Episode 63: Making Headlines in the CBD Industry



Joe: On this episode of the "CBD University Podcast," we are going back behind the headlines at the industry with "Hemp Industry Daily." An update on the latest news and the headlines making waves during the first couple months of 2021. This is the "CBD University Podcast" 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. And for those who watch full video episodes on our YouTube channel, you will notice this is another one of our Zoom episodes. Kristen Nichols, waving to the camera, is the editor of "Hemp Industry Daily." She's back. It's amazing, we are now in the first week of March with this episode. I feel like we just did our end-of-the-year recap and here we are already talking about the first two months of 2021 of what's already been a very newsworthy year in the industry. And I don't want to spend too much time on the intro because we got to get right to the headlines. And who knows, maybe we'll have a few more headlines here coming up in the next couple of weeks, but I can tell you, hey, you know, from a former news anchor and producer, there never seems to be a slow news day in this industry.

Kristen: Sure. I used to say whatever you think about cannabis, it truly is the miracle drug of news. Always newsy.

Joe: There's is always something. Yep. So, let's take a look at the first two months of the year and some of the stories we're watching as we wrap up really the first quarter of the year at the end of this month as crazy as that sounds. When you last joined us, we talked about federal regulation was probably, you know, the key message from that last episode that we talked the most about, and boy, the federal regulation, we wasted no time getting into it in this year with the USDA making headlines first.

Kristen: Sure. I thought that was so interesting. It was hours before former President Trump was to leave. They finally made file the hemp rules for 2021 and beyond. They take effect later this month. A lot of the agencies had to redo [inaudible 00:02:19] take a look at things, but the USDA published them the day before. So, they're no longer under review. We finally have final rules for the hemp industry. Again, starting March 22nd. That's the lay of the land.

Joe: Yeah, we're just a few weeks away on that. And you know, just talk a little bit about what that means for everybody.

Kristen: Good news and bad news. Good news, you got a little more leeway on going hot and being a criminal. Now, it doesn't mean you can sell it, just means you're not going to jail. Other good news is you can mitigate which was not possible before. That means basically, okay, maybe you can't sell the flour, but you can sell the fiber. You know, you could sell it for, you know, animal bedding. There's other things you can do. You also don't have to get a cop-out to your land for this like supervised destruction, you can just plow it under, same as you would any other failed crop. The bad news, of course, the DEA still has to certify or register labs that test here and total THC testing, which is kind of scientific and, but long story short, it's a more rigorous threshold or a more rigorous standard for testing than some folks wanted to see.

Joe: And you touched on this when we talked about the USDA initially and the final rule that came down was just hours before former President Trump left office. Now, we have the new administration with President Biden. What impact do you think that can have as we move forward in the industry?

Kristen: I think humongous. I don't think USDA though is the place to look. As most folks know, Biden's pick to lead the USDA is the fella who led the USDA during the passage of the 2014 Farm Bill, Tom Vilsack of Iowa. He has not yet been confirmed. He's had his confirmation hearings. There's not a lot of expectation he won't be confirmed, but just like anything, D.C.'s taking a long time to get going. So, here we are, we're probably going to end...we might be into summer before we have acting secretaries of the agencies. But the big, big, biggie, the biggie that we have no idea where this is headed is the FDA. As you can imagine, top priority for this new administration is getting this COVID vaccine out. Tons of attention on the FDA and yet not a whiff of who might be in charge. That's gonna be huge for the industry. Everybody wants to see some action on CBD, a good batter in different [inaudible 00:04:56] or sideways, whatever, some kind of certainty. And we still have no idea. And I think that uncertainty is going to continue because when we do have an FDA, again, going to be consumed with this vaccine rollout, I think for at least the rest of '21.

Joe: So, something that we may have thought would be coming, you know...

Kristen: Yeah, right away.

Joe: ...a few months or halfway into 2021 may be pushed out a little bit because of the vaccine rollout.

Kristen: Sure. You know, the big tracking agency, Neilson, they, you know, they rate everything and rank sales of everything, they have in their CBD projections that there was going to be action or congressional action, either from the FDA or from Congress in the first quarter of '21. And that was I think ambitious to begin with, but I think I'm confident now saying there's not going to be any kind of certainty on CBD here by end of March in the first quarter, I think Nielsen's wrong.

Joe: So, as we look towards the second quarter, and that's something interesting too to mention that we should touch on real quick, not necessarily the FDA, we could also have congressional action, you know, in the industry which has been tossed around.

Kristen: Sure. Absolutely. So, a lot of folks are frustrated by the FDA and want Congress to just make them do it. Congress, understandably, is hesitant to do that. They realize, "Hey, we're not doctors." There's been things before that were miracle cures that everybody wanted to fight the big, bad FDA and get to the people. But there's reason to be skeptical that Congress will do that here. Certainly, that is what the industry would like to do. We have seen the reintroduction of a bill the hemp industry really wants to see, it would allow any hemp extract. It would say it's safe to go in food. And you could put it in a treat like a dietary supplement. That is absolutely on the table. Hemp wants to see...I mean, hemp industry would like to see that move very quickly. Again, I think prospects are dim. I think we're in a gray area for a while, but there's something interesting that I'm watching early this year and I didn't think about, but as Congress and the FDA are distracted, a lot of states are starting to take more of a say in how things are sold. The trend right now, smokable hemp, a lot of states are concerned, alarmed, think it's pot, freaked out, don't want to see it. They're either putting age restrictions or limits on how it can be sold and used. We're seeing in Newark, California, Indiana, Texas, all the big states, Florida is looking at. All the big states are really looking at smokable hemp. And the reason they're acting is because they're seeing what we're seeing, which is a go-slow or do nothing FDA when it comes to this product.

Joe: And when we talk about go-slow, the same may not be able to be set for some other countries. Outside of the U.S. there seems to be a little bit of movement in the industry. And I'm talking really about Mexico and the UK seem to be making some headlines. First, Mexico as they move ahead in approving hemp. And then in the UK, CBD is a novel food with many companies now looking to sell their products. Also in full transparency, and we'll talk about this in a future episode with some guests from the UK, we are one of those companies. So full transparency, yeah, we'll have more on that. But obviously, Mexico and UK moving forward making some headlines.

Kristen: Yeah. I don't know where Mexico...but that's also happening this month in the EU. The novel foods deadline is this month. And also this month, in the UK, as you referenced, you have to either have your application in or you have to come off shelves. The UK did kind of a different approach to the U.S. U.S. says, "Oh, nothing can be sold." Meanwhile, you and me know, every time you go to the gas station or the drug store or anywhere, there are CBD being sold, and they're just not enforcing it. In the UK, what they said was okay, after this date, this date which is the end of this month, you don't have all the safety applications in the pipe, then you have to come off. So, I think we're going to see a lot more rigorous enforcement in the UK, but what the good news there is for industry and why you referenced kind of them leaping ahead of the U.S. is because businesses just want to know what are the rules I need to follow. So, in the UK, if you're not taken off shelves, that means you did the right things and you have your application in, and, you know, you can do regular business same as if you're selling fish oil or vitamin C or that's what the industry wants. I think what's interesting about Mexico, still a lot of uncertainty about when this will...they had delayed, delayed, delayed. You know, this was supposed to happen years ago. But what I think is so interesting about Mexico, when you think of go into the grocery store, when you walk through the produce aisle, not a lot of that stuff was grown in Canada, but a whole bunch of that stuff came from Mexico. They are going to be so disruptive. And I don't mean this in a bad way, the way NAFTA and agriculture has changed with production flooding to places would have a better climate, much lower labor costs, much lower costs of compliance, even the prospect that Mexico could be coming I think is really going to change business activity here in the U.S.

Just one quick story, there's a big greenhouse producer called Village Farms. They are out of Canada, they're the number one tomato and indoor lettuce producer. So, this time of year, we get tomatoes in the store, they might've come from Village Farms. Anyway, they recently, by recently I mean '19 maybe, converted all these tomato greenhouses, grow houses in Texas from tomatoes to hemp. And the reason, they said, "Oh, we can't compete with Mexico growing tomatoes. We gotta get to hemp." So, my point being with this Village Farms story is that when you can grow hemp in Mexico, just like how are U.S. producers going to compete? I think even if we don't know when Mexico, probably not this quarter, maybe not by summer, maybe not even this year, but boy, people are thinking about it already. And I think that's going to be much more disruptive. And I don't mean that in a bad way to the U.S. cannabis market, both sides, I think way more than Canada was.

Joe: So, aside from the happenings overseas and outside of the U.S. and the March 22nd date for the USDA final rule, before we have you back on in the next couple of months, what maybe could we expect to see in the industry? I would say maybe more action from the states?

Kristen: Yeah. A lot more cool science innovation. I don't know if you're familiar, if you ever heard, I had never heard of this gene-editing tool, CRISPR, which can be used...somebody won the Nobel for it last year. It's a gene-editing tool. So, they can use it, this is again, kind of thinking about it in the future, could be used to cure disease or build healthy cells. And it's being used in cannabis. There's an Israeli outfit and some biotech firms sprinkled across the U.S., they're doing a lot of work on gene-editing in cannabis, not just low THC, high THC, and everywhere in between. We've all heard of these minor cannabinoids, but they're extremely rare and can be expensive to extract. If there could be a way to edit the genes of this plant to make those. So, I think we'll even in the next few months could see some really exciting innovations coming out of the science world in terms of gene-editing and the kind of varieties we're finally gonna see come to market that are more reliable, that do what folks want them to do, and perform in different kinds of climates rather than just where the guy bred it, which is the basement somewhere, you know? I think even this summer we're going to see a lot of exciting innovations coming to the fields and to the grow houses.

Joe: We look forward to talking more about it in future episodes. And before we wrap up, just reminder to our listeners and our viewers that you can keep up with all the latest headlines from the industry by visiting www.hempindustrydaily.com. You can see the work of Kristen and all their great reporters covering the industry each and every day. Before you go, I wanted to mention when folks go to the website, I've also noticed some of the newest yearbooks that you could download. A little bit about those new yearbooks as to what's available for an outlook into 2021?

Kristen: Yeah. If you love to just be cheesy, if you are from mainstream agriculture, they have lots of yearbooks, variety books, a seed catalog. We're also hoping to do some kinds of additions you can use. I mean, pesticides and fertilizers, kind of different products. We'll be looking more the different products coming to market through buyers guides that you can just kind of flip through. We don't take a position on what you should buy, but just have a look to see what's on the market so you don't have to travel to a lot of shows or, you know, spend a ton of time on the phone trying to find out who makes this product that I need.

Joe: Again, it's at www.hempindustrydaily.com. Well, Kristen, as always, thank you for your time and your insight into the industry.

Kristen: Thanks.

Joe: We always enjoy catching up with you and you're great staff of reporters.

Kristen: Yeah. This is fun.

Joe: And we look forward...

Kristen: Thanks so much.

Joe: ...to having you back on. No, thank you.

Kristen: Yeah, can't wait.

Joe: We always enjoy you being on.

Kristen: All right. Take care.

Joe: So, Kristen Nichols is the editor of "Hemp Industry Daily," my guest on this episode of the "CBD University Podcast." And reminder if you have not yet done so, I invite you to subscribe to our podcast wherever you get your podcasts. You'll get notifications each week when new episodes are published. And hey, give us a watch on the YouTube channel. We have some fun too with our video guests. I'm Joe Agostinelli, the host of the "CBD University Podcast." Thanks for tuning in.

Kristen: Thanks.

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.