!-- Global site tag (gtag.js) - Google Analytics --> Marijuana Business Magazine March 2020

Marijuana Business Magazine March 2020

Marijuana Business Magazine | March 2020 60 C BD is currently the fastest- growing segment in the cannabis industry, with new companies jumping into the market almost daily and retailers from big-box chains to mom- and-pops eager to stock their shelves with the hot, in-demand products. But with the U.S. Food and Drug Administration prohibiting CBD companies from making claims about their products’ wellness properties, it hasn’t been easy for brands to set themselves apart through marketing while remaining in compliance with federal authorities. Still, some CBD brands have figured out how to promote their products and gain consumer trust without taking risks that could harm their businesses by employing three strategies: • Obtaining production certifications. • Promoting full product transparency. • Educating retail associates and consumers with demonstrations. GET CERTIFIED Hemp’s status as a federally legal crop in the United States has allowed producers to participate in government programs such as the U.S Department of Agriculture’s Certified Organic program. For sustainability-minded consumers who care about how their hemp products are produced, the label makes a big difference, according to Dan Dolgin, co-founder of JD Farms in Eaton, New York. “You see all these symbols on differ- ent packages and wonder if they mean anything or if brands try to collect them,” Dolgin said. “But consumers are becoming more educated and looking for various (certifications).” Dolgin’s farm, which produces 2,500 acres of certified organic pastured livestock and forage crops, pursued organic hemp certification as an extension of its brand, first starting with the Eaton Hemp line of natural hemp grain snack products in April 2019 and then extending to certified organic full- spectrum CBD tinctures and topicals in November 2019. JD Farms also holds gluten-free, kosher and Non-GMO Project Verified certifications for its hemp snack products—labels that increase consumer confidence, Dolgin said. But certifications come with a higher cost all the way through the supply chain, which is why consumers end up paying a premium for these items. “You’re limited in terms of co-packers and manufacturers who have all those capabilities and certifications—and they’re not cheap,” costing cultivators tens of thousands to produce, Dolgin said. Other brands, such as hemp and CBD company HempFusion of Denver and Irvine, California-based PearlCBD, are paying for certifications from the U.S. Food and Drug Administration, which is not the same as receiving FDA approval. Rather, it’s an expensive voluntary process called the self-affirmation GRAS (generally recognized as safe) certification that brands can invest in to verify their products’ safety. “We’ve done a complete toxicological hurdle to verify that the raw material we use in every one of our products that contains cannabinoids is safe,” said HempFusion co-founder and President Jason Mitchell. The process includes peer-review and publishing of the brand’s toxicology work, he added. But it could be confusing for consumers, who don’t know the difference between FDA approval and certification. The FDA’s newly appointed commissioner, Stephen Hahn, said in February that addressing CBD concerns—and perhaps a broader discussion about dietary supplements that push legal boundaries by making unsubstantiated health claims—is on his priority list for 2020. One concern, he said, is consumers’ misconception that the substance is FDA approved. BE TRANSPARENT Bad actors selling ineffective, low-quality products—and, in some cases, products that don’t contain CBD at all—have run the risk of turning off consumers and making it more difficult for legitimate brands to gain trust. Marketing with Moxie By Laura Drotleff Eaton Hemp pursued organic certification for its CBD products. Courtesy Photo & Marketing Art of The Branding Regulatory delay and restrictions are causing marketing roadblocks for CBD brands