Marijuana Business Magazine September 2018

Federal laws about CBD are confusing and may be changing quickly. The U.S. Drug Enforcement Admin- istration said in 2016 that CBD is a controlled substance, same as marijuana. However, the ban doesn’t apply to CBD extracted from legal hemp. And in July, the FDA approved a CBD treatment for epilepsy, throwing the can- nabinoid’s legal status into further disarray. That’s because even as the FDA lauded CBD’s use as a medical treatment, agency officials added a warning: “We remain con- cerned about the proliferation and illegal marketing of unapproved CBD-containing products with unproven medical claims.” Confused?The mixed messages mean that cannabis entrepreneurs have to dodge legal landmines to capitalize on the boom. “The main takeaway is compli- ance: You’ve got to follow all the rules and do everything right,” said Shawn Hauser, a Denver attorney who special- izes in hemp law. Bob Hoban, a Denver attorney who argued against the DEA’s rule on CBD in an unsuccessful challenge earlier this year, says CBD producers have a path to avoid- ing legal complications. That is, hemp growers must follow state laws that allow CBD production for market research, all while keeping an eye on changing federal rules. “This has never been legal in all 50 states,”Hoban explained of CBD. “It’s federally legal under the Farm Bill. It pre-empts the Controlled Substances Act. But (the Farm Bill) gives states the rights to follow that federal lead or do their own thing.” Too Good to Last? Another challenge facing CBD pro- ducers is inevitable: competition as more companies rush CBD products to market and more states allow hemp production. “A lot of farmers are seeing dollar signs,” said Scot Waring, lab and extrac- tion director for The Vermont Hemp Co. in Montpelier, which makes CBD oils. ON THE CAP¬TAL¬Z¬NG CBD SURGE Breakdown of Hemp-Derived CBD Products in the United States in 2018 Source: Brightfield Group 39% Tinctures 19% Topicals 17% Capsules 12% Vape oil/ Cartridges 6% Gummies 5% Other edibles 2% Industrial Hemp 1% Syrups 1% Dabs Estimated Sales of Hemp-Derived CBD in the United States by 2020 $1B Three sources estimated the size of the hemp-derived CBD market in the United States in 2020. They come from: Hemp Journal, online research portal Statista and cannabis research firm Brightfield Group. Brightfield assumes passage of the 2018 Farm Bill will pave the way for the outright legalization of hemp extracts and an “explosion” in CBD product sales. Estimated Market Size $12B Hemp Business Journal Statista Brightfield Group $450M $395M $11.2B September 2018 • Marijuana Business Magazine • 63

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