Marijuana Business Magazine March 2019

Marijuana Business Magazine | March 2019 62 Rather, Fairwinds buys whole-plant CBD oils and CBD isolates from wholesalers in Oregon and Colorado. To sell these products, Hull started a completely separate business entity, Fairwinds CBD, in December 2017. Marijuana businesses interested in breaking into hemp-derived CBD also should be wary of agricultural or indus- trial hemp cultivars that are low in THC and not very rich in CBD. “Many people are extracting CBD from hemp plants not bred for CBD, which is inefficient,” said Guy Rocourt, chief extractor at Papa & Barkley, an infused product company in Eureka, California, that sells goods such as tinctures, capsules, balms and body oils. “You can breed high-CBD plants that look just like any other ‘marijuana.’ They can have lower than the 0.3% limit of THC and be very CBD rich. …Those are the kinds of plants we should be growing and extracting for CBD.” BE ACCURATE IN YOUR CLAIMS Owners of hemp-derived CBD compa- nies must be careful about what they say about their products, including state- ments about the potential health benefits. Fairwinds, for example, opened a hemp-derived, CBD-only facility more than six months ago and has produced and stockpiled federally compliant CBD products, including tinctures for diges- tion, sleep, pain relief and anxiety—as well as vape cartridges. But the company has yet to label them, let alone ship them. Fairwinds has drafted label designs with ingredients and information—such as the ailments the products can be used for—but company lawyers are still reviewing the labels. “We have to be very cautious about what we say about our products and what claims we make. I don’t want to start a business and then three weeks later get a cease-and-desist (letter) from the FDA,” Hull said of the U.S. Food and Drug Administration. “When we launch our product line, I want to make sure we do it right. I don’t want to have consumer confusion. I don’t want to put out a product that says X, Y and Z, and then I get a notification from the FDA telling me I need to change my packaging. Consumer confusion is real. It’s a real challenge to educate, and we have to make sure we put products to market responsibly.” Also, the FDA still hasn’t designated CBD a food additive. So, Hull is unclear whether it can it go in drinks. “Nothing is black and white. Many things are still open to interpretation,” he noted. That said, Hull hoped to have some of these products on the market nationwide before the start of spring. LOGISTICAL CHALLENGES Marijuana businesses angling to break into CBD must also expect to process more hemp, because it produces less oil than marijuana. As a result, MJ entrepreneurs who pivot into hemp will likely need bigger extraction machines, Henderson said. He estimated that a large marijuana company processes 100-300 pounds of cannabis per week, whereas large hemp companies process 2,000-10,000 pounds of the plant each week. How do you prepare for having to pro- cess exponentially more product? “You need more employees, more space, more equipment, larger equipment,” Hender- son said. “It’s two different games.” Although it's these regulatory and logistical demands will likely give would-be CBD entrepreneurs headaches, they believe their investments will pay off in the end. “I think it’ll take people a couple months to figure out what they want to do and how they’re going to create businesses, and hopefully, maybe by June, we’ll see a huge spike in interest,” Extract Labs’ Henderson said. CBD must be extracted from hemp cultivars with a THC content below the federal limit of 0.3%. Photo by Media Collaboratory