Marijuana Business Magazine February 2020

Marijuana Business Magazine | February 2020 10 Consistency and Compliance Are Key to CBD Success Stem Holdings executive outlines how federal regulations will impact the hemp industry By Laura Drotleff V ertically integrated cannabis producer Stem Holdings is dedicated to organic production and high-quality standards—attributes the company plans to apply to its new ventures in the hemp industry. Ellen Deutsch, Stem Holdings’ executive vice president and chief operating officer, told Marijuana Business Magazine that hemp and CBD companies must focus on developing brands that are sustainably produced with high-quality, consistent formulations that will gain trust among consumers. That attention to repeatable quality will go a long way to forging trust with regulators as well, Deutsch said. During MJBizCon in Las Vegas, Marijuana Business Magazine sat down with Deutsch, a 20-year veteran of brand building in the food industry, to get her insights on how hemp and CBD companies will fare as new regulations are introduced to the market as well as commonalities she sees with the food industry. What was your reaction to the U.S. Food and Drug Administration (FDA) warning that CBD is not generally recognized as safe (GRAS)? That’s not unusual. It took them 14 years to approve (the natural sweetener) Stevia. So, to me, coming from the food and beverage sector, I respect that the FDA has to conduct its due diligence. Very often, the market will drive faster response times—both positive and negative—whether they’re introducing something to the market or pulling something off the market. In this case, as impatient as we are, we’re going to follow their guidelines. We’re obviously not happy that they’re not moving faster to state that it’s GRAS, but all that means is that we’re going to behave much more urgently because we know the consumer demand is there. (The FDA) works at their own pace, and there is deliberateness; they want to protect the public. We all have to respect what they want to do. We only hope that the FDA will respond to the market conditions responsibly and allow companies to do it the right way, because if they put the regulations in place, then everybody’s got to follow the regulations. With that announcement, the FDA also said it doesn’t have enough data to show that CBD is safe. What happens now? The FDA might really want to have a listening session and listen to the industry and consumers. They’ve done Five Questions | with Ellen Deutsch This is a pragmatic approach that says if we’re going to separate hemp—and we don’t have federal approval of cannabis—we do now have a federal window to start driving hemp. Why would we argue against that?” —Ellen Deutsch Executive vice president and chief operating officer of Stem Holdings