Many states allow marijuana producers to sell hemp-derived cannabidiol which will create competition with MJ producers.
Nowadays, more states permit to sell hemp-derived cannabidiol (CBD) products at marijuana shops, making this sphere more competitive. As a result, hemp and marijuana growers will participate in this competition affecting MJ’s monopoly.
Earlier, those states that didn’t allow selling cannabidiol in shops (including Colorado) permitted only the chemical compound that was got from a cannabis plant with a tetrahydrocannabinol (THC) concentration not less than 0,3%.
But hemp-derived cannabidiol has an advantage over cannabidiol that includes THC. As a result, hemp growers and creators will have a competitive advantage in the stores in comparison with their marijuana counterparts.
Hemp producers don’t have not as many legal hoops to go through as marijuana producers. Hemp cultivators don’t need to do seed-to-sale tracking, for example. Besides, their tax rate is set at a fraction of the rate of marijuana.
Shawn Hauser is the partner at «Vicente Sederberg» law firm based in Denver which focuses on cannabis production and selling. Hauser said that it is hard for companies selling hemp and marijuana as they compete in the same business sphere.
Illinois and Colorado are the most recent ones where cannabidiol and different hemp-derived products can be finally sold in marijuana stores. The development of the industry led to the creation of a new sales outlet.
As there are no specific regulations made by the US Food and Drug Administration, each state has its own regulations for the hemp selling in medical marijuana centers and recreational shops. The changes in the Colorado start to issue from July 1.
Shawn Hauser said that in her opinion, such a situation is really beneficial for the cannabidiol sphere, as the market suffers from an economic crisis right now. As a result, Hauser stated that creating the new outlet where it is possible to sell hemp products, will definitely improve the hemp business sphere and develop relations with suppliers.
Besides, one more incredible advantage is that the development of competition will make companies work on their pricing strategies. Thus, more affordable prices for products will be set, as the monopoly of MJ will be destroyed, so MJ won’t be able to choose any price.
The most recent analysis provided by Hemp & CBD Factbook was based on data received in 2018. It says that 10% of cannabidiol sales were made in recreational marijuana shops. Besides, many of these shops were selling MJ-derived cannabidiol. During that time, a lot of shops (including the ones located in Colorado, California, and Washington) prohibited selling help-derived cannabidiol. But there were 10 US states that offered permission to sell hemp-derived cannabidiol products in marijuana shops after the passage of the Farm Bill in 2018.
Hauser mentioned that not only Colorado and Illinois made significant changes, as some other states did it as well. Here are these states:
• New York.
Each state has its own regulations and approaches connected with the hemp sphere.
The policy created in Illinois was announced in March and covers the period of time until October, which is also the expiration time of the Farm Bill made in 2014.
Of course, the new policy of Illinois could last for a longer period of time, but its future is unpredictable. Illinois is one of 20 US states that want to work based on less strict 2014 Farm Bill for the 2020 season.
Of course, the restrictions and regulations developed by US states are really similar, for example, all of them require to test hemp for potency and contaminants and also to prove that the specific product was created legally. But still, the policies of different states are not completely the same, as a result of which businesses are struggling with understanding all requirements.
Illinois permits to sell any part of the plant, while Colorado doesn’t give such permission. Besides, it is prohibited in shops of Colorado to get or sell plant material, including flowers, fan leaves, and trim.
The US Food and Drug Administration stated that cannabidiol and all other hemp-derived products can’t be placed and sold in meals and food supplements. However, the administration didn’t force anyone officially to follow this position; the only exception is the situations when companies make false claims about their products.
Smoke Wallin is the CEO of «Vertical Wellness» based in Los Angeles. He said that every company connected with the hemp business is dealing with the position of the Food and Drug Administration that prevents ingestible, however, the US states are trying to ignore this position, as they want customers to be able to get ingestible if they want. As a result, it is really confusing for many companies to understand what’s allowed and what’s not.
Everyone requires clear information in the hemp sphere.
Smoke Wallin mentioned that his company is not focusing on hemp retail in marijuana stores now, although the company is developing in online sales since the quarantine period caused by the coronavirus. But still, Wallin said he would try to find out states where he would see an incredible opportunity to sell in dispensaries. He also stated that the Food and Drug Administration together with Congress should establish specific rules that could be followed by everybody, as right now it looks like every state is standing for itself.
Cannabidiol and similar products like smokable hemp, for example, could be found online or in some stores without any problems for years, and there wasn’t any strict supervision from states or the federal authorities before.
Michael Bronstein who is the president of the American Trade Association for Cannabis and Hemp said that it will take time before customers will be able to find the products of big brands because of the changes in state policies. He added that it is so because these brands don’t find any certainty and everything is unclear for them. And these regulations are not only connected with the products, as they are also connected with insurance and banking issues.
Jay Evans is working as a CEO in «Keirton» based in Surrey (British Columbia). He stated that he thinks that states decided to allow selling hemp in the MJ shops because consumers are interested in getting quality cannabidiol products.
Equipment made by «Keirton» is used to process cannabis in 30 countries.
Jay Evans also said that that if it is needed to regulate hemp, then dispensaries are the best spots for doing it, as they already have the necessary system set up.