Joe: Kristen Nichols, the editor of "Hemp Industry Daily" joins us as we take a look into the crystal ball to see what topics in the CBD industry could be making headlines in the year ahead. This is the first "CBD University Podcast" episode of the New Year, and it starts right now.
I'm Joe Agostinelli, host of the "CBD University Podcast." If you are a returning listener, we welcome you back to our podcast. If you are a new listener, we are glad you found us on your favorite podcast platform of choice. You can get full video episodes of our podcast on the Global Widget YouTube channel and the YouTube channels of our brands. And since this is the first episode of the New Year, we wish you all a very happy New Year. And if you're looking for a New Year's resolution to make, subscribe to our podcast, stay informed on everything in the CBD industry by hitting that subscribe button, either on your favorite podcast platform of choice for the audio version or on our YouTube channel for the video version, no matter where you subscribe, notifications each week when new episodes are published. And this is one of our Zoom episodes where I am joined remotely by the editor of "Hemp Industry Daily," Kristen Nichols, she's back. Hi, Kristen, happy New Year.
Kristen: Hello and thanks so much for having me.
Joe: Pleasure as always, we always enjoy talking to you guys. And, you know, the best part about the New Year other than 2020 is now in the rear view mirror, thank God, goodbye, we'll never hopefully see you again, or, you know, probably just one for the history books, obviously. Time to getting into some predictions and obviously with predictions, in, you know, if we did this episode a year ago, nobody would have ever thought about 2020 coming out the way it did. So take all this with a grain of salt, but we'd like to have a little fun at the beginning of the year with some of the items that you, your staff in the industry will be watching out for in 2021. So as I fix my wire here, talking a little too much with my hands, get excited with the New Year. First of all, obviously in the year ahead, safe to say probably the biggest topic that everyone's gonna be keeping an eye on is federal regulations?
Kristen: Of course. So the big idea is gonna be who is in charge now. We're gonna have a new administration, of course. Folks wanna know who's making the rules at the new FDA, who's making the rules at all the new agencies, who's making the rules in Congress, and how this is going to affect the producers in the CBD industry. It's really too soon to say. So a lot of eyes are gonna be on Washington. And I would say also it's a perfect day. We're all Californians this year. Just yesterday, something took effect called Prop 65. If you're not familiar with that, it's a law in California that you have to put warning labels on anything that could cause birth defects or changes to, I guess, fertility. This now applies to THC as of January 3rd and it would also affect CBD if it includes even the minutest trace of THC. So everybody has to change their labels. They're big changes already, but we still don't know who's in charge, what are the labels gonna look like, but already we know there's gonna be some big changes this year.
Joe: Yeah. We talked about that on a recent episode of our podcast, along within our CBD market trends newsletter of some of the new packaging and labeling requirements and some of the initiatives we're taking here across all of our brands as the packaging and labeling requirements change in four states now, as we head into the New Year. So certainly, it'll be a year of regulatory and compliance. Now, interestingly enough, back in episode 50, one of our podcasts, we had Marcelo Gracia, the Secretary-General for the National Cannabis Industry in Mexico, on our podcast.
Kristen: I remember.
Joe: Yeah. Outside of the U.S., a lot happening obviously internationally when it comes to the industry in 2021. Are we gonna see an emerging market too, maybe in other areas of the world?
Kristen: Absolutely. Mexico of course, all eyes down there too. They delayed. Late last year, they had a deadline to legalize recreational marijuana and industrial hemp, new for that country. They missed that deadline, now planning to do it sometime Q1 of 2021. A good rule of thumb, anywhere in...any country on the planet, it is whatever they say, it's gonna happen, go ahead and take it with a big grain of salt, because things go slower or the rules take forever to get written, or it's like, "Oh, well, actually," you know. So still though, just the idea that Mexico could come online is going to be real disruptive, not necessarily in a bad way, but I mean could really shake things up in terms of production, marketing, sales. This is what I was telling my editor, we're talking about Mexico. You know, it was a big deal when Canada legalized, right? When they went to a full rec market. Well, when you go to the grocery store, you don't see a lot of stuff from Canada, but if you walk through the produce section of a grocery store, more than half of that stuff might've come from Mexico. When you talk about the impacts that's gonna have on U.S. producers, it's gonna be nothing like what we saw on Canada. And Canada changed the globe. Of course, they were first. We could see developments in Brazil. We could see changes in Europe, which is about to make some decisions on novel foods and CBD. It's really going to be a totally different game. If you want to do business outside the U.S., boy, you better keep a newspaper close, because there's gonna be lots of changes to watch.
Joe: And last year, we saw an influx of brands come into the market and an influx of brands leave the market. Do you anticipate this being the case as that regulatory scene maybe sort of plays out a little bit in 2021?
Kristen: Absolutely. We started 2020 with about 3,000 or so CBD brands. We ended 2020 with less than half of that many. And I think we could see it go half at least again. But I would say though, I don't think that's necessarily a bad thing for everybody. Doesn't mean every company, half of them are gonna, you know, go out. It could be it got acquired or became part of a larger brand. So there's got to be a lot of activity though, a lot of consolidation. When you think about laundry detergent or sodas or hand soap, there's not 3,000 brands out there. I think we'll see a lot of contraction. Doesn't mean that the business opportunity is gonna go away.
Joe: What else are you looking forward to in 2021 when it comes to the CBD industry as a whole?
Kristen: Okay. I think we're gonna see more attention, although we keep saying this, we're gonna see more attention to non-CBD uses of the plant. I'm talking like industrial uses. There was the USDA has issued up to, they say up to 150 million worth of grants for people to develop those supply chains. Another thing that I think is really gonna influence even CBD manufacturers and makers is going to be, we talked already about the new bosses and the new administration that Congress is going to say what is the priority in terms of climate change? Is there going to be a role for hemp or even higher THC varieties of cannabis? Because they don't just not emit a lot. They gobble up carbon from the atmosphere. They could really play a big role in our climate change goals. I don't know if that means fewer people are going to make CBD, but I think it's going to affect the CBD market in a big way.
Joe: And I know another theme that we've talked about extensively on this podcast and obviously one of the goals of this podcast is to educate consumers and retailers. Still 2021, a year of education, you know, for folks, and maybe some of the initiatives that "Hemp Industry Daily" takes on to make sure that education is getting into the hands of consumers and retailers.
Kristen: Yeah, it's a big challenge because you... as it's cool that CBD and cannabis products are coming out of certainly the illicit market and coming out of kind of the head shops. But at the same time, when you [inaudible 00:08:33] back, you were talking about dish soap and laundry detergent, when you go to the pharmacy, you got a headache, you don't spend 20 minutes with a knowledgeable, you know, pharmacist, really talking about your options and what's the best for you and what really exactly... So it is crucial for CBD manufacturers and brands to communicate what can be really complicated, what...the endocannabinoid system in the space of like a label that's about this big on the size of a three-hour energy shot, or the size of, you know, a small packet of tissue. Let folks know what that is. People still don't know. I was shocked. I interviewed someone this fall just last fall about this woman makes towels, towels of out hemp. Really cool, like, bath towels kind of thing. And she said the number one people all the time ask, can I smoke this towel? Or will it get me high? I thought, "You're kidding. People still..." She's like, "Oh yeah, absolutely." People still don't know that. I don't think that education is bad. It's just that it's gonna keep continuing over and over. And there's another thing that I think is going to be a big play in 2021 is not just educating what CBD does, but trying to counteract all the negativity that we're hearing from the government, that this is kind of snake oil. And it doesn't really do anything. And you shouldn't say it treats disease because it's just bologna. So you gotta make sure that you communicate not only what it does, but not get sideways with the feds, but also let people know, you know, this is not intoxicating. And just be patient. When you talk to insiders or like when me and you talk or talking to other people in the industry, it's like, "Oh, we're so past CBD, we're onto CBG and the next, you know, Delta-8" and like... But that's not where most folks in the public are.
Joe: You know, and just playing off of that point too, as we talk about what people hear and may not hear and some of the confusion, I know recently and there was an article that "Hemp Industry Daily" sent out a couple of weeks ago now was the FTC and some of the claims that some companies makes. And obviously that plays into the lack of education too. Maybe a little bit about that news that just hit a couple weeks ago and how that may play at a 2021 with some regulatory and compliance.
Kristen: Well, I think it's great news, good for consumers. And here's what's great news. If this were a couple years ago, these companies would be hauled off in jail. You'd see their mugshots flashed up like these are criminal cartels, you know, and they'd give it some fancy name, like Operation Crackdown, you know, whatever. And they would give a street value for the CBD. In this case, these companies were making some pretty egregious medical claims, but at the same time, this is regulatory and they were fine and they have to tell consumers, "Actually, we shouldn't have said that." And I think a lot of us can agree, that's really how this stuff should be handled. Unfortunately, it really is unfortunate, but unfortunately, I would say if you plan to really do any kind of sizable business in CBD, you don't have a choice, you gotta hire a lawyer. Have a lawyer look at your marketing and, you know, it's just, it is what it is. It's a highly regulated industry. You can't get around the fact that it's close to THC, really literally the molecule is like one little link away from THC. You could be looking at some serious sanctions if you don't know what you're doing, or if you're not...if you're new to,...if you never made a dietary supplement before, you've never sold medicine, I hate to say it, but just have a lawyer look at your stuff because that will save you a lot of heartache in the end.
Joe: We've talked about this on past episodes, but for consumers and retailers and our partners, you can also visit our brand web pages at www.hempbonds.com and www.naturescript.com to see all of the independent third-party lab results and all of our compliance measures that we take here at Global Widget across all of our brands with our in-house manufacturing, distribution, safety, and compliance teams, and obviously regulatory and compliance will be a very big theme in 2021 as we launch our CBD done right campaign, just to hammer home that point.
Kristen, I wanna thank you for the rundown on everything that we'll see hopefully in 2021. Let's hope all around the industry, it's a little bit better of a year. We emerge from this pandemic, get back to whatever normal is going to be. And I do know one thing, would love to have you back on the podcast and...
Kristen: Thank you so much.
Joe: We always enjoy talking with you and your reporters at "Hemp Industry Daily." And don't forget, listeners and viewers, for some of the best news in the industry do log onto their website, do follow them. That's hempindustrydaily.com. They got links to all their social media networks and be sure to have them back here on the podcast. Thanks for joining me, Kristen.
Kristen: Thank you so much.
Joe: And in addition, thank you for tuning into this episode of the "CBD University Podcast." We're not going anywhere this year. We'll be here throughout the entire year with all the latest news, trends, and as regulations come down, we'll have more insight on that from our industry experts and our media partners and friends. I'm Joe Agostinelli, the host of the "CBD University Podcast." If you have not yet done so, I remind you to hit that subscribe button to get notifications when new episodes are published each week. Thanks for tuning in.
These statements have not been evaluated by the Food and Drug Administration. The 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 content is not intended to provide legal advice regarding the legal status of CBD and CBD products.