital
Darwin Millard (Moderator)
The GMP Collective
Committee Insights: Cannabis Vaping – Avoid Being an Easy Target
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most. The NCIA Committee Insights series showcases content produced in partnership with one of our 14 member-led committees.
Join us for Episode 2 of the vape-related #IndustryEssentials webinar series, presented by NCIA’s Cannabis Manufacturing Committee. In this highly informative session, we’ll delve deep into the world of cannabis manufacturing risk management, focusing on essential tips and strategies to help manufacturers avoid and effectively manage risks associated with the production of cannabinoid-containing products.
The 2019 EVALI outbreak stirred up the cannabis vape industry making some businesses an easy target in the court of public opinion. However, vaping continues to be a popular form of consumption among GenZ users, creating a demand for companies to design safer products and expand their due diligence testing during the product development phase. NCIA’s second vaping webinar of 2023 will sit down with industry experts to discuss what their companies are doing to avoid being an easy target, prevent another EVALI-like crisis, and how to navigate an industry in the absence of regulations.
Learning Objectives:
• Risk assessment and due diligence protocols to determine consumer exposure limits.
• Best practices and manufacturing standards during product development
• Youth prevention strategies
• Insights gained from emissions testing of vape products
Don’t miss this opportunity to stay ahead in the ever-evolving cannabis industry. Register now and join us for an engaging discussion on cannabis manufacturing risk management.
Committee Insights: Cracking the Code – Unraveling the Challenge of Coverage for Novel Cannabinoids
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
We’ve seen so much interest and had so much fun exploring these topics that we couldn’t wrap it up just quite yet! Next month, NCIA’s Risk Management & Insurance Committee explores why insurance for novel cannabinoids can be such a challenging code to crack…
In this session you’ll learn from our panel of leading risk management, insurance and compliance experts how to navigate liability and legislative loopholes so you’ll better understand exposure alongside a patchwork of federal and state requirements.
You’ll leave this webinar with a better understanding of how novel cannabinoids are defined in various insurance policies, why they’re difficult to insure and the science behind this novel cannabinoid coverage conundrum.
Join us for this insightful webinar as we strive to unravel the complexities of insuring novel cannabinoids and equip you with the knowledge needed to make informed decisions regarding your insurance coverage. Reserve your spot today and crack the code to safeguard your products, operations and workforce!
Committee Insights | 7.26.23 | Concepts for Regulatory Consideration – Shifting the Conversation from “Cannabis vs. Hemp” to “The Cannabinoids”
NCIA’s #IndustryEssentials webinar series is our premier digital educational platform featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
In this edition of our NCIA Committee Insights series, originally aired on July 26, we were joined by leading cannabinoid product manufacturers and Cannabis Regulators Association (representing cannabis and hemp regulators across more than 40 states and U.S. territories) to examine different approaches to regulating consumer products containing cannabinoids across the US and discuss the potential for harmonized regulations in the future.
Regulating the cannabinoids is difficult enough, but throw in the challenges associated with cannabinoids derived from marijuana or hemp and the challenges can get even more complicated. Not to mention the debate between intoxicating and non-intoxicating cannabinoids and how to address the risks to public health and safety from these different types of cannabinoids. Then you have the proverbial “cherry on top” with how to address cannabinoids, both naturally occurring and novel, being produced by genetically modified organisms and scientists in the lab. There has got to be a logical way to solve this problem.
One potential solution is shifting the conversation away from cannabis vs. hemp and toward the constituents of concern, the cannabinoids. By regulating the cannabinoids, we can focus the debate on what matters, how to regulate cannabinoid ingredients in a way that is proportional to the level of risk to public health and safety. This ensures we have both a functional and vibrant cannabinoid products market and the means to protect consumers.
Learning Objectives:
• Learn about the similarities and differences between marijuana and hemp regulations for consumer products containing cannabinoids
• Find out what a consumer product containing cannabinoids is and how this concept can be used to promote more common sense regulations
• Listen to new perspectives on the challenges facing the cannabinoid-containing consumer products space and how to more efficiently regulate this marketplace
Curious about the complex world of cannabinoid regulation? Sit back and settle in for an insightful webinar where we delve into the challenges (and solutions!) surrounding cannabinoids derived from marijuana and hemp.
From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape (Part III): https://bit.ly/3Xc9Lx6
Know Your Hazards – Occupational Health and Safety Considerations in Cannabinoid Ingredient Manufacturing (Part IV): https://bit.ly/3rEUeKP
Committee Insights | 7.13.23 | Know Your Hazards – Occupational Health and Safety Considerations in Cannabinoid Ingredient Manufacturing
NCIA’s #IndustryEssentials webinar series is our premier digital educational platform featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
In this edition of our NCIA Committee Insights series, originally aired on July 13, we were joined by members of NCIA’s Cannabis Manufacturing, Scientific Advisory and Hemp Committees for an in-depth discussion highlighting the occupational health and safety considerations to make during the manufacture of cannabinoids and provide recommendations for mitigating risk.
There is no mistaking that manufacturing cannabinoids is here to stay. It is more and more prevalent to see historically plant/naturally derived bulk ingredients being manufactured in a controlled environment in the lab or through innovative processes like precision fermentation. It is likely that bulk ingredient manufacturing of cannabinoids will go this route too.
For cannabinoids like HHC, that do not exist naturally in the plant or in high enough quantities to be commercially viable for extraction, it is most certainly the case that manufacture of these compounds will occur in the lab. To produce these compounds safely, we can luckily look toward existing regulations and occupational health and safety guidelines for producing novel ingredients for use in foods and non-foods.
Learning Objectives:
• Recognizing common occupational safety hazards associated with manufacturing cannabinoids and recommendation to mitigate these hazards
• Learning the different occupational safety considerations between isolation and purification of naturally occurring cannabinoids and the manufacture (synthesis) of cannabinoids in the lab
• Understanding the special safety considerations that processes like hydrogenation and others have and why these are critical to mitigating liability for your business
From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape (Part III): https://bit.ly/3Xc9Lx6
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
Committee Insights | From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape
NCIA’s #IndustryEssentials webinar series is our premier digital educational platform featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
In this edition of our NCIA Committee Insights series, originally aired on June 13, we were joined by members of NCIA’s Cannabis Manufacturing, Scientific Advisory and Hemp Committees for an in-depth discussion of the current cannabinoid testing & labeling landscape alongside complications compounding consumer safety and product manufacturing concerns.
Consumer products that contain cannabinoids are a popular new consumer product category sweeping the United States. Whether these consumer products are manufactured using cannabinoids derived from cannabis or hemp, consumers deserve to know what they are consuming.
Truth in labeling is critical to providing cannabinoid content information to a consumer so they can make an informed purchase decision and in ensuring consumer safety. However, with so many different label content requirements from state to state for consumer products containing cannabinoids, this lack of consistency can lead to potential risks to the end consumer.
This is especially true when the majority of cannabinoid product manufacturers are dependent on third-party data during product manufacturing and compliance testing. This interdependence between testing laboratories and product manufacturers makes it all the more important that label content requirements are both achievable from a manufacturing standpoint without being overly burdensome for regulators to verify and do not endanger public health and safety.
In this webinar, our panelists explored about the current state of America’s somewhat-monitored cannabinoid-product marketplace, and examined several of the issues related to cannabinoid quantification, cannabinoid content declarations, and label claim verification and how these relate to consumer safety.
Learning Objectives:
• Learn about the potential risks associated with untested, unlabeled products both for the business owner and as a consumer
• Review the current landscape of cannabinoid testing requirements, how they vary state to state and the role 3rd party labs play in the picture
• Understand the nuances with label content compliance and implications on label claims
• Explore data integrity issues preventing consumers from making informed decisions
• Share best practices for what the the industry should do, what consumers can do and what regulators need to do
Panelists:
Paul Coble
Technology Attorney
Harris Bricken Sliwoski LLP
Matthew Johnson
Vice President, Risk Services
QuadScore Insurance Services
From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape (Part III): https://bit.ly/3Xc9Lx6
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
Member Blog: Quality Over Quantity – Why Stronger is Not Always Better
by Andrew Kaye, Sweet Leaf Madison Capital
Over the last 15 years, cannabis has seemingly catapulted away from the days of schwag and dirt weed. Today, we are seeing THC levels well beyond percentages that were displayed in dispensaries 10 years ago when cannabis first became legal in certain states. Advancements in technology, a better understanding of growing cannabis, and strain cloning has allowed for growers and chemists alike to fine-tune the plant to offer more bang for our buck – but not everyone needs to blast off every time they light up, right?
Right.
Recently, there has been a shift in the way we approach cannabis use, especially for medicinal purposes – proper dosing is everything. These stronger strains that have been Frankensteined together to ensure a potent one-hit high making it nearly impossible to provide a controlled dose for someone just looking for a chill evening or relief from their chronic pain. Granted, these strains have their place among seasoned tokers, but for others who are novice cannabis enthusiasts or patients looking for a treatment, stronger does not necessarily mean better. More intention should be put toward partaking, and it is as simple as asking yourself a few questions: How do I want to feel? What do I want to do? Where am I going? What hurts? Who is part of the experience?
Realistically, when was the last time you went to the bar to enjoy a casual night out with friends and started throwing back tequila shots until your knees buckled?
Hopefully, you are not recounting a night where that happened, but if so, you can probably guarantee that you would not put yourself in that situation again, at least not right away. Be honest with yourself, answer the questions above and chat with budtenders to find the best solution for you.
Knowledge is Your Best Friend
For a lot of people entering dispensaries for the first time, they see these high THC numbers and equate it to a better high, but the reality is that cannabis potency can be attributed to more than the THC percentage. Terpenes, differing cannabinoids and other compounds found within the plant also play a major role in how strong the strain is and what effect it has on your body and mind. Think of the subtlety of wine versus the kick of jello shots.
This is why it is important to talk with budtenders to better understand which strain is going to work best for what you are seeking. The problem today is that dispensaries are experiencing high turnover rates, as 55% of budtenders who held jobs over the last year left within 12 months of starting, according to a Headset market report. Losing seasoned employees not only impacts the store itself, but customer service tends to take a hit (no, not that type of hit). Inexperienced budtenders might be rushed to the counter without proper training, leading to misguided direction and customers walking away with flower or edibles that will send them to space, or to a space that they did not intend to go. Again, there is nothing wrong with having highly potent strains, but making and distributing them comes with a responsibility toward customer and patient care. As more states migrate to adult use cannabis, many are abandoning the medical dispensary model and focusing on high-profit strains, not curative or palliative care. Dispensaries need to ensure they are properly onboarding and training new employees to provide the best service possible.
The Future of Cannabis
As science improves and technology becomes more refined, cannabis potency is going to continue to go up, but it also means that mid- and low-potency strains will get better. If you look at the craft beer industry, the days of high abv IPAs and stouts are slowly fading and more focus is being put on taste and balance.
Since 2014, there has been an almost “gold rush” mentality where growers were fine-tuning their product at a high rate to offer a better punch than their competitors, but in 2023, after nearly 10 years of legal cannabis, customers are looking to refine their tastes and highs.
For most, the quality of the strain is going to be far more beneficial than the quantity of THC, but at the end of the day it is all preference. So do yourself a favor the next time your supply is low and chat with budtenders – lean on their expertise and compare with your own research. Try different strains along the potency spectrum and really consider taste. No one consumer is the same; make your experience yours. The higher the price is not always the nicer the nice.
Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney. He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”
“Sweet Leaf Madison Capital provides non-dilutive, asset-based lending solutions to the underserved middle market of the cannabis industry by originating real estate loans, equipment financing, securitized term loans, and more for entrepreneurs and businesses. The company is based in Denver, Colorado and has offices in New York City and West Palm Beach, Florida. To learn more or complete a loan application, visit Sweet Leaf Madison Capital online, or continue the conversation on LinkedIn, Twitter and Facebook.”
Andrew J. Kaye is Chief Commercial Officer of Sweet Leaf Madison Capital. He can be reached at akaye@sweetleafmadison.com.
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.
From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape (Part III): https://bit.ly/3Xc9Lx6
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
Committee Insights: Meet the Minors (Novel, Minor, Synthetic Cannabinoids – Part II)
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most. The NCIA Committee Insights series showcases content produced in partnership with one of our 15 member-led committees.
Our multi-part series on Novel, Minor, and Synthetic Cannabinoids continues! Join 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 LIVE from leading chemical experts, manufacturers and product development specialists as they explore 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.
Panelists
Cassin Coleman
Founder
Cassin Consulting
James Granger
Chief Political Officer
Clintel Capital Group
John Murray
President
Sustainable Innovations
Scott Seeley
Patent Attorney & Intellectual Property Lawyer
Eastgate IP
Committee Insights: NCIA Mythbusters – Is Cannabis Safer Than Alcohol?
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most. The NCIA Committee Insights series showcases content produced in partnership with one of our 15 member-led committees.
It is estimated that more than 140,000 people die from alcohol-related causes annually, making alcohol the fourth-leading preventable cause of death in the United States. How does cannabis compare? Find out in this special edition of Mythbusters brought to you by members of NCIA’s Scientific Advisory Committee and State Regulatory Committee. As more and more states move towards adult use, business owners must learn about safe access best practices and ways to reduce harm when it comes to their consumers.
Learning Objectives
• Learn what a contraindication is
• Learn which physiological and mental health conditions should avoid THC and CBD
• Familiarize yourself with State Regulations to Avoid Harm and Increase Safe Access
• Policy Recommendations to Avoid Harm
Panelists
Paloma Lehfeldt, M.D.
Senior Director of Clinical Science and Partnerships
Vireo Health
David Vaillencourt
CEO and Founder
The GMP Collective
NCIA’s #IndustryEssentials webinar series is our premier digital educational series featuring a variety of interactive programs allowing us to provide you timely, engaging and essential education when you need it most.
In this edition of our NCIA Committee Insights series, originally aired on December 14 and produced in collaboration by NCIA’s Cannabis Manufacturing Committee, Scientific Advisory Committee and Hemp Committee we introduced and framed the myriad regulatory, scientific, linguistic, and ethical issues that come with the rise of minor, novel, and synthetic cannabinoids.
Learning Objectives:
• Understand the role of minor, novel, and synthetic cannabinoids in the cannabis industry and the unique issues relating to their current status.
At the conclusion of the discussion our panel hosted a lengthy moderated Q&A session so our network could get all their burning questions answered by these leading manufacturing, biochemical, and legal professionals from the hemp and cannabis industries.
Panelists:
Scott Seeley
Biochemist and Patent/TM Attorney @Eastgate IP
Cassin Coleman
Founder
Cassin Consulting
Keith Butler
CEO
OP Innovates / Hemp Mellow
Paul Coble
Intellectual Property Attorney
Harris Bricken Sliwoski LLP
There is more to cannabis than THC and CBD. As our understanding (and commercialization) of cannabis evolves, new compounds like CBG, delta-8-THC, THCv, and others are coming onto the scene. These various “minor” cannabinoids, however, bring with them a host of new issues.
Over the next few months this collaboration will continue to explore these issues with various subjects ranging from basic and advanced overviews of these molecules, regulatory recommendations, risk management and compliance concerns all the way to consumer and manufacturer safety. Stay up to date and be the first to know when additional follow-up sessions are scheduled by signing up via the form below.
From Lab to Label: Safeguarding Consumers in the Cannabinoid Product Landscape (Part III): https://bit.ly/3Xc9Lx6
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
Member Blog: The Importance of Genetic Studies for Identifying Plant Mutations
by Angel Fernandez, Joselyn Guadamuz, and Maria de Catarina of MyFloraDNA
The cannabis industry has experienced significant growth in recent years, highlighting the importance of quality control measures. One of them is the utilization of laboratory partners to ensure the genetic integrity of the products. However, the connection between cannabis and genetic studies is often underappreciated.
A genetic study or test is a type of analysis that is carried out on a tissue or cell to search for essential traits in the genetic material of the plant. The results obtained from these analyses can provide a lot of information that helps confirm or refute many theories.
In recent years, genetic studies of cannabis have played a crucial role in the industry by providing growers with more advanced tools and techniques. These studies have enabled growers to improve crop yields by identifying key traits and characteristics for reproduction. Furthermore, genetic testing has been instrumental in quickly and effectively detecting diseases that affect crops and identifying the gender of the plant well in advance of flowering, thus saving growers time and resources.
Even more, genetic testing also allows cannabis workers to detect changes or damages in the genetic material of their plants.
Plants, like all living organisms, have a complex genetic makeup that plays a crucial role in their growth and development. However, the genetic material of plants can be susceptible to mutations, which are changes in the DNA sequence that can occur naturally or be caused by external factors. These mutations can have varying effects on the plant, from having no impact to causing serious detrimental effects on its growth and development.
One of the main factors that can cause mutations in the genetic material of plants is found in controlled environments such as in vitro culture laboratories. In these environments, plants are exposed to chemicals and UV radiation that can cause mutations in their DNA. However, not all mutations are harmful to plants. For decades, scientists have been making changes to the genetic material of plants with the goal of improving crop quality and characteristics.
While controlled environments can cause mutations in the genetic material of plants, it’s also important to consider the impact of environmental factors in uncontrolled environments, such as outdoor crop plantations. Factors like air (oxygen) and sunlight (UV rays) are two of the main factors influencing mutations in the genetic material of plants. Because these two factors are part of the normal conditions in which a crop lives on a plantation, mutations can be expected to occur at some point in the growth process of plants.
The damage caused by these factors can not only generate simple changes in the genetic material of the plants but can also have serious detrimental effects on the plant, such as growth inhibition. Even subsequent cumulative damage to genetic material can not only prevent plant cells from dividing and growing but can seriously damage tissue and ultimately kill the plant.
Although some of these mutations can be subtle and go undetected, the composition of the plant could have changed at a molecular level, which may mean that, for example, in the case of cannabis, a mutation causes the cannabinoid content to be of poor quality or even non-existent, but to the naked eye the plant looks normal. This is why genetic and molecular studies have played a key role in this industry.
Additionally, if a grower obtains a particularly outstanding trait in their plant, the only way to obtain information on that trait and validate its function is through genetic studies, allowing them to obtain a genetic profile of the plant as proof that it is unique. These studies also work to detect unique, outstanding traits, such as high THC or CBD production in cannabis, which would not be possible without laboratory analysis, as these traits cannot be measured visually.
It is crucial for growers to have a good understanding of the genetic material of their crops in order to ensure that they are of good quality and to detect any mutations that may have a negative impact on the plant. Genetic and molecular studies play a vital role in this industry by providing growers with the necessary information to make informed decisions about their crops, and to ensure that the plants they grow are of the highest quality and free of mutations that could have a negative impact on the final product.
About MyFloraDNA: We are a genomic laboratory based in Woodland California, delivering modern genomics for the cannabis industry.
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.
Angel Fernandez, author. CEO & Co-Founder at MyFloraDNA. Member of the NCIA’s Scientific Advisory Committee. “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”.
Joselyn Guadamuz, co-author. Scientific Researcher and Content Writer at MyFloraDNA.
Maria de Catarina, editor. Public Relations Specialist at MyFloraDNA.
Video: NCIA Today – Thursday, January 26, 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 Facebook and LinkedIN for NCIA Today Live.
Defining the Conversation: Minor, Novel & Synthetic Cannabinoids
There is more to cannabis than THC and CBD. As our understanding (and commercialization) of cannabis evolves, new compounds like CBG, delta-8-THC, THCv, and others are coming onto the scene. These various “minor” cannabinoids, however, bring with them a host of new issues.
NCIA’s Cannabis Manufacturing Committee, Scientific Advisory Committee and Hemp Committee are all collaborating on a series of #IndustryEssentials webinars over the next few months which will explore these issues with various subjects ranging from basic and advanced overviews of these molecules, regulatory recommendations, risk management and compliance concerns all the way to consumer and manufacturer safety.
To kick off this series we’re showcasing an initial session taking place on Wednesday, December, 14th at 3PM ET / 12PM PT introducing and framing the myriad regulatory, scientific, linguistic, and ethical issues that come with the rise of minor, novel, and synthetic cannabinoids.
Learning Objectives
• Understand the role of minor, novel, and synthetic cannabinoids in the cannabis industry and the unique issues relating to their current status.
At the conclusion of the discussion they’ll be hosting a moderated Q&A session so don’t miss your chance to participate in this interactive educational experience with leading manufacturing, biochemical, and legal professionals from the hemp and cannabis industries.
15-minute Introductory Session
But before we get started … Acquire the foundational knowledge needed to dive deep into this session by watching this introductory video on Minor, Novel and Synthetic Cannabinoids.
During this brief 15-minute presentation our panelists Scott Seeley of Eastgate IP and James Granger of Clear Cannabis Inc, both members of NCIA’s Cannabis Manufacturing Committee, will walk you through the categories of compounds, outside of the commonly known big two – THC and CBD, and explain what is known about these compounds along with what the industry can do to move forward to provide safe products to consumers.
Member Blog: Payment Processing in the Cannabis Space – Part 3
This is Part III in a series of blog posts entitled Payment Processing in the Cannabis Space. Click here for Part I, and here, for Part II.
It would be naive to suggest that the cannabis retailer isn’t also facing headwinds resulting, simply, from a century of bad press. Putting the questions of federal vs state legality aside, it’s important to note that payments and banking issues are not unique to the plant-touchers, or Cannabis-Related Business Tier I, or CRB Tier I. CRB Tier II, the ancillary, or cannabis-adjacent businesses, have challenges of their own.
On any given day, there are a galaxy of companies, consultancies, medical practices, and professional organizations expanding their reach into our growth industry. And why not? The legalization of cannabis is a bona fide 100-year event, and intrepid business owners of all shapes and sizes sense opportunity, a new market for their wares and expertise.
And while they may be welcomed with open arms by their new colleagues and contemporaries in the cannabis community, they often find their banking relationships suddenly souring.
A message from their payment processor arrives.
It says, “Sorry, Gayle Force Grow Lights. Your processing has been suspended.”
A message from their bank hits the Inbox.
It says, “Sorry, Gayle Force Grow Lights. Your account is being shutdown down.”
These are chilling, but easily explainable events. And while it may be tempting to tuck them neatly into a dystopian ‘Big Brother is Watching You’ framework, what’s happening here is more Kafkaesque bureaucracy than Orwellian totalitarianism.
So what happened? Gayle Force Grow Lights has been marketing its grow lights to the people of Maine for 25 years. Gayle, the owner, saw cannabis legalization sweeping the nation, and thought, “Here is a new market for my grow lights.”
She updates her digital storefront accordingly, which is to say, she added a new marketing bullet: Ideal for cannabis cultivators.
To us, the word ‘cannabis,’ is an industry term. In Gayle Force Grow Lights’ case, it is marketing jargon. However, to the processors and banks employing dummy algorithms to crawl their clients’ sites, that word is a red flag. When that red flag is tripped, Gayle’s processing is suspended. When that red flag is tripped, Gayle’s business bank account is shut down.
Gayle Force Grow Lights, in the eyes of the PSP it’s been using to accept credit cards, and in the eyes of the financial institution it’s been using to bank, has, suddenly, transitioned from a reliably safe client to a potentially risky client.
Risky clients need to be watched more closely. Risky clients require more due diligence and KYC measures. And since it is not cost-effective for a PSP with 24 million accounts — or a bank with 70 million clients — to police Gayle Force Grow Lights, which processes $100,000 in transactions per-month, and has an average cash balance of $2 million, they show Gayle, and her small business, the door.
The good news? Gayle Force Grow Lights is fictitious. I made it up.
The bad news? Gayle Force Grow Lights is a composite. This is happening to businesses in the cannabis space every day.
What Does the Future Hold?
Right now, merchant accounts are only an option for sellers of hemp and hemp derivatives. But the day will come, with national legalization, when every cannabis-related retailer will have the legal option of accepting credit cards.
As with CBD, it is inevitable that there will be numerous challenges to merchants when this occurs. It is inevitable that cannabis sales will be deemed ‘high risk’ by the card associations. It is inevitable, also, that only a handful of Acquiring Banks will elect to throw their hats into the ring.
The good news is that it is just as inevitable that the companies providing merchant accounts for CBD businesses today will be the ones providing merchant accounts to businesses selling THC in excess of .3%, tomorrow. As always, the most dependable among them will be those that have direct relationships with the Acquiring Banks. This will ensure that account acquisition and maintenance for all cannabis-related businesses is as smooth and as easy as it can be.
MobiusPay, Inc. is a US-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.
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.
Committee Insights | Setting the Stage: Minor, Novel, and Synthetic Cannabinoids
There is more to cannabis than THC and CBD. As our understanding (and commercialization) of cannabis evolves, new compounds like CBG, delta-8-THC, THCv, and others are coming onto the scene. These various “minor” cannabinoids, however, bring with them a host of new issues.
NCIA’s Cannabis Manufacturing Committee, Scientific Advisory Committee and Hemp Committee are all collaborating on a series of #IndustryEssentials webinars over the next few months which will explore these issues with various subjects ranging from basic and advanced overviews of these molecules, regulatory recommendations, risk management and compliance concerns all the way to consumer and manufacturer safety.
To kick off this series we’re showcasing an initial session taking place on Wednesday, December, 14th at 3PM ET / 12PM PT introducing and framing the myriad regulatory, scientific, linguistic, and ethical issues that come with the rise of minor, novel, and synthetic cannabinoids.
But before we get started … Acquire the foundational knowledge needed to dive deep into this session by watching this introductory video on Minor, Novel and Synthetic Cannabinoids.
During this brief 15-minute presentation our panelists Scott Seeley of Eastgate IP and James Granger of Clear Cannabis Inc, both members of NCIA’s Cannabis Manufacturing Committee, will walk you through the categories of compounds, outside of the commonly known big two – THC and CBD, and explain what is known about these compounds along with what the industry can do to move forward to provide safe products to consumers.
Member Blog: Reaching The Highest Common Denominator
by Raina Jackson, Founder & CEO of PURPLE RAINA Self Care Member of NCIA’s Diversity, Equity, & Inclusion Committee (DEIC)
This past September I had the pleasure of lobbying in D.C. for the first time as part of NCIA’s 10th Annual Lobby Days. The lobbying process was demystified for me, and I found that lobbying isn’t easy, but it isn’t that hard when you share your talking points from your heart, representing your own and others’ experiences. I learned that the NCIA delegation shares more common ground than we realized with Congressmembers, especially through their younger and more hip staffers and family members. One senator has a daughter who used to be a budtender and now podcasts about the industry, Senator Gary Peters (D-MI).
I was encouraged by how receptive legislative aides and advisors were to the factual talking points and statistics NCIA provided us to appeal to their sense of reason and fairness. They recognized the public health and economic benefits cannabis has delivered and its potential, without being distracted by useless moral arguments against it. Our team gave an overview of the cannabis landscape and advocated while offering solutions to our varied struggles as cannabis entrepreneurs.
We highlighted that 47 states have adopted some form of cannabis commerce and decriminalization, representing 97.7% of the U.S. population! The majority of the American public demands safe access to cannabis. Why not ride the wave?
Cannabis has been found to be a “gateway” medicine for a more safe withdrawal from opioid addiction, especially crucial to states experiencing high overdose death rates.
We discussed the DEA recently approved funds for even more substantial clinical research on the myriad of proven and potential health benefits delivered by the cannabis plant in a wide range of forms. Yet existing cannabis research is often more robust and held to higher standards than over the counter aspirin. Many pharmaceutical drugs are advertised on TV as the best thing since sliced bread one day (albeit with alarming potential side effects), then next named in TV ads for class action lawsuits for their harmful effects.
A case for an enhanced SAFE Banking Act
The legal U.S. cannabis market is valued at $17.7 billion, with a substantial amount unbanked, causing a public safety crisis. Our discussions illuminated our common ground regarding the public safety improvements and economic benefits that the bipartisan supported SAFE Banking Act will bring to each state choosing to introduce its own customized hemp CBD/low THC, medical, or adult recreational cannabis program.
When compliantly banked these funds will offer financial institutions of all sizes more capital for lending to spur economic recovery and a safer industry. While no financial institution will be required to participate, the risk mitigation and sizable financial benefits can’t be ignored.
SAFE will remove the risk of federal prosecution for compliant financial institutions already offering banking to cannabis businesses, while encouraging more banks and credit unions to join them. Too many existing entities providing cannabis banking services tend to mitigate risk by charging exorbitant monthly fees, financially hobbling startup cannabis businesses or excluding them altogether.
SAFE would also support hemp CBD businesses like mine, still navigated the grey area regarding access to banking, loans, leases/mortgages, and payment processing.
In my follow-up email to the Congressional aides and advisors we met with, I attached a white paper authored by the Cannabis Regulators of Color Coalition (CCRC) offering best practices for increasing financial access to cannabis businesses, prioritizing groups that have been historically underserved by traditional financial institutions and disproportionately harmed by prohibition.
What’s next?
This regulated cannabis industry is so new that we must allow each other some grace as stakeholders. As cannabis advocates, we have learned that “calling people in” for discussions on the benefits of the SAFE Banking Act and comprehensive cannabis reform is more effective than “calling them out.”
Elected officials and their staff don’t understand first-hand what we experience as cannabis entrepreneurs, and many care more than I expected. Lobbying and sending them emails on new and modified policy recommendations helps them to be well-informed enough to support us. My highlight was meeting with a CA legislative aide who is a fellow CA native and sincerely wanted to be updated on my progress and pain points. We all had a laugh about him agreeing to let me go into “the weeds” concerning the licensing process, pun intended.
Since Lobby Days, President Biden announced the upcoming FDA and DEA review of cannabis as a Schedule 1 drug. It could potentially be de-scheduling within the next 12 to18 months! However, to date, only seven states provide licensing priority, exclusivity, or set aside a percentage of licenses for qualified social equity applicants. The same way the SAFE Banking act should be passed with amendments fostering equity, state, and future federally legalized cannabis programs must include targeted equity programs to help level the playing field. I look forward to returning to D.C. in May for 2023 NCIA Lobby Days!
Raina Jackson is a multifaceted cannabis brand strategist, product developer, and advocate, and is the founder & CEO of PURPLE RAINA Self Care, the culmination of her love for beauty wellness products, the color purple, and the musical and cultural phenomenon Prince. For the past 7 years she has worked in the San Francisco Bay Area cannabis industry in sales management, field marketing, distribution, and product development, and a verified SF Cannabis Equity applicant in Oakland and San Francisco. For the past year she has served on the NCIA Diversity, Equity, & Inclusion Committee and the Regulatory Compliance subcommittee.
Raina has over 15 years of experience in beauty/wellness care product development, sales/ marketing management, and product education at Maybelline, L’Oréal Professional, and Design Essentials Salon System and has taught cosmetology at The Aveda Institute in SoHo NYC. A San Francisco native, Raina earned a B.A. degree in cultural anthropology and linguistics from Stanford University and an MBA in marketing and management from NYU.
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.
by Gary Paulin, VP of Sales and Client Services at Lightning Labels
With expansive product choices, it’s no longer enough to rely solely on product quality and availability. Today’s maturing cannabis marketplace requires differentiation to resonate and succeed.
Three pillars of that differentiation are stellar customer service, total transparency, and excellent education. At the core of each, sincerity and truth must predominate. In this age of “fake news,” anything that doesn’t seem trustworthy and true likely will backfire on the company sooner or later.
It only takes one unsubstantiated quality control or product claim to hit the social media lie detector, then potentially go viral. At the very least, one consumer badmouthing your company via word-of-mouth and/or digital messaging will harm your reviews and ratings. In most cases, the damage will be undetectable until it reaches a level where revenues and reputation are noticeably impacted.
Following are four basics of stellar customer service, transparency, and education:
Interact authentically. Scripts and canned phrases instinctively don’t resonate with most consumers. One obvious example is the “I’m so sorry you’re having a problem” response. How likely is it that the person is really sorry and not just parroting something they’ve been told to repeat time and time again? Instead, communicate in a real way by tuning into what the existing or prospective customer is trying to address.
For example, when someone complains about lengthy waits to receive live phone support (including disconnects while waiting), it’s okay to say something like, “I get it. We’ve been having challenges. Now that we’re on the phone together, let’s address your needs right away. And, please give me your phone number, just in case this call drops. I’ll call you right back.”
Offer multichannel communications preferences. Some people want live phone support, not a digital option. Chat bots can be extraordinarily frustrating unless the programming and ability is advanced. Ditto for “live chat.” As much as possible, make it easy and meet everyone’s preferences. Email, live phone support, texting, website knowledge center, and digital chat should all be offered to meet the customer in a way that works best.
Offer total and transparent education. Knowledge centers (and associated forums) and FAQs can be excellent tools to help provide priority information, but they’re only one piece of the puzzle. Consumer questions and concerns can cover anything. There should be an easy way to find more information through the above-referenced channels as needed. Product labels can provide easy access to a variety of information, starting with label content and extending to either Augmented Reality or QR digital gateways for more in-depth education. Those digital gateways should contain valuable information, along with easily found follow-up calling, emailing, live chat, and additional educational options (including possibly Knowledge Center, FAQs, and keyword-search forums/articles, et al).
“Full disclosure” should be at the core of all things educational, both in information repositories and customer service support. For example, CBD can make some people cranky and anxious. Full disclosure must override the desire to sell. By fully informing a consumer of risks as well as rewards, the experience is much more likely to result in high marks for the company.
Conversely, incomplete or inaccurate information provided by salespeople motivated only by making sales will backfire when less than optimum outcomes occur. In contrast, a salesperson willing and able to fully educate will help build long-term customer relationships with the company.
Hire motivated, attentive, smart people. No matter what policies and training are in place, ultimately companies need to focus on hiring the best candidates — those dedicated to top-notch customer service, truthtelling, and education. Workforce shortages are not a valid reason to abandon these core values in the name of expedient hiring. Be committed to employee wants and needs, and be prepared to follow through. Offer generous wages, but beware of those who seem overly money motivated and demanding. They likely will be gone as soon as the next “shiny toy” opportunity comes along.
There are companies that have weathered supply chain and workforce shortage issues — and even inflationary pressures — well. One that comes to mind is Costco. Unlike many retailers during the pandemic, their quality of service has remained high. Product availability and selection have been maintained. Prices, although subject to some upward movement, don’t seem to have risen as much as most retailers.
Clearly, Costco found solutions instead of blaming challenging conditions and using those as an excuse for failure. Follow this example. Find ways to do more with less, get creative about becoming more efficient, and plan ahead so that emergent problems don’t become overly taxing.
Cannabis companies that excel in being trusted, liked, and respected will outperform their competitors willing to live with mediocrity.
Gary Paulin is VP of Sales and Client Servicesat Lightning Labels, a Denver-based custom label printer that uses state-of-the-art printing technology to provide affordable, full-color custom labelsand custom stickers of all shapes and sizes. Contact: sales@lightninglabels.com; 800.544.6323 or 303.481.2304.
Committee Blog: An Introduction to Minor/Novel Cannabinoids
In our rapid advance in cannabis science through recent years with the easing of restrictions of handling and experimenting on cannabis and cannabinoids via legalization and regulation efforts across the country, we have discovered and re-discovered cannabinoids that hold potential for great advancement in cannabis chemistry and potential for many beneficial health and wellness benefits along with identifying via production methodology, the safe and cost-effective means of producing these cannabinoids themselves.
We define these new cannabinoids, different from the standard ones identified and required to be noted on regulated cannabis products (i.e. THC-A, THC, and CBD) in a number of ways, all being used in this article to define Minor/Novel cannabinoids. Minor cannabinoids are simply defined as every other cannabinoid that is found in cannabis besides THC and CBD. Science has identified over 100 outside the two standards, and more are discovered each year. Defining “Novel” cannabinoids; we look at five major classifications; Classical, Non-Classical, Hybrids, Aminoalkindoles, and Eicosanoids. Finally, we use the term “Synthetic” cannabinoids to define compounds related to cannabinoids, but not naturally found in any concentration in the cannabis plant or related plants themselves. Realistically, the term Synthetic could be replaced by Novel, Classical Synthetics, and Non-Classic Synthetic compounds. For the sake of this article, we will be defining and discussing the basics of the generalized “Minor” cannabinoid family along with touching briefly on possible “Synthetic” compounds of interest in the future.
It would be easy to dismiss all these compounds outside THC and CBD as so rarely found in the natural cannabis plant, that they would not impact the industry or growth/focus on regulatory affairs in the space for discussion. However, one thing that these compounds have been found to cause is not only true intoxication in individuals, but also potential workarounds between State and Federal law regarding restrictions around classic cannabinoids THC and CBD, which have been the main focus of lawmakers and regulators in the past. One of the most prevalent and important that has made its way into many small gas stations and head shops across the country would be a compound such as Delta-8-THC. Often described as “THC light” Delta-8 has been produced through semi-synthetic means to achieve intoxicating effects while still skirting around the laws regarding Delta-9 THC. Delta-8 is not a new compound, having been known for years in the organic chemistry field and now being produced via widely available and federally legal CBD isolate. Compounds such as “Delta-10” and others are now becoming available to market in a large way and generalized knowledge of the substance and its effects are becoming widely discussed.
Overall, the compounds themselves have years of real research behind them, showing that when produced correctly and tested for efficacy, there are real potential benefits to use in the human body for a variety of reasons or conditions. Many more years of research are to be done to learn proper testing methodology based on production methods, but overall, we are seeing many potential benefits of these compounds for human use.
The human body internally operates and relies on what is called the endocannabinoid system. The system affects the human body’s ability to heal/regenerate, regulate body temperature, and many other positive background systems in the body. Humans are built to process and use cannabinoids and the deficiencies of those can lead to imbalance in the body’s systems. One effect of cannabinoids in the human body is also that of intoxication. Scientists rely on various interacting chemistries in the body and brain to determine the concept of intoxication. There is no doubt in the argument against any intoxication, however, we tend to view intoxication through a negative light while simultaneously ingesting a cup of coffee in the morning for the intoxicating effects of caffeine. Looking at intoxication through this light, down to the way in which a cup of tea can calm, soothe, rejuvenate, or stimulate; we seek to define and examine the potential benefits of these minor cannabinoids in the human experience while studying and researching their potential uses in the future.
Taking a brief look at overall results from studies around minor cannabinoids, we find a variety of effects and use in minor cannabinoids that far outstrips the standard belief of what THC or CBD can do for the body. THC-V, for instance, that is found in higher concentrations of strains from specific parts of the world, including the south part of the continent of Africa, has been shown to work towards appetite suppression and could potentially be a lesser harmful compound in the quest for weight loss in individuals. Looking at the compound CBG, it has been shown in studies to improve focus and cognition, a very different outcome than its relative THC. THC-O has even been shown to have a greater intoxicating effect than Delta-8 or 9 due to the ability of the human body to uptake the compound more efficiently. Finally, one compound that is making waves in the field of sleep science is CBN, an oxidized molecule of CBD that could help people find non-habit-forming relief in the quest for better rest. While all of these compounds are and can be created from various forms of THC and CBD, much more research is needed (and thankfully finally becoming allowed in this country) to judge their effectiveness and side effects.
All these modifications via organic chemistry with existing cannabinoids, while yielding beneficial results in the lab and clinical research; should be examined and tested like any other regulated product being consumed by humans. One very real potential danger is not only the continued prohibition and extreme regulation of research into cannabinoids leading to clandestine production methods in markets that do not require testing (i.e., “Bathtub” Delta-8 production using strong and dirty acid compounds) but the continued chasing of new compounds outside the current regulatory structure that exists with the DEA here in America. Cannabis has been through this struggle before; with THC highly regulated and tested for in individuals in the military, probation, transportation, or heavy equipment operation; there was a desire to still feel the effects while “complying” with the strict THC ban. These compounds were developed at a rapid rate, leading to “Synthetic THC” or “Spice”-type compounds. While the legislation was aware of the issue, the methodology of banning a single compound led underground chemists here and around the world to tweak the molecular structure to have a similar effect while essentially testing their new blends on the unsuspecting masses, resulting in many injuries and developing long-lasting negative effects in individuals.
One of our biggest tools to combat another “Spice” development cycle that outpaces the research done on these compounds is to deregulate and lessen the difficulties in studying these compounds in highly regulated scientific settings (i.e., universities and scientific institutions). Following that initial change, there needs to be significant development through those institutions regarding establishing long-term studies and testing methods to examine the effects on the human body. Regarding final product testing; in the regulated market, all cannabis products sold through licensed dispensaries from licensed producers need to undergo stringent testing for potency/solvents/heavy metals contamination/microbial contamination, and other potential hazards before the product are deemed safe to sell to customers. Allowing other minor compounds, such as Delta-8-THC, to be sold to consumers via untested pathways and through unregulated channels opens the possibility of harm either through incorrect dosing or contamination via shoddy production methods or less-than-clean packaging standards. Labs need to continue to modify and develop their means to accurately test these compounds and regulators need to hold manufacturers accountable in following the health and safety testing requirements as are currently being done in the regulated cannabis markets across the country.
Not only do these compounds have a significant potential for health and human wellness but could even assist in the development of significantly cleaner production methodology for the main cannabinoids like THC, allowing for lower costs of production and for much more market competitiveness and development by lowering hurdles like highly regulated cannabis agriculture. If you do not need to spend valuable resources to grow the plant itself and the compounds can be safely produced with higher consistency, it will be a boon to manufactured products that require them for their formulations.
In no way should we shut the door on the potential future of these compounds but embrace the study and research to re-invigorate the development and growth of the use of a plant that has been part of the human consciousness for over 3,000 years. While the names sound scary and different, we are just cracking the code on the depth of this plant and what it can do after so many years in the shadows.
The Cannabis Manufacturing Committee focuses on reviewing existing business practices and state regulations of concentrates, topicals, vaporizers, and edibles, ensuring the manufacturing sector is helping shape its destiny.
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.
As we make our way closer to 2022, the world is also entering a new paradigm for the cannabis industry. Due to advancing global legalization efforts, cannabis use is gaining mainstream acceptance for the first time in history. With these shifting perspectives also comes the rapid deterioration of traditional stereotypes.
Today, cannabis is not only widely regarded as a legitimate medicine, but many people also look to it as a performance tool. To this end, the endorsement of the herb by pro athletes, media icons, and high-powered executives has again turned our conceptions of cannabis on its head.
With such rapidly shifting perspectives, we are witnessing a monumental moment in time where propaganda is being replaced with factual evidence. As things evolve, active people are not only endorsing legalization, but many swear by cannabis as a performance tool.
Indica and Sativa
The more places that legalize cannabis around the world, the more opportunities we have to study cannabis in controlled settings. As our knowledge expands, so does our ability to use specific compounds in cannabis to aid particular activities.
In the early days of legalization, broad terms such as “Indica” and “Sativa” were used to describe just about every attribute of cannabis – including both product descriptions and psychoactive effects. To this end, Indicas are widely accepted as calming, while Sativas are known to be energetic.
Terpenes & Strains
While the effects of Sativas and Indicas are still widely accepted across the industry, we are also beginning to see a much more nuanced approach to cannabis consumption. Especially when it comes to performance, a more granular perspective of cannabis is necessary.
To maximize the performance benefits of cannabis, it’s critical to understand the constituent parts of the cannabis flower. By understanding the effects of different strains and cannabinoids, and terpenes, people can better choose the right products for their performance needs.
Notable cannabinoids and terpenes and their effects:
Tetrahydrocannabinol (THC): Cannabinoid that provides energy and focus during activities helps boost creativity. Pain reliever after physical activity.
Cannabidiol (CBD): Cannabinoid that relieves anxiety before and during performances. Pain reliever and anti-inflammatory agent after physical activity.
Cannabigerol (CBG): Cannabinoid, which promotes motivation and stimulates pleasure. Pain reliever and anti-inflammatory agent after physical activity.
CLS Holdings’ own City Trees developed several popular products based on the effects of certain cannabinoids and terpenes. Their Calm, Relief, Rest, and Energy distillate vape cartridges offer simplified shopping experiences for new cannabis consumers. By building product messaging around the effects of the products, they help people understand exactly what they are purchasing.
Physical & Mental Performance
While a detailed assessment of the compounds found in cannabis can go a long way, you must also account for your specific performance needs when finding the right cannabis product. Depending on how your body and mind react with cannabis, you can utilize it to help with physical activities and cerebral pursuits.
Whether you are interested in feeling more energized for your workout routine or getting the creative juices flowing for a writing assignment, there is likely a cannabinoid and terpene combination to suit your needs.
Olympic gold medalist snowboarder Ross Regalati swears by cannabis during both training and competition. The famous Canadian snowboarder feels cannabis “improves concentration” and is great for training because flowers are both “fat-free and calorie-free.” While no longer a professional snowboarder, Regaliti is still a world-class athlete. Today, his choice cannabis strain for exercise is the Sativa-dominant hybrid Bruce Banner.
The famous female vocalist Alanis Morisette swears by cannabis as part of the creative process. In an interview with High Times, she states, “As an artist, there’s a sweet jump-starting quality to [marijuana] for me… So if I ever need some clarity… or a quantum leap in terms of writing something, it’s a quick way for me to get to it.” Morisette can utilize the right cannabis product for her needs and push through creative boundaries and explore new territories.
Tips for Finding the Perfect Fit
While studying different terpene profiles and cannabinoids is a great way to learn about the effects of cannabis, you also need to consider your physiology. Notably, a cannabis product that works well for one person won’t necessarily do the same with another.
For example, if you are an introverted, anxiety-prone person, using an energetic strain like Diesel for a social situation might not be a good idea. In this case, a mellow Indica CBD hybrid like Cannatonic might be just what you need to feel relaxed and engaged. Yet, a naturally extroverted person would likely enjoy an energetic strain for social situations and need the CBD hybrid to wind down at the end of the day.
If you aren’t sure what cannabis products will work for you, we recommend visiting a credible dispensary with well-trained budtenders. Once you have sound recommendations, always start small when experimenting with new cannabis products. With a bit of careful trial and error, you will likely discover cannabis products that can help you with anything from enhancing your workout to stimulating your sex life.
Summary
Having been on pain management therapies since the age of 17 for my Kyphosis, I now rely solely on concentrated cannabis extracts to manage my pain and keep my Activities of Daily Living at peak performance. Being diagnosed at 17, I was prescribed 1x Hydrocodone per day to manage my pain. By the time I graduated from Pharmacy School, I was taking 18 pills a day (540/month) to manage my pain and the side effects of other medications. It’s been 8 years since I’ve taken a prescribed medication and cannabis and cannabis products have replaced every medication that I was on prior. I’m grateful and humbled to be a key member of a team that produces the very own products I use to manage my health and wellness.
Looking back just a few short years to the genesis of legal cannabis, it’s remarkable to see how far we have come. In the industry’s early days, people didn’t have the luxury to match a specific cannabis product to a particular performance need. Not only was our knowledge of cannabis not sophisticated enough to accomplish this task, but Good Manufacturing Practices (GMPs) were still lacking in the early days.
As our knowledge of cannabis continues to expand, so does our ability to make informed decisions on the products we use. Whether you are a trail runner who enjoys a Sativa before you head to the mountains, or a musician who likes to settle into practice with hybrid flowers, some careful study will lead you to the right products for your performance needs.
During this period of rapid change, it’s exhilarating to see negative stereotypes of lazy cannabis users finally being upended. Even more, it’s incredible to witness pro athletes, high-powered executives, and famous artists not only advocate for legalization but openly promote cannabis as a performance tool.
Dr. Monaco is the Director of Laboratory Operations forCLS Holdings’ newly opened approximately $4 million laboratory, and is responsible for all day-to-day operations inside the North Las Vegas facility. Dr. Monaco brings over 8 years of licensed & regulated cannabis experience, starting back in 2012 when medical marijuana first opened in Arizona, he has held numerous positions, with escalating responsibilities year over year. He graduated from the University of Arizona College of Pharmacy, in Tucson, Arizona, with a Doctor of Pharmacy in 2010.
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 Insights | 7.20.21 | Subculture to Pop Culture: Creating Culturally Relevant Cannabis Brands
In this edition of our NCIA Committee Insights series originally aired on Tuesday, July 20, 2021 we were joined by members of our Marketing & Advertising Committee for a discussion on the importance of creating, cultivating & maintaining cultural relevancy for your cannabis (or CBD) brand. Stick around for the entire conversation as the panel dives deep into specific tools, metrics and methods for both research & analysis of your campaigns during the Q&A segment to close out the program.
As the industry transitions from margins to mainstream, cannabis brands reach wider audiences. With that comes the need to navigate an increasingly complex media landscape to capture consumer attention. Learn how to make your brand more valuable to consumers by understanding their passions, engaging with fans, sharing in cultural events, and participating in social conversations.
Learning Objectives
• Learn what it takes to become a culturally relevant brand through real brand examples presented by the industry marketing experts who built them.
• Understand the risks and rewards of joining cultural conversations and specific considerations for cannabis and CBD brands.
Panelists:
Dana Mason, Brand Director at Cresco Labs
Alexis Mora, Head of Marketing at Harborside
Tara Rozalowsky, VP, Beverages & Edibles at Canopy Growth Corporation
Allison Disney, Partner, Business Strategy, Receptor Brands
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.
The Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) helped to further define the pathway by which “hemp-derived” ingredients can be legally incorporated into food. Since then, hemp-ingredient companies have materialized selling purified cannabinoids that are found naturally-occurring in hemp. Despite the young market, these companies are facing difficult times as the buyers for these ingredients are few and manufacturers mostly compete on price. The GRAS path offers a route out of this conundrum.
What is GRAS?
The Generally Recognized as Safe (GRAS) for food-use pathway was established by the 1958 Food Additives Amendment to the Federal Food, Drug, and Cosmetic Act (FD&C Act). It delineated how substances that are GRAS for their defined conditions of use in food are different from food additives.
Others have previously delved into why firms might consider pursuing GRAS notifications and/or New Dietary Ingredient Notifications (NDIN) independent of hemp and hemp-derived ingredients so I will refrain from wholesale repetition. Two key points on specificity are nonetheless worth repeating: 1) a substance is deemed GRAS for a specific use under specific conditions and 2) a GRAS notification is specific to the company filing the notification.
Why GRAS?
There are a number of practical reasons why firms that produce cannabinoids would seek to pursue the GRAS pathway. Here are five:
Market Expansion
Currently, firms that produce purified hemp cannabinoids are mostly selling their wares to businesses operating in state-regulated delta-9 tetrahydrocannabinol (THC) markets or to operations that may not be in full-compliance with dietary supplement regulations. Almost all firms that produce food products, including beverages, and most dietary supplement manufacturers, will not use ingredients that do not have a history of use in food or that cannot be legally marketed.
For ingredients such as purified hemp cannabinoids that do not have a history of use as articles used for food, the only way to open-up the food, beverage, and dietary supplement markets is via the GRAS/NDIN pathways.
Safety Demonstration
An integral part of any GRAS dossier is the basic demonstration of acceptable risk (cf. safety) for the named substance and impurities. This includes any byproducts that may be introduced by the manufacturing process. Whether one is interested in pursuing a GRAS Notification for submission to FDA or for a self-affirmed GRAS conclusion, the process involves an evaluation of safety for the conditions of use (e.g. serving size, no-observed adverse event level, etc.).
Beyond the ethical necessity of understanding the hazards of a product meant for human consumption, pursuing GRAS helps protect a firm from product liability in the event that harm is created. But more importantly, GRAS helps guard against product liability by seeking to prevent the potential hazard in the first place. That is always good for business.
Avoiding Drug Preemption
FDA has described in numerous forums, including the Administration’s own website, why it has concluded that cannabidiol (CBD) cannot be used as an ingredient in food or dietary supplements. The key is section 201(ff)(3)(B) of the FD&C Act. This section disqualifies an ingredient from use in food or dietary supplement products if the ingredient is 1) an active ingredient in an approved drug or 2) if substantial clinical investigation of the substance as a drug has been conducted AND made public.
While the situation remains unclear for CBD, the only way to avoid a similar murky situation for other cannabinoids (e.g. cannabigerol, CBG) is for those ingredients to be marketed as a food or dietary supplement prior to the public disclosure of clinical trials directed at the development of that substance as a drug.
It is FDA’s position that “legal” marketing entails more than simple inclusion of the substance in marketed products — the substance must have been the subject of GRAS, food-additive, or NDIN pathways, if required, to be legally marketed. To that point, FDA is highly unlikely to conclude that legal marketing includes the marketing of products in state-regulated cannabis systems while THC remains federally illegal.
Side-Stepping Price Wars
The nascent hemp-derived ingredients market is experiencing significant downward price pressure. The reasons are simple. There is currently more supply than demand (see #1 above) and all commercial offerings are essentially generic.
The GRAS pathway is a mechanism out of this me-too trap. A GRAS cannabinoid would be a premium ingredient by virtue of GRAS status alone. Premium ingredients command premium prices. And the types of sophisticated customers that firms like to do business with do not mind paying premium prices for compliance.
Regulatory Intelligence
While we wait on FDA to draft regulations for manufactured hemp-derived products, it is difficult for businesses to make decisions about what products to pursue. Some firms may not care about internal FDA thinking for hemp-related issues like delta-8 THC or proposed New York State in-process hemp material THC limits of 3%, because they are going to seek to exploit the here-and-now.
For forward-looking firms, engaging with FDA through GRAS or other regulated ingredient pathways can help illuminate what lay around the bend. Effectively navigating bends in a fast-paced, regulated marketplace can be the difference between knowing when to brake… and going broke.
How GRAS?
There are a few ways to go about this, but simply asking the question within your company and with your legal and regulatory counsel will help generate more of a groundswell. There are a few hemp- and cannabinoid-specific intricacies that must be navigated in practice, including FDA’s own policies on hemp. But there is no reason why this cannot be done.
EAS Independent Consultant, Brad Douglass, Ph.D., evaluates FDA and FTC compliance of dietary supplement materials including review and audit of dietary supplement labels and labeling. He is experienced in multiple technical, quality, and formulation roles in the dietary supplement and cannabis industries which lends perspective not only regulatory requirements but also the realities of real-world business. Brad’s previous positions include VP of Regulatory Affairs and Director of Advanced Botanical Strategy at the Werc Shop in Los Angeles. He has a doctorate in Organic/Medicinal Chemistry from USC. EAS Consulting Group, a member of the Certified Group of companies, is a global leader in regulatory solutions for industries regulated by FDA, USDA, and other federal and state agencies. Our network of over 150 independent advisors and consultants enables EAS to provide comprehensive consulting, training and auditing services, ensuring proactive regulatory compliance for food, dietary supplements, pharmaceuticals, medical devices, cosmetics, tobacco, hemp and CBD. easconsultinggroup.com
If you represent a firm that creates hemp-derived cannabinoids, are a regulator that has responsibility over products that incorporate non-THC cannabinoids, or are just an interested reader that has been intrigued by this blog post, do not hesitate to reach out to me at bdouglass@easconsultinggroup.com.
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