Learn what this growing market segment has to offer.
Myth: Hemp and Marijuana Are the Same Thing
While hemp and marijuana can both be derived from Cannabis sativa, marijuana can also come from other varieties of the same plant. Both products have unique and distinct compositions and usually come from different parts of the plant. Confused? You’re not alone.
Since both agricultural hemp and marijuana are Cannabis sativa, “many people interchangeably consider hemp as marijuana and vice versa. This is not true,” states Sarah Syed, director of marketing at CannaVest Corp., San Diego, CA. “The classification of the two related species make it hard for people to see that they are different.”
Jane Wilson, director of program development at the American Herbal Products Association (AHPA), Silver Spring, MD, points out that there is actually a lot of diversity in the overarching title of “cannabis.” Hemp varieties of cannabis are low in tetrahydrocannabinol (THC) and can be used to make textiles, rope and building materials. “The oil from hemp seed is a nutritionally dense source of essential fatty acids and complete protein,” she states. The same cannot be said of marijuana.
And, Syed makes the point that the plants from which hemp and marijuana are derived have quite different characteristics, even though they are both Cannabis sativa. “Marijuana plants are short and bushy, and have high-THC in the flower,” she explains. “Agricultural hemp grows like bamboo, and has low levels of THC.”
To understand industrial hemp versus marijuana, it’s key to talk about some of the recent history about the sale of hemp-derived products. On October 9, 2001, the Drug Enforcement Administration (DEA) published an Interpretive Rule about the sale of hemp in the Federal Register banning the sale of any hemp products with trace amounts of THC in them.
The Hemp Industries Association and others filed an “Urgent Motion of Stay” and after much back and forth, a key decision was made by the Ninth Circuit in the case of Hemp Industries Assn., v. Drug Enforcement Admin., 357 F.3d 1012 (9th Cir. 2004), which recognized that “non-psychoactive hemp [that] is derived from the ‘mature stalks’ or is ‘oil and cake made from the seeds’ of the Cannabis plant,…fits within the plainly stated exception to the [Controlled Substance Act] definition of marijuana.”
In other words, the DEA cannot completely ban hemp products with THC in them, if they are derived from the stalk and stem of hemp grown outside the United States. Will Kleidon, CEO and founder of Ojai Energetics LLC, Ojai, CA, adds that there may be some changes to these rules in the future, however.
“Some people are saying that the 2014 Farm Bill redefines hemp as the whole plant,” he states, adding that using the flowers and parts of the plant outside the stalk and stem may only be legal for research purposes and not for interstate commerce yet.
Reality: THC Is Key to Understanding Cannabidiol (CBD) Oils
The cannabis plant has more than 80 cannabinoid constituents. In fact, most of them cause no psychotropic effects at all. Says Nicole Smith, founder and CEO, Mary’s Medicinals & Mary’s Nutritionals, Denver, CO, “A common misconception is that all cannabis ‘gets you high.’… Most of the therapeutically beneficial compounds that we can extract from cannabis will not cause any psychotropic effects…It is important that retailers understand that there is a lot more to the cannabis plant than just THC.”
One specific cannabinoid, THC, is vital to understanding the cannabis market, however. Wilson explains this compound is responsible for marijuana’s psychoactive effects. “Retailers in states with medical cannabis laws and/or adult use laws can provide or sell products containing THC, but it remains a substance prohibited under federal law by the Controlled Substances Act,” Wilson states. “Retailers electing to sell products containing THC must have an excellent understanding of the licensing and compliance requirements in their state, as well as to whom they can legally sell or provide products under state law.”
THC content is restricted in legal products like CBD oil. Robert LoMacchio, president of Only Natural, Inc., Island Park, NY, believes that THC is not well understood at all, with some believing CBD oil has psychoactive or intoxicating effects. “The truth is, it is believed to have an anti-psychotic effect and could actually be used for anxiety and stress support. In some individuals, it may have a calming effect on the mind and body,” he states.
According to Kleidon, “The psychoactive threshold is set at 0.3% THC, based on the Farm Bill and interstate standards for hemp.”
Conventional hemp-based CBD oils, LoMacchio adds, are standardized to contain less than that legal limit.
To put this trace amount into perspective, Richard Rose, executive director of the Medicinal Hemp Association, states that marijuana’s THC content can be as high as 25%.
Kleidon notes that 0.3% THC may be a fairly conservative percentage threshold, as some research shows psychoactive thresholds at 1% THC or even higher. Nonetheless, his firm actually uses a far lower threshold in its products: 0.03%. He says his company has a patented technique for turning the fat-soluble ingredient into a water-soluble one, thereby improving absorption rate and bioavailability (estimated at 10x). Therefore, less THC is required.
Kleidon believes that having some THC in hemp-derived CBD oils is key for a product’s bioavailability and efficacy. He is suspicious of CBD oils that are void of any cannabinoids with the belief that it may not be efficacious.
Another interesting point comes from Rose, who says THC is actually not psychoactive in its raw form. “It is not psychoactive until heated (“decarboxylated”) and converted to psychoactive THC,” he states, noting that raw marijuana is about as psychoactive as potatoes or corn. “Same with cannabis. Eat and juice it freely for whole plant acid cannabinoids without the high,” he states.
Myth: Regulators Have Outlawed the Sale of CBD Oils as Supplements
According to Rose, “There has never been one raid or arrest for selling CBD in any store, and the U.S. Food and Drug Administration (FDA) has never said it was illegal or couldn’t be sold.”
But that doesn’t mean FDA has been completely silent about CBD oils sold as dietary supplements. In February 2015, FDA sent several warning letters to several companies telling them that the CBD oils were making unsubstantiated disease claims or they did not contain any CBD at all (according to testing conducted by the agency).
Wilson says it is not unusual for companies selling supplements that are out of compliance to receive warning letters, and no, “The warning letters did not otherwise address the legality of CBD supplement products.”
Syed says that many CBD companies are new to the dietary supplements industry and are unfamiliar with DSHEA and the legal parameters of selling supplements.
She states, “Many CBD companies have been touting health benefits that legally we aren’t able to say based on laws established by the FDA, even if they may be true.”
Syed says her company’s strategy is to focus on education. “We have to help guide the standards of this new category. We are doing what we can to help make sure we can all remain in this space together, touting benefits that we know that are appropriate and legal to say.”
What may have caused some industry members to believe FDA doesn’t like the idea of CBD oils being
sold
as supplements is its Question and Answer webpage on medical marijuana.
Here, says Wilson, “[FDA] stated its position that CBD is not a dietary
ingredient because of the filing of Investigational New Drug (IND)
applications and ongoing clinical trials for its use as a registered
pharmaceutical. AHPA is not aware of any enforcement action taken by FDA
against marketers of CBD supplement products since that position was
made public.”WholeFoods has spoken to some companies that feel this opinion is clear enough to make them reposition CBD-containing dietary supplements to food products instead. LoMacchio’s interpretation of FDA’s viewpoint, for instance, is that “Hemp-based CBD oils must be marketed as a nutritional foods or food additives, not as dietary supplements.” He is hopeful that with additional research, regulators will show full support of the use of CBD oils as dietary supplements.
Smith’s company also chooses to market its products outside the supplements realm. “While industry lawyers have indicated that the referenced letters and Q&A posting are far from a final determination on this issue, we are not offering any CBD supplements or medicines. We never make any claims about these products,” she states, noting that her firm’s products are classified as cosmetics or food products that are rich in high-quality CBD.
It is also possible that FDA’s opinion has made some companies shift from a CBD focus to “hemp oil” or “hemp extract.” Wilson suggests that some CBD oil companies may also have chosen to sell their products in states that have legalized marijuana for medical and adult-use purposes or through licensed dispensaries in these states.
Still others, like Ojai Energetics, believe the sale of CBD oil as a supplement falls within the regulatory framework, provided it is made following FDA’s GMPs for dietary supplements, appropriate analytical testing is conducted and no unsubstantiated disease claims are being made. Ojai Energetics sells CBD oils as supplements and as foods in places like natural products stores and licensed dispensaries.
Rose believes one could make that case that CBD is grandfathered in as a legal dietary ingredient “just like hempseed oil and whole hempseed as a food, and ironically even more-so than shelled hempseed, which was introduced after DSHEA. But just like hempseed and oil, or echinacea and gingko for that matter, companies make health claims at their peril.”
There is another angle to the warning letters and Q&A page. Says Rose, “It appears FDA agrees with what those of us have known for years: Cannabidiol in hemp is not a Controlled Substance. Period. Otherwise, FDA would be talking RICO organization with multiple underlying felonies against the officers of the business.”
Reality: CBD Oil May Throw Drug Testing
According to Kleidon, it is possible that certain individuals who use large amounts of THC-containing products may test positive on urine drug tests. He states, “People who get drug tested and use large amounts of THC products should be careful and use at their own discretion.”
Myth: Cannabis Products Are Only for Pain Relief
For starters, retailers cannot promote cannabis-derived products like CBD oil as pain relievers. This is a disease claim, and not an appropriate way to frame how cannabis products benefit the body.
But without question, supporters are convinced that hemp-derived products bolster optimal health in numerous ways. Kleidon attributes these effects to the human endocannabinoid (EC) system, which was discovered in 1988. “We now believe its function is to regulate homeostasis for the entire body,” he states.
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Merchandising Tip: Hemp in Your Store
Thinking about selling cannabis products in your store? Be sure to educate shoppers about these products during Hemp History Week, which will be held June 6–12, 2016.Sponsored by several industry companies like Dr. Bronner’s, Nature’s Path and Nutiva, Hemp History Week is intended to raise awareness about this market and discuss hemp’s past, present and future in the United States. Events are organized by volunteers across the country. Those who submit an event to organizers are supported with downloadable information as well as Hemp History Week buttons, stickers and t-shirts while supplies last. Top events also receive hemp product samples from sponsors and publicity support. For more information, visit http://hemphistoryweek.com. |
Syed adds that CBD “is capable of affecting nearly every biological process.”
The EC system is a communications system in the brain and body, and it affects many bodily functions such as emotions, movement and more (1). The body naturally produces chemical messengers called cannabinoids to interact with the EC system in a unique fashion. Says Rose, “That means everyone is born to produce ECs naturally, so adding external cannabinoids is just adding more of what we already have in us. Mother’s milk, for instance, is very high in ECs naturally.”
When a postsynaptic neuron is activated, the body makes cannabinoids from certain fat cells present in neurons. When they are released, they travel backward to the presynaptic neuron and attach to cannabinoid receptors. This means cannabinoids can control what happens the next time these cells are activated, limiting how much neurotransmitter is released and how cells send, receive and process messages (1).
Syed believes that CBD can support numerous bodily processes for this reason. “Phytocannabinoids like CBD, of which well over 100 have been found to exist, are plant derivatives that ‘talk’ to just about every major organ system in the body via the ECS, helping restore normal balance and physiologic homeostasis.”
According to Kleidon, cannabinoid receptors are present in the brain, organs, skin, bones, fascia, immune system and digestive system. “Their function is to support homeostasis for the entire body, which in my opinion, is one of the most important systems we have. It’s a master system for all the other systems,” he says.
Supplementing with CBD, he believes, boosts the body’s natural cannabinoid levels. “In my opinion, it’s absolutely vital to supplement and raise natural cannabinoid levels to make sure it’s promoting our bodies’ homeostasis effectively,” Kleidon states.
Smith shares a similar belief that cannabis products should be widely used, and says it is a misconception that cannabis is only used by “a certain type of people.” She states, “Everyone from soccer moms to professional athletes and especially seniors are beginning to explore the benefits of cannabis for varied reasons. We sponsor an ultra-runner who uses our products while training for 100–200 mile marathons—so much for the stereotype of the lazy, out-of-shape stoner!”
Researchers continue to explore the benefits of CBD oil, which may include bone, digestive, eye, respiratory and cognitive health as well as healthy mood. Experiments also suggest, Rose says, that CBD even induces apoptosis in cancer cells and generates new brain cells, though more research is needed before it can be considered to be a treatment. “Every adult human and animal can benefit from cannabinoids,” he believes.
Meanwhile, hemp seed, hemp seed oil and hemp-derived foods are already readily available at many retail stores, and provide “nutrient dense options for consumers interested in trying them,” says Wilson.
Reality: Product Testing Is Critical to this Category
All dietary supplements must be made according to GMPs and undergo responsible analytical testing. Hemp products are no exception.
Kleidon explains that the cannabis plant is a dynamic accumulator, meaning it pulls up heavy metals. If the plant is grown in toxic soil, the plant “cleans the soil” and absorbs the impurities. “That’s not good for a consumption-based product,” he states.
Smith says that for this reason, organic crops from trustworthy suppliers are preferable since there is little chance of pesticides or environmental toxins contaminating the plants.
Kleidon says that it is very important for companies to do third-party testing per batch for heavy metals, microbes, volatile organic compounds as well as for the right cannabinoid and terpene content. “People should know exactly what they’re getting every single time,” he states.
Hemp-derived products that contain CBD shouldn’t scare away retailers—if they are made following GMPs, do not make unsupported claims, undergo proper testing and follow legal sourcing and THC thresholds rules.
“CBD from hemp is considered not unlawful because hemp is exempt from the Controlled Substances Act's definition of marijuana. Our hemp-derived CBD oil products are sold in nearly 400 independent health food stores and growing, so the demand is very real,” Syed states, noting that the dispensary market for hemp-derived CBD “is not nearly as robust as one would think. In fact, it’s growing quite slowly due to a lot of confirmation bias in regards to marijuana.”
Still, retailers should be careful about which products they allow on their shelves. “Like any other emerging industry, retailers need to be knowledgeable about the regulations that apply to cannabis products in their jurisdiction,” says Wilson.
In agreement is LoMacchio, who adds retailers and consumers should investigate the source of their CBD-based products and “be sure they are in fact buying 100% legal product from a reputable and well-established supplier.”
He states, “Unfortunately, there are many unscrupulous fly-by-night companies out there looking to take advantage of all the attention being given to this amazing substance. The consumer needs to do their homework prior to buying any CBD product.”
Industry groups that are knowledgeable about herbs—such as AHPA and the American Botanical Council—can be great sources of information for retailers. Wilson says AHPA has a Cannabis Committee that created Recommendations for Regulators, “which provide a regulatory framework that can be adopted or adapted by states implementing such regulations.
The documents can also be used by the cannabis industry for guidance on best practice in operations for cultivation, manufacturing and dispensing.”
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