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Why Are CBD Products Exploding?

Why Are CBD Products Exploding?

It’s a unique compound that has Facebook moms and media outlets mystified. But why is CBD all the sudden exploding?

There’s a few reasons CBD products are becoming more popular every day, especially in the United States. The first has already been mentioned; the media. But we’ll get to that later. Let’s start with the recent legality change of CBD.

The 2018 Farm Bill

CBD is a chemical compound found only in the cannabis plant. It is present in almost all varieties of cannabis, even if in just trace amounts. This means that CBD is also found in hemp.

Hemp has had a bumpy relationship with the U.S. government since the early 1900s. While the hemp industry was huge in the 1920s, the paper industry was quickly rising, and couldn’t compete, starting a propaganda campaign eventually leading to the criminalization of hemp and cannabis.

At least, that’s the theory.

While hemp was considered federally illegal much like cannabis (they are the same thing), states could still pass their own laws regarding hemp, much like states now that have legal cannabis laws. Colorado even added an amendment to their state constitution, giving citizens the right the grow hemp.

But in 2018, it all changed. The 2018 Farm Bill fully legalized “industrial hemp” at the federal level.

The Legalization of Industrial Hemp

What is industrial hemp? What makes it different from “regular” hemp? This is where some people get caught up.

While hemp and cannabis are the same thing, any cannabis variety that gets you “high” contains high amounts of THC, the psychoactive compound in cannabis. Most cannabis strains you can get in the legal market are bred to have as high THC levels as possible, with little focus on the other compounds.

Hemp has always been seen as the weedy, wild version of cannabis. It isn’t bred to have high THC, but through its evolution of enduring tough climates in the wild, hemp varieties naturally have higher CBD levels. However, not all hemp is legal, hence the term “industrial hemp”.

Industrial hemp is strictly cannabis that has a THC content of .3% or less. Anything above is still illegal. So even though .4 or .5% THC wouldn’t have any real affect on a person, it is considered psychoactive cannabis, still illegal and classified as a Schedule 1 narcotic under the Controlled Substances Act of 1970.

So, now industrial hemp is legal, as long as it doesn’t surpass .3% THC. However there is no regulation for CBD at the moment. This has opened up quite a lucrative opportunity for cannabis industry entrepreneurs and farmers alike.

The Rise of CBD Products

CBD started out slow. Products existed, such as hemp seed oil and other hemp derived products that contained CBD, but little was known about the actual benefits of CBD. Then came Charlotte’s Web.

Charlotte was a little girl in California suffering from intense seizures, sometimes having dozens a day to the point she was incapacitated. After a cannabis farm in Northern California developed a CBD specific strain that had extremely low THC, but high CBD, they turned it into a digestible tincture for Charlotte.

Her seizures all but stopped. This is where the snowball started rolling. 

More and more people started treating their children’s epilepsy with CBD, then more studies came out showing CBD potential in aiding with chronic pain. With its growing social acceptance,  plus the added boost of the Farm Bill, more CBD businesses are opening their doors.

While it is still currently unregulated, there is an entire CBD marketplace that has developed online. From Amazon to CBD wholesaler websites, anybody can buy CBD products online with a credit card. With massive availability and a growing understanding of its benefits, all CBD needed to push over the edge was some media attention.

cbd products are becoming popular in the media

The Today Show covering the extraction of CBD from cannabis in a March 2019 segment.

The Influence Machine

To say that modern media outlets in America carry a large swath of influence would be a massive understatement. And with more news outlets than ever before in history accessible with just a few clicks, people are ingesting more information and influential content than ever before.

With the passing of the Farm Bill and increased public awareness about the benefits of CBD, people started talking online. What started as a niche group of mostly middle aged women sharing their experiences of helping their arthritis pain with a little CBD ointment, spread across the web like a bushfire.

Before long, CNN was covering the rise of CBD products. Soon after that, so was The Washington post. As did NBC, CBS, and even Fox News.

With the media machine pushing it into the mainstream, and social media platforms like Facebook, Twitter and Instagram flush with CBD anecdotes and articles, its rise was inevitable.

The question now is, will it last?

The Future of CBD Products

The future for CBD is still vague. It isn’t currently regulated by the FDA, and its only claim to legality lies within the rulings of the 2018 Farm Bill. There have already been plenty of issues with CBD and industrial hemp since legalization, and most likely, there won’t be any shortage of issues throughout 2019.

That doesn’t mean the market isn’t growing. In fact, the CBD industry is growing at a rate that could put it on pace to surpass legal cannabis by 2022. With that said, regardless of new regulations or restrictions, the future of CBD products is most likely bright, and green.

Want to learn more about the rise of CBD and the legal hemp industry? Check out this episode of The Real Dirt Podcast, featuring Graham Carlson of Charlotte’s Web, Mike Leago of the International Hemp Exchange, and Hollis Carter of Lefty’s Hemp Co.

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Los Angeles cannabis permit problems

Los Angeles cannabis permit problems

California had the right idea when they legalized cannabis in 2017. But with incredible delays, lack of resources and a surplus of entrepreneurs hoping to make a name for themselves in the industry, the state and cities like Los Angeles are struggling.

Over four million people live in the city of Los Angeles. It’s no surprise then, that the inhabitants would try to work in the new legal system. But it hasn’t been as simple, or profitable, as originally projected.

California is the biggest state in the country, as well as the largest supplier of cannabis. When the state legalized, it virtually leveled the main supplier in the state; the private market.

Unprepared, Understaffed, Overwhelmed

While strict requirements, exorbitant application fees and an originally-one-man advisory board made the legal industry all but unattainable for smaller growers and farms in the state, the process was made much simpler for retailers. Medical retailers, that is.

In Los Angeles, priority was given to owners of retail medical dispensaries in the application process. Since they already had the location, the storefront and the brand, all that was needed was a transition to the new regulatory requirements for recreational cannabis.

Second in line for application review came those that legally supplied the medical cannabis to the dispensaries in Los Angeles. It makes sense because once the retail locations are transitioned to recreational, they can continue to use the same growers and suppliers, maintaining their business relationships in the new, legal industry, with minimal delay. At least, that’s how it went on paper.

In reality, the situation isn’t going so smoothly. In February of 2018, the city gave out about 180 temporary permits to allow medical dispensaries to operate recreationally. For the growers and suppliers, the same was to be done by April. Those temporary permits weren’t issued until the end of August.

This shouldn’t be surprising considering the total lack of manpower the Department of Cannabis Regulation had then and now. The directory board of the department started with just one member. Now, over a year since legalization, there are only 13 members on the board. Now imagine those 13 people handling every single application process for the hundreds of retailers, growers and processors.

The picture starts to become pretty clear. As if the city didn’t have enough on its plate, it also included a social equity program in its local laws, aimed at helping repair some of the damage done by the war on drugs.

Los Angeles Social Equity Program

This is where the state of California and the city of Los Angeles could have set a great precedent for new and current legal industries. The city established a social equity program that would give priority to those most negatively affected by the drug war prior to legalization.

People of color in the city were disproportionately arrested for small drug crimes involving cannabis compared to their white counterparts, despite statistical data showing no difference in cannabis use between the two groups. This group and other minority groups negatively impacted by the drug war were meant to be some of the first allowed into the new, legal industry.

Unfortunately that isn’t how it has worked out for Los Angeles. While the social equity program gave priority to these minority groups, the Department of Cannabis Regulation gave higher priority to already-established medical retailers, growers and processors. And with the — to put it mildly — severe lag of the application process, these groups still haven’t had one single approval.

Mind you these are people who do not currently have a business, and want to open one in the recreational market. Many leapt for storefront dispensary locations, despite the low availability. Los Angeles put a cap on how many storefronts can be opened in a neighborhood, in addition to strict requirements for location (e.g. can’t be near schools, other dispensaries, public parks), greatly limiting the options for would-be entrepreneurs.

When it comes to timeframes, the city hasn’t been shy on the issue either;

“Bringing cannabis above ground is an incredibly complex process, and L.A. is doing it on an unprecedented scale,” Alex Comisar, a spokesman for Mayor Eric Garcetti, said in a statement. “Our goal is to do this the right way, not the quick way or the easy way — and we’ve always been very clear about that.”

It’s a rough road ahead

Los Angeles is way behind schedule. It’s a fact. And the local government isn’t doing much to speed up the process. The Department of Cannabis Regulation currently sits at 13 members. Multiple additional position have been filed, but due to the slow city hiring process, anyone new has yet to be hired.

The head of the city council Herb Wesson insists that everything will basically sort itself out. Even with reports of many potential entrepreneurs leaving the city to open up shop elsewhere, Wesson isn’t fazed. “I have no time for folks that want to go somewhere else. Let ’em.”

Instead, as months have passed, industry groups and consultants have complained that many cannabis entrepreneurs are stuck paying steep prices for multiyear leases, after landlords hiked prices on eligible storefronts. 

“You had a lot of people who followed the city’s guidance and signed leases,” paying upwards of $10,000 a month in rent, said Larry Mondragon, vice president of zoning and entitlements for Craig Fry & Associates, a consulting firm helping cannabis businesses. “People are holding onto leases, paying exorbitant checks, not even knowing when they’re able to turn in applications to the city.”

Equity applicants are supposed to get a helping hand from the city through “business, licensing and compliance assistance.” But more than a year after recreational cannabis sales became legal, there are no city programs providing such aid.

So far, the only funding the city has approved for social equity is $250,000 for a fee deferral program. Department officials say they now are seeking more than $4 million for the program, hoping to roll out support services, such as business development training, no sooner than July.

Los Angeles needs to step up. California needs to step up. There are a lot of problems in the state with little to no solutions. Something needs to be done at the city level to change that. How, and even if that will be done, is still unknown.

Legal Hemp or Illegal Cannabis?

Legal Hemp or Illegal Cannabis?

Legal hemp may have been included in the 2018 Farm Bill, but that hasn’t stopped some serious issues from arising since its passing.

Farmers everywhere rejoiced when legal hemp was signed into the Farm Bill at the end of 2018. But the bill has yet to actually take effect, and it could be another year before federal law surrounding hemp actually takes hold.

This delay hasn’t stopped many from jumping in head first to the hemp industry in an attempt to get ahead of the curve. Unfortunately, state governments aren’t as eager to jump in.

Oklahoma Hemp Bust

In early January Andrew Ross from Aurora, CO was transporting several thousand pounds of what he claimed to be industrial hemp to Oklahoma to Colorado. Ross’ semi-truck was pulled over in Pawhuska after running a red light. 

The officer smelled what he claimed to be cannabis as he approached Ross’ van, at which point Ross told him that they were the security for the semi-truck transporting hemp. Ross was then instructed to open the semi-truck, revealing over 20 bags of the green plant.

After conducting a field test, which tests for any amount of THC, the officer believed the plants to be cannabis and not hemp. However, legal hemp can have up to .3% THC. This has led to a lengthy delay in the case as the local police have had to send the plants to be lab-tested, which was additionally delayed by the recent government shutdown.

Unfortunately, during this time, two of the four who were arrested — Ross and one other in the van and another two in the semi-truck were arrested in total — have remained in prison since they couldn’t afford bail. They most likely won’t be released until the conclusive results of the tests come back.

Legal Hemp In Oklahoma

Industrial hemp was legal in Oklahoma before the Farm Bill was signed. This means that the hemp Ross claims to be transporting, is perfectly legal in the state. But that isn’t the problem here.

The issue is that law enforcement and government officials alike cannot confidently judge the difference between “legal hemp” and “illegal cannabis”. When field tests will always say cannabis if there is any trace of THC, no police officer can realistically judge a situation in which they smell what they think is cannabis, even if hemp smells exactly the same.

A similar issue has arose in Idaho, where there are no such hemp laws on the books, and the government is in no hurry to abide by the new Farm Bill.

Biggest Bust In History (?)

Law enforcement officials are saying it could be the biggest cannabis bust in state history. If it is cannabis that they found in the back of Dennis Palamarchuk’s semi-truck, that is.

During a routine highway semi-truck safety inspection, the conducting officer smelled strong odor of what they suspected to be cannabis. Much like Ross’ story, the truck statement claimed that the 31 bags in the truck all contained industrial hemp. However, since this happened in Idaho, where there are no laws on the books regarding hemp at the state level, it has caused more problems.

legal hemp bust in oklahoma and idaho

Over 6,000 pounds of hemp that supposedly tested positive for THC. The amount of THC has not been specified.
Photo courtesy of Idaho State Police

According to the Farm Bill, states that do not have hemp laws on the state level have two options. Propose a plan to the federal government for their own hemp laws that still stay within federal guidelines, or follow federal law on the state level. Idaho has neither submitted a plan nor assumed the laws put forth in the Farm Bill as of yet.

This means that whether or not Palamarchuk was transporting hemp or cannabis is irrelevant. In Idaho, both are currently still illegal. Thus, Dennis was arrested for trafficking, and as it stands, police have seized over 7,000 pounds of what they consider to be cannabis. While testing positively as hemp may help Dennis legally, it appears that there is little to be done for him in this situation.

What Happens Next?

These two separate but similar issues have highlighted serious problems in law enforcement’s ability to recognize and distinguish differences between now federally legal hemp, and illegal cannabis. Current technology does not allow police officers conducting a normal stop and search to confidently judge the results of a field test.

As laws change, state governments will have no choice but to follow federal law in some manner and allow transportation of industrial hemp. How the states will enforce this while keeping hemp separate from cannabis is yet to be seen. If these two busts are any sign of things to come, however, we have a long way to go.

Oklahoma Medical Marijuana Rundown

Oklahoma Medical Marijuana Rundown

In June of 2018, Oklahoma surprised the country. The state voted to legalize medical marijuana.

Oklahoma medical marijuana State Question 788 was passed by the majority of people in the state, allowing the people to consume, grow and if licensed, sell medical marijuana.

The program is run by the Oklahoma Medical Marijuana Authority (OMMA), in conjunction with the Oklahoma State Department of Health to ensure regulatory oversight. Compared to other medical marijuana states, the Oklahoma medical marijuana program is pretty progressive.

Oklahoma Medical Marijuana Laws

Submitted as State Question 788, the people of Oklahoma passed a new section of law to be added to the Oklahoma Statutes. Section 420 of Title 63 permits an individual to posses a state issued medical marijuana license.

An Oklahoman with a medical marijuana license is allowed the following:

  • To consume marijuana legally
  • To possess up to 3 ounces of marijuana on their person
  • To possess 6 mature marijuana plants
  • To possess 6 seedling plants
  • To possess 1 ounce of concentrates
  • To possess 72 ounces of edibles, and
  • To possess up to 8 ounces of marijuana in their residence.

However there were also changes to how possession of marijuana is handled in general. Being in possession of up to an ounce and half without a medical marijuana license is punishable by a $400 fine and a misdemeanor, if the subject can provide a medical condition. How strictly this will be enforced is yet to be seen.

Individual and Business Licensing

Licenses for both Oklahoma medical marijuana patients and businesses are obtained through a straight forward application process. The applications are easily accessible on the OMMA page of the Oklahoma government website. It costs $200 for an individual to apply for a medical marijuana license, and only $20 to apply for those on Medicare and Medicaid.

To apply for dispensary, commercial growing, or processing permits, one must pay an application fee of $2,500. The requirements for obtaining these three business licenses are the same:

  • Applicants must be 25 or older
  • Applicants applying as an individual must show residency in the state of Oklahoma
  • All applying members, managers and board members are Oklahoma residents
  • An applicant can show ownership of non-Oklahoma residents, but that percentage of ownership cannot exceed 25%
  • Applicants must be registered to conduct business in Oklahoma
  • Applicants must disclose all ownership
  • Applicants with nonviolent felony convictions in the last two (2) years, or applicants with any other felony conviction in five (5) years, inmates or anybody currently incarcerated is not qualified for a license.

In addition to these requirements, retailers must submit monthly reports to the Department of Health to keep track of weight sold, revenue and taxes. Commercial growers are restricted to only selling cannabis wholesale to licensed retailers. Growers will also submit monthly reports, detailing monthly yields, amount harvested in pounds, drying or dried marijuana on hand, amount sold to processors, amount of waste in pounds and more. However, there is no limit on the amount of cannabis a licensed grower can grow.

Processors are no different, and much submit a monthly report detailing the amount of marijuana purchased, amount of waste and wholesale sales to the Oklahoma Department of Health.

Oklahoma Medical Marijuana Applications

As of December 2018, over 22,000 people have been approved for personal Oklahoma medical marijuana licenses, 785 dispensaries have been licensed, and there are more than 1,200 licensed commercial growers and 270 licensed processors in the state. It hasn’t even been a year since Question 788 was approved, and Oklahoma is already kickstarting its medical marijuana industry.

Growers are pumping out close to 50 pounds a month already thanks to the regulation’s strict deadlines included by the people of Oklahoma that forced the state to accept applications within 60 days of Question 788’s passing. The state has already brought in $7.5 million from registration fees, and now that dispensaries have opened, the 7% sales tax will begin getting collected for additional revenue.

Is Oklahoma Ahead of The Curve?

Oklahoma medical marijuana has taken off more quickly than any other state program in the country. Less than 6 months after being passed, growers are growing, dispensaries are selling, and the people of Oklahoma are buying.

It’s possible that Oklahoma may be moving too fast. With no limit on how much a licensed grower can produce, the state may end up facing a similar issue to Oregon. Having too much marijuana and not enough people to buyl it might result in a collapse of the marketplace as the price of medical marijuana drops.

However as a medical marijuana program as opposed to Oregon’s recreational market, Oklahoma medical marijuana will be more strictly regulated by the Department of Health, which will hopefully push growers toward quality over quantity. 

At the rate the Oklahoma medical marijuana industry is moving, it won’t be long before we see the first results of the new industry. 

Hemp vs Canabis CBD

Hemp vs Canabis CBD

If you’re familiar with CBD and its medicinal benefits, you may be wondering how to get it, or even more so, where it comes from in the first place.

If you have no idea what we mean when we say CBD, check out our starter guide to CBD explaining the basics.

CBD is most commonly found in industrial hemp and cannabis plants. But is there really a difference between the two? It isn’t so much that CBD from hemp is better or worse than CBD from cannabis, but how hemp is grown compared to cannabis makes a big difference.

Hemp vs Cannabis

Traditionally, Hemp is grown on an industrial scale, hence the name industrial hemp. Plants grow closer together, forcing them to grow up instead of out.

In contrast, cannabis is grown more spaced out which allows the leaves and flowers to fan out and gain potency. While hemp is mainly used for its stalks in uses from making paper to clothing, cannabis is bred much differently.

The biggest difference between hemp and cannabis is the THC content. Hemp is grown to have minimal THC. To legally be considered hemp, that amount must be no more than .3%.

Cannabis on the other hand is usually grown to have as much THC as possible in order to provide its maximum psychotropic effects, AKA the “high”.

Hemp Legality

So, a hemp plant with a THC content of .5% would be considered psychotropic cannabis and therefore federally illegal. This is despite the fact that such a low THC content would have little to no effect on the average person.

In fact, industrial hemp was made legal in 2009 by the Industrial Hemp Farming Act. But if you couldn’t guess by the name of the bill, this only applies to industrially grown hemp.

This “legal” hemp was only permitted for use by research facilities or higher education research. So unless the hemp was being grown on an industrial scale for the sole purpose of higher education research, hemp was still illegal.

However in December of 2018 the Agricultural Act of 2018, commonly known as the Farm Bill, was passed by the House, Senate and President Donald Trump. This new farm bill changes the definitions of industrial hemp.

This means that hemp will no longer just be grown for research purposes, but an actual commercial marketplace can be established.

Hemp CBD vs Cannabis CBD

Now that hemp has been legalized, the already blurred lines separating hemp CBD and cannabis CBD from a legality standpoint have become even more blurry. However this is actually good for the consumer.

Hemp traditionally carries more CBD, whereas cannabis carries more THC. Through crossbreeding of low-THC cannabis strains with high-CBD hemp strains, new strains are being created that look, smell and taste like regular cannabis, but have .3% or less.

Soon, hemp flower will look identical to cannabis flower, and more people will start to consume high CBD flower as much as THC flower. Industrial hemp for now will still be grown mostly on large scale for mass production of CBD medications derived from the whole plant. 

The reality is hemp and cannabis are the same plant, they have just been bred in different ways. Now that hemp is legal, the two will start to merge again, and we might even see some new breeds start to appear. It’s an exciting time to look into hemp.

2018 Farm Bill Explained

2018 Farm Bill Explained

The 2018 Farm Bill has passed the House and Senate. After Trump signs, Industrial Hemp will be federally legal.

UPDATE: This article was written just before Trump’s signing. The article has now been updated to reflect the new status of the 2018 Farm Bill.

The 2018 Farm Bill has been signed by Donald Trump and passed into law, making Industrial Hemp federally legal. You might be thinking that it already was legal due to the 2009 Farm Bill, but not in the way you think.

This new bill (legally titled the Agriculture Improvement Act of 2018) differs from the 2014 Farm Bill in a few ways. The biggest difference being the new definition of Industrial Hemp being added.

2014 Farm Bill

Five years ago, the 2014 Farm Bill was passed, which defined Industrial Hemp as, “the plant Cannabis Sativa L., and any part of such plant, whether growing or not, with a delta-9 THC concentration of not more than 0.3% (on a dry weight basis).”

The 2014 bill also distinguished between marijuana and hemp for the first time. The laws enacted by the 2014 Farm Bill allowed for the cultivation of industrial hemp for research purposes, as part of an agricultural program, or as permitted by state law.

Also allowed under the previous bill was the study of the “marketing of Industrial Hemp”. The vagueness of this clause allowed states to set up agricultural pilot programs that also permitted commercial sales of industrial hemp. However, interstate commercial activity is not expressly permitted under the 2014 Farm Bill.

The 2018 Farm Bill changes that too.

2018 Farm Bill

The 2018 Farm Bill drastically alters the current legal landscape governing Industrial Hemp production in the United States.

First, the 2018 Farm Bill defines “hemp”as any part of the plant, “including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not,” with a THC concentration of not more than 0.3% THC on a dry weight basis. The 2018 Farm Bill also amends the CSA (Controlled Substances Act) to exclude “hemp” from the definition of “marihuana.”

The 2018 Bill also creates a specific exemption in the CSA for THC found in hemp. These expanded definitions and corresponding exemptions from the CSA could also apply to imported hemp. Meaning the new bill will allow for the importation and exportation of industrial hemp to and from the United States.

Unfortunately those convicted of a felony involving a controlled substance are barred from participating in any hemp program established under the 2018 Farm Bill. While lawmakers were hopeful that this would be revised in the final version of the bill, it appears that it wasn’t.

Federal Regulation of Industrial Hemp

The 2018 Farm Bill also amends the Agricultural Marketing Act of 1946 (“AMA”) to allow for federally-sanctioned hemp production under the authority of the USDA. This means the USDA is now the sole federal regulatory agency overseeing hemp production in the United States.

However, states will be able to submit their own proposals to the USDA for state-regulated programs. These programs must stay within the confines of the USDA requirements, including:

  • a practice to maintain relevant information regarding land on which hemp is produced in the applicable jurisdiction;
  • a procedure for testing THC concentration levels of hemp produced in the applicable jurisdiction;
  • a procedure for the effective disposal of products produced in violation of the statute;
  • a procedure to comply with the statutory enforcement procedures;
  • a procedure for conducting annual inspections to verify that hemp is not produced in violation of the statute; and
  • other practices or procedures as the Secretary of Agriculture considers to be appropriate and consistent with the statute.

Should a state decide not to submit a plan for its own regulatory procedures, that state can simply apply for licensure directly through the USDA. In states with approved plans, all those participating in the program must adhere to the state laws that are established.

In addition, the 2018 Farm Bill explicitly states that “nothing in this title authorizes interference with the interstate commerce of hemp.” As such, the 2018 Farm Bill will open up clear legal pathways to interstate transport in the United States. 

The 2018 bill also requires the USDA to conduct a study within 120-days of enactment to determine the economic viability of the domestic production and sale of hemp.

With the 2018 Farm Bill now signed and passed into law, it’s a matter of time before the hemp industry explodes. However, the 2014 Farm Bill will remain in effect until a solidified plan is established by the USDA, which will most likely take a year. 

So don’t expect to see hemp products popping up at your local grocery store any time soon.

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