Episode 116 – Hemp at a Higher Standard: Age Verification



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Joe: On this episode of "The CPG & CBD University Podcast", education in the convenience source space on hemp-derived cannabinoid products. With the hottest edibles and other products widely available, we discuss new measures. It's hemp to a higher standard on this episode of "The CPG & CBD University Podcast" and it starts right now.

I'm Joe Agostinelli host of "The CPG & CBD University Podcast." We welcome you back to our podcast. If you haven't done so yet already, I invite you to subscribe to our podcast by hitting that subscribe button wherever you get your podcasts and don't forget that you can catch the video episodes of our podcast on the Global Widget YouTube channel, and the YouTube channels of our brands, the link to that version in the description of this episode. But with the hottest hemp-derived cannabinoid edibles and other products becoming more prevalent in the retail space, education of these products and ensuring they don't fall into the wrong hands is key. And welcome back to our podcast. Global Widget Vice President, Vince Gillen, and industry advocate and attorney Rod Kight both joining me via Zoom. Welcome both to you.

Rod: Hi Joe, thanks for having me again on the show. I'm looking forward to talking with you and Vince about these exciting new developments. Seems like there's always new developments in the hemp world.

Joe: Absolutely. And it's hard to keep track of all those developments. And Rod let's start off with you. First of all, no matter the cannabinoid that is in a product, most if not all states have some type of age verification regulation on the books, correct?

Rod: Well, no, actually not necessarily. So when it comes to hemp, hemp was legalized at the federal level by the 2018 Farm Bill that was enacted at the end of 2018. And there are no federal restrictions on hemp or products derived from hemp. On a state-by-state basis, there's a handful of states that have age restrictions, usually 21, but it can be 18. But for most states, there are no age restrictions on products that contain hemp or cannabinoids from hemp.

Joe: You learn something new every day. Here I am I thought most of it was all 18 plus, 21 plus, but Vince that's why we are a leader in the space when it comes to compliance because especially with emerging trends in hemp-derived cannabinoids, whether it be CBD, Delta 8, Delta 9, the need for education of retailers on these products is so important. How are you focusing your efforts?

Vince: Right, well yeah, education is definitely key. And I think, you know, the age restriction itself is definitely a topic that usually comes up when talking to our distribution and retail partners. And I think what we try to do is just advise them on making these an age-restricted product because if there's not something in writing, we'd rather be very conservative about it, and make sure that that we go ahead and have that in place, and then they can tell the retailers that. So it's one of those things where we're not trying to tell people what to do, but we're just giving what our advice would be. And I think they look to us for those types of...or that type of feedback.

Joe: Hey, Vince, you just came back from a recent trade show in the Tampa area. What type of feedback are you hearing from distributors on some of the newest products?

Vince: Well, so a lot of the distributors that were there started with CBD products, and have transitioned into carrying Delta 8 if they're in a state where it's lawful, and most of them were very excited. We had the Delta 9 products there on display. And they, you know, the first question is, you know, what's the difference between this and Delta 8? But a lot of them were just excited to be able to have the opportunity to sell those types of products, especially if they're in a state where D8 is not lawful. So it's going to give us a lot of opportunity to, you know, have these types of hemp products into distributors that maybe we're not able to sell, you know, one of the other ones.

And then some of them actually were very conservative on CBD, and it's interesting to see someone skip selling CBD and go right to selling Delta 9 hemp THC products. And that's actually happened with probably three or four distributors, and there was approximately probably about 40 to 50 convenience stores to distributors nationwide. And I consider a lot of these really legacy-type distributors if they're family-owned businesses. Some of them are publicly traded. But for the most part, there's a lot of, you know, newer blood, if you will, that's getting in there, and wants to get into the hemp space, and maybe they were on the sidelines with CBD.

Joe: And for those who are getting into the Delta 8, Delta 9, other hemp-derived cannabinoid products, in addition to age verification, Rod, what are some of the other key legal issues that retailers should keep in mind when selling hemp-derived cannabinoids, especially as I mentioned, the latest and greatest products to keep up with emerging trends?

Rod: Yeah, sure. Well, before I move on to some different things to consider, I do want to sort of circle back around about age verification. The fact that most state laws and federal doesn't have age verification or requirements for hemp products doesn't mean that you shouldn't verify age. And, you know, as Vince said, he educates, and Global Widget talks to its distributors about that and recommends age verification. Again, particularly with the THC products, some of which do have intoxicating effects, you can feel them. And, you know, we don't advise that, you know, 15-year-olds, 17-year-olds go in and be able to just to purchase these products. We think it's responsible to have some sort of age gating and to restrict the products. And certainly, if a parent comes in, and they feel comfortable, there are policies that I'll work with clients on in those situations, and that goes for CBD as well.

You know, Vince talked about how it's interesting to watch some of the more conservative distributors sort of that didn't want to get into the CBD sales, and now they're moving to, you know, Delta 9, or sometimes Delta 8. And I think that's just a positive development in a strange way, and that it shows the evolution of hemp and the acceptance of hemp by society or...CBD when it first came out was a novel and interesting, and a little bit scary for folks. And now that's become, you know, frankly, just we'll accept it. It's just another product on the market. And these distributors have seen that there is a demand for these products, and have seen that things go well, generally, for distributors that do it the right way. And make it a point to do things like age verify, to do due diligence on the products that they carry and they sell.

So that's my little spiel on age verification and CBD. As far as things that the distributors and even individuals who are consuming these products should bear in mind, that is, I think, a couple of things. First of all, the legal status of these products, particularly the THC products, but even certain types of CBD products. It still varies from state to state. You have some states that are very restrictive that won't allow most types of hemp products to be sold, including just standard CBD products. You have other states where everything can be sold and there's not much regulation at all. And so depending on what state you're in, or where you are in the country, that will often depend on what products you have access to.

And with respect to the products you have access to, on one hand, states without a whole lot of regulation, that can be good in the sense that you have access usually to a wide array of products. But also means that you need to do more due diligence on what products are actually out there and available. Are they safe? Are they manufactured using good manufacturing practices? Is there good customer support for, you know, "Hey, I've got a question about your certificate of analysis, or I've got a concern about this product. Or how should I use this product?" And so on and so forth." And so, in states where there's not a whole lot of regulation, sometimes you see some bad actors. And that's the thing for the hemp industry that we're as a law firm, and I know that Global Widget is concerned about, is making sure that good actors are out there doing the right thing. So the hemp industry isn't cast in a bad light due to a few bad apples.

Joe: And Vince, we're arming those distributors and good actors with educational resources that we provide just a part of our hemp to a higher standard initiative. What does that initiative mean to you and to our distribution partners, both current and prospective?

Vince: Yeah. When we first launched with CBD, and we had a educational piece that Rod and his team actually helped us with called CBD 101. And it was a very useful tool for our distributors, their sales reps, and then the retailers, and even an end consumer to understand what hemp-derived CBD was. And now with Delta 8 and Delta 9, and you have what we consider, you know, non-intoxicating hemp products like CBD with intoxicating hemp products like D8 and D9, there is a lot of questions out there. So they lean on us for, you know, understanding the differences between those.

We'll do... We have a one-pager that just kind of briefly describes out a lot of graphics. So it makes it easy to understand it, you know, from across all levels. And then we're also trying to have people reach out to us regarding legality, why it's legal, how to talk to it, and making sure people are aware that, you know, there is a difference between a CBD product and a hemp-derived Delta 9 THC product. So it's been going very, very well and I think, overall, the whole thing with transparency and not trying to hide, you know, what these products are has been very good for us. And I think that's one of the reasons we're getting a lot of conservative type distributors that maybe were on the sidelines that are coming out and saying, "You know what? We need to get on this, but we got to deal with the right brand, the right company.," You know, going back to compliance, good manufacturing practice as well.

Joe: And Rod, we talk about confusion in the retail industry regarding the legalities surrounding these products, is that a result of having no federal regulation or specific guidance out there, and as you mentioned, varying from state to state?

Rod: Yeah, I think so. I think, you know, you've got the Federal law says one thing, a lot of state law said the opposite thing or sort of the same thing, but sort of something else. So yeah, there's just a lot of confusion. And I think it does stem from the top, so to speak, when it comes to federal law. But you know, I kind of piggybacking on what Vince said, and this whole issue about the federal legal status of the patchwork of state laws and regulations. And I'd like to address something that Vince and I have been talking about lately. And that's the distribution of products, particularly THC products, the Delta 8s and the Delta 9s, by, you know, retail stores, and specifically, convenience stores. Typically what you hear coming from different organizations and groups out in the world regarding hemp products, particularly ones that are...can have the potential to have intoxicating effects, like the THC ones we're talking about, is that the response as well, usually this is bad.

Well, you know, then you see the opposite happening with respect to the desire. These products are selling like crazy. People really want these products. They want them because they benefit from them in a number of ways. But from the sort of these products are bad group, you typically have a few different ways that they want to address it. One is to say, well, all of these products should just be restricted. And it's really difficult to restrict them because these products all fit within the legal definition of hemp under the Federal Farm Bill and the laws of almost all states. And so how do you restrict them? And we've seen some efforts by some states, notably Oregon, and most recently, to reduce and limit the amounts of milligrams of THC, even though the lawful THC in these types of hemp products.

And the problem is that A, you know, what constitutes an amount that is non-intoxicating? Our metabolisms are different. Additionally, a lot of times what happens is you capture, so to speak, non-intoxicating CBD products, and we're seeing that very thing happen. Oregon just passed a law, you know, regarding milligrams of THC in hemp products, and a lot of standard CBD products are now captured within that and are now restricted in some way. So that approach is what we think are not the right approach. Another approach is that, well, all these products should actually just not be sold as hemp, they should just be sold pursuant to that state's marijuana program. Well, you know, first of all, marijuana is still federally illegal. It seems crazy but it is. Additionally, a lot of states don't have programs, medical, recreational, or otherwise, particularly in the southeast. And so people just won't have access to these products that otherwise would.

And then also with respect to these products, these are hemp products and by, you know, sort of giving away so to speak, you know, these products that are hemp, and that hemp really sort of pioneered. And so it's really hurting the hemp industry and the players who have done a lot of work to create the hemp industry. We think all those problems are best solved by age-gating. Tennessee has a bill right now that if passed would allow these products as they're allowed now but require age verification. And all that is really a long preamble. You know, ask a lawyer question and we talk and talk and talk, but a preamble to age verification. And so a lot of times what Vince and I have been talking about is that we hear people say, all these products can be bought in a convenience store. That's so awful. Or is it really awful? Who better in the country has the access to the right software, the training, the protocols to do appropriate age verification than convenience stores.

Convenience stores are where people buy, in addition to gasoline, they buy snacks, they buy alcohol, they buy tobacco products, they buy sometimes a lot of novel products like kratom and things like that, and they all of which require age verification, and convenience stores do it well. It's part of their training programs. They have the equipment to look at and read IDs well, and they know how to comply with not only the federal laws regarding these things but the individual state laws of where they operate. So this idea that convenience stores sell intoxicating hemp products, I think is a good thing. Because when we want to talk about safety and access, I think convenience stores, by and large, are the ones that have been doing this for years and years of all sorts of types of products.

Joe: And, Vince, when it comes to safety and access, some of our newest displays, you know, obviously what they had in mind, clear packaging, clear labeling requirements, talk a little bit about that to help educate our retail and distribution partners.

Vince: Yes. So the displays are set up to where, you know, the end consumer, obviously, in say a convenience store, can actually understand what it is. There's a lot of QR codes on the display itself. But it's also labeled what the brand is, and then the display itself is loaded from the back so that the employees have access to it. And that way, there's not people grabbing the product from the front, and a lot of our distributors, and then also the retailers like that. And then in addition to a counter display, some of them are putting in floor displays that whether locked during hours or not, also, houses, these hemp products, and other age-restricted products as well. So and to Rob's point, I think we're at a really neat place with our distribution network being so heavily focused on convenience to where these types of distributors and retailers can really capitalize on this next wave of hemp-derived product business that could be way bigger than CBD. And we're gonna push heavy for that, and try to do our best to educate and advocate for these products to be sold in convenience.

Joe: And Rod, I've been thinking, we just talked about some recent legislation, but anything really pending right now that folks should keep an eye out there, may change some things in the space? Or are we still kind of waiting to see what the FDA does?

Rod: Well, we have a new head of the FDA that could signal a positive path forward. It's too early to tell. We also have a hemp bill. It's a standalone bill that has some positives and negatives. Maybe that'd be something we can talk about in a future podcast. It's a new bill. My thought is that it's not likely to pass as a standalone, but some of its provisions may get incorporated into the next Farm Bill, which we'll probably see in a year or two. And then, of course, the states just continue to evolve. And so lots of little changes and proposed changes at the state level. So really, I think that it's status quo in that I think it was Heraclitus that said, " The only constant is change." And that's certainly true for the hemp industry.

Joe: Well, Vince and Rod, thank you for joining me on this episode. Lots of great information as always, and always appreciate the insight, as also I know our distribution retail partners do.

Vince: Absolutely.

Rod: Thanks for having us.

Vince: Hey, Joe. I just got to say one thing that talks about state law, and you can really look at how far this evolution of hemp has come when you look at the state of Louisiana where they banned. And quite a few distributors wrapped their show recently. They're pretty large. They've never been able to sell CBD gummies and now they can sell. And what is it specifically, Rod? I think it's up to 1% THC.

Rod: Yeah, I think that sounds right. Yeah. Yeah, Louisiana has come a long way. I remember when we first were, right, because it's one of the registration states, right, where we were trying to push through the original registrations when the program first came out. And there was bumps and hurdles and obstacles, and now, right, Louisiana is turning into a good hemp state.

Vince: Yeah, so that right there is from 0 to 100 real quick, which is good.

Rod: Exactly.

Vince: It is positive.

Rod: It's very positive. I agree. And I really like, I mentioned Tennessee, I like Tennessee's approach if this bill gets passed you know they say, "Hey we're not going to restrict products other than by restricting them with respect to age." Which I think most people agree should occur at least with intoxicating hemp products, and then but allows the industry to flourish and for people to have access.

Vince: Absolutely.

Joe: Certainly, lots more to discuss on this topic moving forward, and would be happy to have both of you guys back on another future episode. And, Rod, maybe in studio you can come visit us.

Rod: I'd love to. Things are opening up again, so yeah.

Joe: Yeah, so...All righty, Rod Kight, Vince Gillen, my guests on this episode of "The CPG and CBD University Podcast." And for more details on our compliance and safety initiatives in the industry, you can always visit gwgummies.com and globalwidget.com. You can also catch up on past episodes of our podcasts on the Global Widget YouTube channel, and hit that subscribe button wherever you get your podcasts to receive notifications of new episodes. I'm Joe Agostinelli host of "The CPG and CBD University Podcast." Thanks for tuning in.

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