Episode 5: Navigating Evolving Legal Issues in CBD

CBD Podcast Episode 5


Joe: On this episode of the "CBD University Podcast," we are going inside the cannabis industry with one of the leading legal advocates for our burgeoning industry. With the laws governing our industry constantly changing, learn about what it takes to stay on top as an industry leader. This is the "CBD University Podcast" and it starts right now.

I'm Joe Agostinelli, the host of the "CBD University Podcast" from Global Widget. If you're a returning listener, thank you for tuning in once again, and if you're a new listener, we are glad you found us on your favorite podcast app, and we'll break down some of the apps that we are on a little later on in the show and let you know where and how you can subscribe to our podcast. And we'll also welcome our viewers to the Global Widget YouTube channel, where you can see full videos of all of our past podcast episodes.

And on this episode, it's always fun when we have somebody from outside the organization here on the podcast, and I welcome one of the top legal advocates in the industry and we'll let you know how you can keep on top of everything happening and changing in the industry with a stern focus on quality and compliance here at Global Widget. It's great to welcome in Rod Kight to our podcast. Rod, thanks for joining me.

Rod: Thanks, Joe, for having me. This is great.

Joe: And Rod, first, let's get right into it. And for those of you on our YouTube channel who can see our monitor in studio, that is Rod's website that you can see on the TV screen, and we'll talk a little bit about that, the blog and everything else you're doing. But little background about yourself and how you got involved in the industry.

Rod: Yeah, sure. So I'm a lawyer. I represent businesses in the cannabis industry with a real focus on hemp and CBD. And I've been doing this for about five years. My entry into the industry came in the wake of the enactment of the 2014 Farm Bill, which, for the first time in history, in the federal level, legalized a form of cannabis that it called industrial hemp at the time. And so my personal interest in representing businesses in the cannabis industry first stems from a passion for the plant that I've had for several decades. But I also have a personal experience.

I had chemotherapy for testicular cancer about 10 years ago. And during that experience, I used cannabis and it really helped me through my chemotherapy. It helped with the nausea, it helped with the pains, and helped me to sleep, and all the things that go along with chemotherapy. It was using cannabis during that experience and seeing how positively it impacted me and my health that I realized that I wanted and in fact just felt compelled to get involved in the industry.

So that was my path towards changing my career from representing businesses in general to representing businesses specifically in this industry.

Joe: And may I ask, how has the cancer fight?

Rod: Oh, thank you. I've been in remission for years.

Joe: Oh, that's great to hear.

Rod: Yeah.

Joe: Great to hear. So, you know, we talked about what got you into the industry. You know, you're also an author for "Cannabis Business Law," did I get that right?

Rod: That's right.

Joe: That's your blog and...

Rod: Yeah, so I wrote a book back in, sort of, the 2014, first part of 2015 year. And the idea was a book that would help lawyers who are new to the industry but also business people who were wanting to get into the cannabis industry at large to understand the lay of the land. Sometimes, you just...you don't know what you don't know, and I wanted to say that these are the issues that are out there, and with each chapter, focused on, you know, taxes or real estate or legal issues like federalism in the federal and state divide, as far as how the laws play out.

So I wrote that book and it was published in 2015. And then I started my blog, the Kight On Cannabis Blog shortly thereafter. And the goal of the blog is to take issues that I see from clients, cutting-edge issues, what are clients facing, and then to give a meaningful analysis, so that they can take that and learn something from it.

Joe: So 2014, we're now in...just approaching 2020, so 6 years, I'm sure the topics and writings have changed quite a bit.

Rod: They have. You know, it's kinda funny. Actually, some of them have changed a bit, some of them are the same old things, you know, because the CBD industry has just, you know, blossomed during that five-year period. It's really taken its arc and in the cannabis industry at large, that we still have these issues with the federal government and issues like taxes and whatnot that we face. But the hemp and CBD industry during that time period has been like a rocket ship. It's been a quick five years, that's for sure.

Joe: And obviously, with an industry that changes as much as this one does, education is key. You know, we here at Global Widget know that, and that's one of the reasons behind the podcast, not only for consumers but for wholesale and distribution partners that we're proud to partner with. What challenges do you see consumers and businesses facing as we enter 2020 with this industry in regards to the products that are available on the market today?

Rod: Yeah, Joe, I think your point about education is really crucial. And so the distributors are having to assimilate a whole lot of information. And if you go online and Google stuff, you know, just like probably Googling anything, you're gonna find a wide range of answers to any particular issue, many of which will just, frankly, be wrong. And so I think getting educated properly to understand, certainly, with the legal issues are is vital. But consumers are at a place where they have to be educated as well. And sometimes, it's hard for a consumer to find, you know, good information and information that's reliable.

But as far as trends going forward, the industry, I've heard that hemp, hemp-derived CBD is what's legal and what's really driving the CBD industry, is going to be the third largest agricultural crop in the United States this coming year, for 2020. And so that tells you a lot about CBD. I think we're gonna see a lot of the companies that have been unwilling to get involved begin to get involved. I think we may see a correction of sorts, where some of the smaller CBD companies are either going to the wayside or being bought up by some of the larger companies.

Joe: As you talk about the constant changes in the industry, now recently, back in October, I think it was, we had the USDA and some of the new federal hemp production rules, excuse me, and as a subscriber to your blog, to see all the emails that have come out on that, so bring our listeners up to speed on what has been mentioned so far.

Rod: Yes, so the USDA issued an interim final rule on Halloween, October 31, 2019. And what those rules were...have been anticipated. But what they are are to help regulate the production of hemp under the 2018 Farm Bill.

Just as a little bit of background, Congress, every three to five years, enacts a Farm Bill and it's hundreds if not thousands of pages of dense statutory language encompassing all aspects of farming.

Well, in the 2018 Farm Bill, there were provisions that broadly legalized hemp. And any sort of statute, particularly something involving farming, you need the governing agencies, in this case the USDA, to issue regulations as to how those statutes are going go be implemented. And so the USDA regulations came out, just the point we were talking right now, just about a month and a half ago. We're still working through them. In fact, we're still in the comments period. So if you're listening to this before December 30, 2019, and you have read the regulations and have some comments for it, you can still go and make a comment and the USDA will consider that and may change or modify the regulations.

Joe: And after a comment period, how long before something may be finalized?

Rod: Right. We're talking a year or two. You know, this is a government agency and they take, you know, a little bit longer than we'd like, a lot of times, but there's a lot to assimilate and a lot to put together.

Joe: As we continue to await guidance from the FDA on CBD products, but I was mentioning your blog because of the role the CBD plays on the health, this entire industry has emerged to deliver CBD products that just about any magnitude and we here, at Global Widget, across our three brands have other edibles, oils, tinctures, topicals. What can consumers do to make sure they're aligning themselves with the products that are of the highest quality and compliant with local state and federal regulations that are out there?

Rod: Yeah, sure. Well, I think the first thing is what you do with any product. You know, nowadays online, you can go and you can read reviews and you can check out from reputable websites where there have been reviews. You can also go to the manufacturer's website itself and read about he products, you know, and say, "Well, from a basic standpoint, do these products comply with the law? Are the CBD products derived from hemp? Do they contain no more that 0.3% delta-9-THC? And are they following just good manufacturing practices?" A lot of that's apparent just from the website itself.

I think in this day and age, we're so computer-focused, but certainly, you can also reach out to the manufacturer. If you have specific questions or concerns, whether by phone or by email. And I think a good producer will respond.

Joe: And in your eyes, how have you seen Global Widget and it's in-house manufacturing, distribution, quality, and compliance teams positioned itself to stay ahead of the curve regarding industry regulations?

Rod: I've been fortunate enough to be involved with Global Widget for a long time and to watch it evolve. And the thing that really has always impressed me is that Global Widget stays focused on where things are going and where they need to be.

So this industry has emerged from almost literally nothing to multi-billion-dollar industry in a span of just a few years. And over that time, it's just been a constant learning curve, a constant ramping up of all of the, you know, everything from labeling to production to distribution to interacting with consumers, all of these things, and Global Widget, on all of those fronts, has worked very hard to stay ahead of the curve as to where it needs to be on where the industry is going.

Joe: And, you know, talking about where the industry's going, so we're just a few weeks out here before the start of 2020. If you're listening to this podcast when it was first uploaded, it may be before the end of the year. As we head into 2020, what do you see some of the biggest challenges facing the industry and, you know, maybe the first quarter of the year, what are you looking to see come out of headlines?

Rod: Yes, so there's kind of two ways to think about this. One is the cannabis industry at large. I have a little bit of a sidetrack here. I'm using the term cannabis in a botanical sense, for the plant. From a legal standpoint, cannabis is divided into two separate categories. There's marijuana, which is federally illegal and it is lawful under some state laws, and then there is hemp which is federally and state legal. The only distinction from a legal level is their concentrations of THC. But cannabis is the plant.

As we've seen in the cannabis industry, a lot of the companies that are publicly traded in Canada have released their third-quarter reports and have lost tens of millions of dollars in the third quarter. And so I think when an industry has businesses that are on track to lose a hundred million dollars in a year, obviously some changes and some corrections are due.

So on the one hand, I think... And we're seeing prices for hemp and CBD just continued to drop, and that is gonna cause a lot of consternation on certain segments in the industry. But of course, whenever you have that, you also have opportunity just for other pieces of the industry. So I think we're gonna have a buyer's market for the first part of the year, certainly.

I also think we're gonna see a situation in which companies that have been planning to be GMP-compliant have been, you know, the resources to kind of push through on this large-scale global correction in the market are gonna do really well, frankly.

Joe: Before we get to summing your extracurricular activities, which I discovered online, we'll just talk a little bit about your blog. Kight On Cannabis is your blog that listeners can subscribe to. How do they go about doing that? What type of information do you write about from time to time?

Rod: Yeah, sure. The blog is kightoncannabis.com. It's kightoncannabis.com. My name is like night or light, but with a K instead of an L.

Joe: I only slipped once here on the podcast.

Rod: You did a very good job there.

Joe: It was the last mention I had to make.

Rod: You've done phenomenal. Since I was a kid, I've gone by "Knight" and I just don't care at all. The only thing, I want to make sure that people get to the right spot. So it's Kight On Cannabis. You can also access it through my website which is cannabusiness.law. It has the blog embedded in that.

And so we write... I say we, I do most of the writing, but I also have some attorneys, associate attorneys in the office that write usually a blog post or two every month. And we also post blogs or articles from outside sources, you know, scientists or people in the industry, other lawyers occasionally, who have something that's important to say.

But the concept for the blog is, you know, this is an industry where education is really vital, and there's a lot of misinformation. And rather than hiding the ball, I think it's important to put it all out there, to educate the public and to raise the issues that we're seeing, and analyze those issues.

This is not an area of law where a lot of things are fixed. I can't tell you how often I'll get a call from a client and they'll say, "This happened or we want to do this, you know, can we or should we?" And there are no regulations governing that particular thing. And so we have to make a decision, okay, well, where the regulations likely to be 6 or 12 months from now. What is a good policy position to take for the company and also for the industry at large. And there's a lot of just grey area.

So we try to take those issues and analyze them and educate to be able to make positive and progressive decisions that will work for themselves and for the industry. That's a long way of saying we analyze issues that are facing industry.

Joe: As I mentioned, being completely transparent, subscribe to your blog. I find it very educational and informative. I do invite all listeners to take advantage of that opportunity to stay on top of everything on the industry from your blog and subscribe to it.

Rod: Thanks. You can do it by the website. There's just a little you key in your name and email, and I believe, I didn't set this up, you'll get a confirmation email. But it's free.

Joe: You will.

Rod: We won't pound your inbox. We usually release, on average, probably one to three articles per week. It's just topical issues that are out there.

Joe: So you're an attorney, you have a blog, and I've also discovered through some research that...how long have you been in a rock band?

Rod: Most of my life, I should say. I play in a rock band now called Hard Rocket, and you can find us on Facebook or Instagram. But I've played guitar since I was 12 years old. It's always been a passtion for me. And I've been fortunate enough to live in a city, Asheville, North Carolina, that has a real thriving music scene, and found some fellow musicians that are really fun to play with. And we gig as often as we can. We're all middle-aged with kids and jobs, but we find time to usually rehearse once a week, and on average, play out and then gig about once week. It's a blast.

Joe: Do you have a favorite musician or band outside of your own?

Rod: Oh, that's so hard to say. There's two levels, right. There's the bands that I grew up loving, you know, Allen Brothers and Santana, and then later, I was big into Phish and that whole scene for a while. But now, I love, you know, straight up, you know, kind of rock music that's out. I love Portugal. The Man. But then, you know, in Asheville, there's a really good rock music scene. There's a great band called Modern Strangers. There's a great band called John Kirby and the New Seniors. So I love them nowadays as much as I love some of the big-name acts.

Joe: My brother lives up that way, as a matter of fact.

Rod: Really?

Joe: Yeah. I have to find exactly...you think I would've... And I had no idea that you lived in Asheville until you just mentioned it. I didn't get that part of the research on the website but I'll have to check and I'll let you know off-air exactly where he lives, but yeah, he's right up that way.

Rod: Let me know, absolutely.

Joe: Absolutely let you know. Last question and we'll stick on the rock side and we'll wrap things up here. Your favorite song to play or do you have a favorite original song you've written?

Rod: Oh, gosh, right now, probably my favorite song to play is Mount Zeppelin. It's one of our originals. We do a lot of instrumentals. It's about a five or seven-minute, just rock and roll instrumental. It's fun.

Joe: Awesome. Well, I invite the listeners, all the links that we talked about onto this podcast episode will be right on the description of the podcast, not to mention, you can also follow Rod and his band too, if you are into rock music, on Facebook and Instagram. Rod, kinda wanna thank you for taking the time out of your always busy schedule to join us here in studio at the Global Widget headquarters in Tampa and up here on our podcast, and I'm sure we'll be in touch again very soon for another episode.

Rod: Thanks, Joe, for having me. I appreciate it.

Joe: And thank you for tuning in to this episode of the "CBD University Podcast." A couple of reminders to listeners, you can find us and subscribe to our podcast on your favorite podcast app. And we are on Apple Podcast, Google Podcast, Spotify, SoundCloud, TuneIn radio, RadioPublic, Stitcher and more. Plus catch full episodes with video on the Global Widget YouTube channels, I'll wave to one of our camera. And don't foget to submit your questions for future episodes of our podcast, in which we will get through the viewer and listener mail bag, and you can sumbit your questions to podcast@globalwidget.com. I'm Joe Agostinelli, the host of the "CBD University Podcast" and 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. Always 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.