Episode 105 – Hemp-Derived Cannabinoids



Joe: On this episode of the "CPG & CBD University Podcast," we're talking Delta-8 and other hemp-derived cannabinoids and what it means for consumers and retailers when shopping at their favorite retailer and online. This is the "CPG & CBD University Podcast," and it starts right now.

I'm Joe Agostinelli, host of the "CPG & CBD University Podcast." And if you are returning listener, welcome back to our podcast. And if you're a new listener, we are glad you found us on your podcast platform of choice. And don't forget, you can catch full video episodes on YouTube each week. And wherever you get your podcasts, we ask that you subscribe to our podcast and get notifications when new episodes are published as I mentioned each week.

It's been one of the hottest topics, excuse me, of 2021 that happened. Here we are at the end of 2021. We're talking other cannabinoid products outside of CBD. And my guest today on the podcast is the vice president of sales, Vince Gillen. Vince, welcome back to the podcast as always.

Vince: Thanks, Joe. Good to be here.

Joe: Lots to talk about. So let's get right to it. It was just about this time last year at the end of 2020, we were starting to see a new wave of hemp products outside of CBD. These still have a lot of momentum and consumers continue to see them, and they seem more intrigued now than at the end of 2020.

Vince: Right. Yeah. And I think there was a lot of confusion when CBD first came out in the whole cannabinoid space with, you know, where is CBD from, you know, what else is in hemp. And you saw first CBG, CBN those type of cannabinoids come out and be added in with CBD. And then you saw the emergence of Delta-8 towards the middle of last year, which also hemp-derived, that gained a ton of popularity, and really is one that took off much like CBD did a few years ago.

Joe: And you were on the road this year, as we've covered on past episodes, meeting with distributors and retailers. What's the buzz about Delta-8 on the retail side?

Vince: Well, so the buzz on the retail side is it's been what the consumers have been buying over and over, and over again. So it really rejuvenated, I think, the hemp category when CBD kind of slowed down with the pandemic and probably just a lot of brands out there, and again, there was that confusion of what works, what doesn't.

And with Delta-8, you had a really a huge attraction and consumer interest. And then it helped people really understand and get educated on what's from hemp, you know, why is this useful? Why should I take it? So, and then, you know, one thing that we've seen recently is there's been a huge push from, you know, veterans and people that have been coming out saying, "Hey, I use Delta-8 hemp-derived THC products," and they love them.

And I think that just really has transpired into something that's like a movement of other hemp cannabinoid products, even though they've been in the market. So, you know, Delta-8 has just really taken off. And again, it reminds me very much like CBD did back in 2018, 2019.

Joe: And it was at those trade shows earlier this year where you were able to show off some of the new Delta-8 products. So from our in-house brands, both Hemp Bombs and Mystic Labs. So what's the feedback been on those from distributors who have decided to add them to their inventory?

Vince: So first, we launched Mystic Labs, obviously last year, and we wanted to keep that. We did Delta-8 products, specifically on our Mystic Labs, just to not have that confusion with CBD and Hemp Bombs and just kind of see how it went. And then we did add it towards the beginning of the year, the Delta-8 products to the Hemp Bombs' lineup.

And, you know, the reception was great. We were a little bit late, I would say. There was a lot of cartridges and disposable products in the market. So we were late on that. However, we were probably one of the first to have gummies out there, which that's what we specialize in. And really now we have 10 flavors for Mystic Labs, 5 flavors for Hemp Bombs, and then each one has a 5 count, a 12 count, a 50 count. And then we actually added a higher potency skew as well for those brands too.

So it's been really good. And the trade shows have really turned into a, again, hemp-derived cannabinoid show. You go there and it's not just CBD, it's Delta-8, it's CBG, CBN, Delta-10, other products that are out there. And it's been really great.

I think it's been huge for retailers. It's been very good for distributors that have really stayed in the fight with trying to push for whatever the popular brands are to be in retail. And again, it goes back to gummies being, you know, the main staple product for people that...you know, that's their main way they wanna take it, the delivery method.

Joe: And we've talked about gummies being a top delivery method and, you know, on that same token as the market share leader in CBD, how are category managers able to take advantage of the other cannabinoids when adding to their CBD inventory?

Vince: So in convenience specifically, Hemp Bombs is still leader. We go between a 59% to 65% market share month over month. And we'll probably finish the year, you know, on average at 59%. But unfortunately, that's not...every month the sales aren't increasing.

So what...CBD is a steady category and how...you know, if you are a category manager looking to replace maybe some slower moving skews, you bring in other cannabinoids like Delta-8, and suddenly you have a whole hemp category that's outperforming, you know, what you were doing six months a year prior.

And I think you're gonna see that grow as there's more of an attraction and maybe you'll see the overall space on the shelf for these hemp-derived cannabinoids grow outside of just CBD because before maybe you had 10 skews of CBD, you add...maybe you take away 2 of those, add 5 Delta-8, and whatever else you bring in. And I think it's gonna be great for the retail industry.

Joe: And going back to the Hemp Bombs, Delta-8 gummies, as we talked about, those gummies were chosen as the retailer choice, best new product in the CBD, Hemp edible category this year, an award that you had the privilege to receive while at NACS. How important is that for retailers looking to add to their inventory?

Vince: You know, I think with the awards, it's just credibility. There's companies that probably get awards that don't necessarily deserve them. You know, maybe it's just the voting, the way it works, but with this one, in particular, it was neat that we talked about taste, price-point packaging. And then I do think they looked at brand awareness, hence the reason Hemp Bombs won that award.

And again, it gives credibility, especially when you look at these other cannabinoids derived from hemp. You wanna buy product from manufacturers that are practicing good manufacturing practices. They're safe. There is label requirements, third-party testing, all of that goes into it. And you're gonna probably see a shake out again of, you know, brands that maybe came to market and they're just not doing all the little things right, and we are. So we're excited about it.

Joe: So shifting a little bit from Delta-8, it's been a hot topic. It's probably going to remain a hot topic as we get into 2022, but we're also starting to see, as you mentioned, additional cannabinoids, other parts of the hemp plant being incorporated into the products. So what's after Delta-8 as retailers now start looking towards that inventory for 2022?

Vince: So you're already hearing a lot about there's THCV, THCO. But one of the things we're going to be very much so focused on is a CBD product with the lower Delta-9 content because right now all of our CBD products have non-detected Delta-9. And as we go into January, that's totally when we start being able to ship, but we'll have gummies that are a Delta-9, hemp-derived, obviously, Delta-9 products with other cannabinoids in there.

And we really feel that consumers are ready for that. They understand what the benefits are of Delta-9 THC products from hemp. And they'll add those to their regimen of CBD, maybe Delta-8, but again, there's just different products for each different type of benefit that people are looking for to get from those and we're really excited about.

I think also with the Delta-9, the 0.3 or less, that's key, there's a lot more states where, you know, 48 states out of 50, that's lawful. So very similar to CBD, if not exact, outside of a couple of states, like Colorado as an example. But there's a lot of opportunity for retailers to capitalize on that.

And there's probably 35 states or so, give or take, the number changes, that can sell Delta-8 so you have an additional...you know, what is that...13 states that can...and those are needle movers that where there's highly populated, you know, Metro areas where retailers can capitalize on other cannabinoids that maybe they don't just want to have CBD.

Joe: And we'll wrap up on this point, which is a great transition then. With that evolving regulatory environment, I mean, heck, we're still waiting on any federal guidance when it comes to just CBD. So with the evolving regulatory environment surrounding the hemp industry, how do we work with distribution and retail partners to ensure safety and compliance?

Vince: Well, one of the great things that happened with Delta-8 recently is it became clear that the DA, as an example, does not consider it a controlled substance, which if you look back on CBD, you know, originally that's what everyone was saying.

And they worked past that, and then Delta-8, there was that confusion. And there's a couple states where they had, you know, questions asked from either the Board of Pharmacy, Department of Health, and the DA said, "Hey, hemp-derived Delta-8 is lawful with less than 0.3 Delta-9."

So that was huge for the industry. And you've saw some pushback in states like Texas where the Department of Health was trying to ban Delta-8. And they actually filed an injunction against, and they appealed, and they stayed the injunction. So that was great.

And again, I think when you look at the people that are behind it and that are consuming these products, you have everyday people, you know, it could be a soccer mom, it could be a grandma, grandpa, whatever, but there's also now that veteran support. And once you start bringing veterans into the mix, we didn't see that with CBD like you're seeing it with these other products like Delta-8, and probably you'll see that with Delta-9 as well.

Joe: Well, as we wrap up 2021 and into 2022, if you're looking for more information on partnering with our brands, distributors can visit www.hempbombsplus.com or www.mysticlabs.com.

Again, that's www.hempbombsplus...plus.com or www.mysticlabs.com. Both of those links in the description of this podcast. Vince Gillen, vice president of sales, my guest on this episode of the podcast will be your last podcast episode at 2021.

Vince: Closing it out.

Joe: Enjoy the rest of the holiday season, and...

Vince: Thank you.

Joe: I'm sure we'll have it back not too far into the new year before you start hitting the road and getting all those trade shows.

Vince: Absolutely. They start in, I think, January or February. So we're excited.

Joe: Awesome. Looking forward to a full calendar, hopefully, next year of trade shows.

Vince: Hundred percent.

Joe: Perfect. As I mentioned, Vince Gillen, vice president of sales, my guest on this episode of the "CPG & CBD University Podcast." And just a reminder, if you have not yet done so hit that subscribe button, wherever you get your podcasts. To get notifications of new episodes each week, you can find the audio platform on all the national podcast platforms and the video version, full video episodes on YouTube.

Thank you for joining us for this episode of the "CPG & CBD University Podcast" from all of us here at Global Wizard, we wish you and your family a very happy and healthy holiday season. I'm Joe Agostinelli, host of the "CPG & CBD University Podcast." Thanks for tuning in.

These statements have not been evaluated by the Food and Drug Administration. CBD products are unintended to treat you or prevent any disease or condition. Always consult your personal physician about CPG and using CBD products. CBD should never be used by anyone under the age of 18. This podcast had not intended to provide legal advice regarding the legal status of CPG and CBD products.