(This is an abridged version of a column that appears in the August issue of Marijuana Business Magazine.)
It isn’t just the guys and gals making high-THC products who confront illicit competition. Hemp entrepreneurs see it, too.
The fact was driven home recently when a CBD manufacturer I cover got a phone call from a competitor saying he planned to make CBD in an old chicken coop to undercut his prices.
The worst of it was, there was no one for the scrupulous CBD maker—who’d invested many thousands in a clean and sanitary manufacturing plant—to call to report his dirty neighbor. The health department in his state doesn’t regulate CBD manufacturing, and production guidelines from the U.S. Food and Drug Administration appear to be years away.
Legal But Not Always
It might seem that because the U.S. Congress legalized low-THC cannabis varieties known as hemp, there’s no illicit market for hemp-based products. But the truth is more nuanced.
Hemp is legal, but you can’t grow it without a license—even for personal use. And, as the U.S. Food and Drug Administration keeps reminding us, that agency still has final say on products that we eat, drink, smoke, rub on our skin and even give to pets.
As long as the FDA considers cannabis extracts such as CBD to be drugs that are legal only with a doctor’s prescription—regardless of whether the extract came from marijuana or hemp—everyone making any CBD product for over-the-counter use is operating outside the law.
While mainstream retailers already are carrying topical CBD products with no interference from federal health regulators, even the most expensive and highly vetted skin cream isn’t without legal risk. In other words, any CBD product sold without a doctor’s prescription flouts FDA direction—even if the agency shows little appetite for taking those products off shelves, provided they don’t make wild health claims.
To read more about how the hemp industry fights illicit products, click here.