2. The Nitty-Gritty of the Market
The only place success comes before work is in the dictionary.
Tell me more about this CBD?
Cannabidiol, commonly referred to as CBD is a naturally occurring, non-psychoactive cannabinoid, with no known human toxicity level or harmful side effects, which has been shown in numerous studies to help treat a myriad of different health conditions.
CBD occurs in nature as Cannabidiolic Acid, or CBDA, and has to be converted into CBD before it can be absorbed into the body, but we’ll get to more into that confusing, sciencey-sounding stuff a little later on.
CBD has a crossover appeal to many different demographics of consumers because it contains all of the positive healing properties of marijuana but without the side effects.
CBD is ‘non-psychoactive’ meaning, it can’t get you ‘high’!
CBD in the US is primarily sourced from domestic, industrial ‘hemp’ which is a subspecies of Cannabis sativa, that has a high naturally occurring percentage of CBD, and a low naturally occurring percentage of THC.
CBD is produced endogenously within the body and plays a vital role in the endocannabinoid system, which aids the brain and body in neural transmission and the regulation of critical bodily functions including appetite, memory, mood, sleep, pain reception, and reproduction.
So yes, cannabis and cannabinoids do have useful applications beyond merely enhancing the sound of a vinyl copy of Dark Side of the Moon.
While the Food and Drug Administration prohibits companies from making claims as to the medical efficacy of any non-FDA approved products, CBD has been studied extensively for years and has shown consistent and promising results in clinical trials as a treatment for inflammation, anxiety, insomnia, and certain types of cancer.
Then again, the FDA allowed Purdue Pharmaceuticals to advertise the medical benefits of deadly prescription drugs like fentanyl, which has greatly helped contribute to a tragic and progressively worsening opiate crisis in America, so can someone please call out this ‘hy-pot-crisy’?
CBD has additionally been reported, anecdotally, as being helpful for a variety of other ailments and health problems.
CBD can be used to make products like oils, creams, lotions, supplements, consumables, and even suppositories, which are kind of a pain in the ass but can be an effective delivery system if you can administer the suppository properly with the right form and technique.
Is CBD safe?
The best car safety device is a rear-view mirror with a cop in it.
Research indicates even large doses of CBD are well-tolerated and safe. There have been some reports of dry mouth, light-headedness, and drowsiness. Compare this to a television commercial about an anti-anxiety medication that may cause anxiety or medication for depression that may cause suicide. And these companies are able to promote these ironically dangerous drugs with side effects, including the problem that the product is intended to treat in the first place, and pitch them on television at all hours of the day, to all demographics of consumers. Drug companies can buy sports stadiums and billboards, and for some reason are considered as an important contributing sector of our economy and not a legal version of the Medellin Cartel.
A recent research review examining the safety and side effects of CBD concluded that CBD appeared to be safe in humans and animals. Even chronic use of CBD by humans showed no adverse neurological, psychiatric, or clinical effects.
CBD lacks the euphoric cognitive effects of THC. In fact, CBD counteracts the psychoactive effects of THC, both in plant form and when administered in an extract.
That’s why BTW, many of us personally prefer products with higher concentrations of THC, in order to reduce the chances of CBD mellowing out our buzz!
Overall, the lower health risks of CBD in combination with its lack of euphoria make it an ideal candidate for patients that want the benefits of cannabinoids but don’t want to get high AF. However, in combination with low doses of THC, CBD can deliver even greater benefits.
By placing oil droplets under your tongue, a high-quality CBD oil is a trusted and reliable method of consumption to get the desired results, however, there are many different form factors and delivery vehicles for CBD consumption that may affect the body in different ways.
Just be honest with me, is CBD really legal?
When a man is denied the right to live the life he believes in, he has no choice but to become an outlaw.
You might be surprised to hear that the answer is- unequivocally, yes, certain CBD products are 100% legal to possess and sell at retail in 48 US States. While many retailers are in a holding pattern, sitting out the category while awaiting further guidance from the FDA, other retailers have recognized that there are in fact currently FDA regulations pertaining to this category, and have been able to adopt positions as first movers in this space, to meet growing consumer demand, without the concern of criminal risk or liability that has become the red herring of this new and emerging market.
Additionally, saying that the ‘jury’s still out’ on something, even if it’s not true, is an amazingly effective approach for blowing off annoying vendors.
For background- All CBD products derived from industrial hemp, containing .03% THC or less were legalized Federally by the 2018 Farm Bill, removed from the Controlled Substances Act, and excluded from the legal definition of ‘marijuana’.
While the Farm Bill legalized all CBD products that meet these requirements from a Controlled Substances Act point of view, all consumer products must still adhere to certain regulatory bodies that in theory safeguard consumers (or the interests of corporate lobbyists at least), such as the FDA.
The FDA has jurisdiction over certain types of consumer products under the Food, Drug & Cosmetics Act (FD&C), giving them wide latitude to regulate these products and their component ingredients.
There is a bit of a misconception that CBD is in a legal gray area until the FDA releases further guidelines. The reality though, is that this isn’t the case, at all!
In truth, the FDA has already issued clear regulatory guidelines on CBD products, and likely may never issue further guidance short of a legislative catalyst, requiring further action.
That being said, Congress can’t even seem to come to a consensus on even the most basic things like whether to keep our government open or if the deadly pandemic that has killed millions and destroyed the economy is even real or actually an evil conspiracy by Bill Gates working in league with Dr. Fauci and Tom Hanks to get rich off of selling vaccines.
Many Americans continue to refuse to get inoculated citing concerns about quick to market brand new vaccines, which might seem reasonable on the surface, but yet, a disturbingly high number of these same contrarians are strangely quick to instead adopt less conventional preventative therapeutic approaches such as taking horse tranquilizers or injecting bleach, or other dangerous chemicals into their blood, which they learned about thanks to the intentional design of Facebook’s newsfeed algorithms.
The odds of Congress getting a cannabis bill or anything else done for that matter leave little room for sweeping change over the next few years.
That being said, without further ado and further guidance, the FDA has clearly stated its position in writing, which is public knowledge published on its website.
What does the law say?
All we know are the facts, ma'am.
The FDA has made clear that topical cosmetic products containing CBD that are not marketing medical claims, are legal to be sold, while consumable products containing CBD, can definitely NOT be sold.
While many mistakenly view this as a complicated issue, that is difficult to make sense of, the bottom line is quite simple-
Topical Products without medical claims- PERMITTED
Consumable Products with or without medical claims- PROHIBITED
Certain other products that are not topical or consumable, may be regulated by other agencies and fall completely outside the FDA’s scope of authority. For instance, candles are regulated by the Consumer Product Safety Commission, which recommends voluntary standards for the manufacturing and sale of candles pertaining to the use of toxic materials and ingredients, and fire-safety design. There is no CPSC, FDA, or any other agency prohibition on the use of CBD in candles.
What about confusing State Laws?
I accept chaos, I'm not sure whether it accepts me.
As if there wasn’t an abundance of inane madness to process already on the Federal level, two States- Idaho, and South Dakota, have passed State laws prohibiting the local sale of any CBD products. While these States can prohibit the sale of CBD products within their borders, they cannot prohibit the transportation of CBD products through their territories, which is considered interstate commerce under Federal jurisdiction, as authorized by the Commerce, and Supremacy Clauses of the US Constitution.
On the other side of the coin, a variety of states have passed local laws permitting CBD to be used in consumable products.
However, because FDA regulations prohibit consumable CBD products even where they are legal under State Laws, this product category still carries risk.
What does this all mean for consumables?
Part of the secret of a success in life is to eat what you like and let the food fight it out inside.
At the end of the day, every company must ascertain their tolerance for risk. There can’t be said to be zero risk for making or selling CBD consumables, however, enforcement is very rare, and the penalties for initial offenses are not particularly punitive.
If you game out the risks of the potential consequences of enforcement vs the opportunity costs of being hemmed in by the exact rules to the extent that it will disadvantage your business, you may decide that a calculated risk is worth it.
What about ‘CBD-free’ hemp products?
A knockoff is not as easy to spot when it comes to love.
Unlike products containing CBD, hemp-seed oil-derived products can be sold in any type of consumer product, including those meant for human or animal consumption. Hardly seems fair, right?
Hemp seed oil products are considered ‘GRAS’ or Generally Recognized As Safe by the FDA and are not subject to the same limitations as consumable forms of CBD products.
Hemp format products can be sold in all US States and territories with no special commercial restrictions. You can find hemp-format products available at even the most risk-averse retailers, including your local Wal-Mart!
What’s the difference between CBD oil and Hemp Seed Oil?
It is easier to denature plutonium than to denature the evil spirit of man.
CBD oil isn’t the same as hemp seed oil, which is sometimes labeled as hemp oil. These products are healthy food additives but don’t contain the many benefits of the cannabinoids that are found most concentrated in the flowers and leaves of the plant.
CBD oil is made from the flower, bud, and leaves of the cannabis plant. Hemp Seed oil on the other hand is made from the hemp seeds and doesn’t contain any CBD.
Hemp Seed oil does not fall under the same categoric restrictions that limit CBD products from being sold as food additives or supplements by the FDA.
Hemp Seed oil can be used topically for skin health, and it can be taken orally as a supplement or food additive.
What Are the Most Common Types of CBD Extracts?
There surely is in human nature an inherent propensity to extract all the good out of all the evil.
Isolate
There surely is in human nature an inherent propensity to extract all the good out of all the evil.
Isolate refers to a type of CBD that is isolated from the rest of the compounds in the cannabis plant. After CBD concentrate is extracted and separated from the rest of the compounds in the plant, it then goes through a ‘winterization’ and ‘vacuum refinement’ process, which separates the remaining waxes and undesired compounds from the cannabinoids, or other target chemicals. This process can create a CBD product with a purity level of 99% CBD or greater.
Full Spectrum
If I had asked people what they wanted, they would have said faster horses.
Full-spectrum CBD extracts a full profile of beneficial cannabinoids and terpenes from the cannabis plant. Sometimes referred to as whole plant CBD, full-spectrum will contain trace amounts of THC, but not enough to get you ‘high.’ This type of extract is the most holistic, and therefore likely the most beneficial.
A 2018 study suggests that full-spectrum CBD is more effective for pain than CBD isolate because of the combined effects of CBD and THC. Another advantage of full-spectrum CBD is that it is less processed and more natural than CBD isolate.
Broad Spectrum
If at first you don't succeed, try hard work.
Broad-spectrum CBD is the middle ground between isolate and full-spectrum CBD. It begins as a full-spectrum oil, with a full range of beneficial cannabinoids and terpenes, but it then goes through a refinement process to remove all THC compounds.
What about CBD for my Emotional Support Pelican?
A black cat crossing your path signifies that the animal is going somewhere.
Any CBD and Hemp Products intended for use on animals, that are introduced into interstate commerce, generally fall under the same regulatory authority as products intended for humans and are broadly governed by the FDA in several different categories including cosmetic and topical use, ingestible ‘GRAS’ or ingestible ‘adulterated’, dietary supplement, drug, or other.
Cosmetic or topical products and most of the ingredients contained within are not subject to premarket approval by the FDA. Furthermore, the FDA has specifically clarified that there is no prohibition of the use of CBD in these products, provided no unsubstantiated claims are being marketed as to the medical efficacy of these products.
Hemp foods derived from the seed, stalk, or fiber of the cannabis plant are considered by the FDA to be ‘GRAS’ or ‘Generally Recognized As Safe’ to be sold and marketed in animal food products, provided they meet all other applicable regulations pertaining to food production and safety
Food additives and/or dietary supplements containing CBD are not currently considered by the FDA as GRAS for animal consumption under the FD&C, and are subject to market restrictions, though these products have been explicitly permitted under State laws in a variety of jurisdictions.
Hemp-Derived CBD products not intended for human consumption, nor topical application, fall outside of the FDA’s jurisdiction, however, depending on the product type, could conceivably fall under the scope of authority of another regulatory agency.
Risk & Enforcement
Last time I checked, we’re cops. We can’t turn down donuts. People will talk, Daniel.
To date, as far as we’re aware of, the FDA has only taken action against products and companies marketing CBD foods for human or animal consumption in cases where claims were being marketed regarding the efficacy of CBD products.
While it’s possible that the FDA could issue further ‘cease and desist letters’, and/or fines (minimum of $500, not to exceed $2000) to any company that is selling CBD consumable products that have been introduced into interstate commerce, the risk is extremely low, and so far non-criminal penalties, such as cease and desist letters have only been imposed in cases where there was the presence of not only interstate CBD consumables but additionally met the test of marketing claims of efficacy that were unsubstantiated by the FDA.
As a result, most companies are trying to get away with as much as they can, make as much money as possible while the going’s good, and hope they don’t get caught! This might not be the greatest business plan in the world per se for the long haul, but it seems to have worked for them so far.
CBD Me-too
What's another word for Thesaurus?
One of the biggest problems in the CBD market is that basically everyone is making the same exact products with little to no differentiation. Worse yet, many of the brands order their inventory builds from the same big white label manufacturers and co-packers creating even more homogeneity in the marketplace.
It’s fair to say that many of the companies in the space could be defined as online marketing companies. They book orders between the manufacturers and their retail or distribution customers or end-users.
The new brands that Bob has seen in the space that have had the most success had great prices and pre-existing relationships with distributors.
On the flip side of this, Bob has seen one too many customers try and do something stupid, just for the sake of doing something different. As a white-label manufacturer, he sees this with clients that want to add ingredients that don’t make sense into a product like Acai Berry, or Ashwagandha root.
For instance, Bob was explaining to a white label customer of his that to have an effective dose, their customers would need around 600-800mg of the Ashwagandha root powder which would require a serving size of 3-4 softgels. Bob told the customer that he didn’t recommend using this ingredient for that reason.
The customer told Bob to just make the serving size one softgel. They said that they didn’t care if the product was effective, they just wanted a little of the Ashwagandha root in there for its marketing value.
Bob refused to play along with the hoodwink on their customers, but unfortunately, this incident is far too common in the space.
What about other naturally occurring cannabinoids?
CBG
Cannabigerol (CBG) is a non-psychoactive cannabinoid that has shown the potential for having many health benefits and possibly greater efficacy on the endocannabinoid system than CBD or THC.
CBG is called the ‘mother cannabinoid’ because the breaking down of cannabigerolic acids (CGBA) by enzymes in the cannabis plant cause CBGA to be converted into other cannabinoids- CBCA, CBDA, or THCA, which then, in turn, degrade into CBC, CBD, or THC when exposed to intense light or heat.
If at any point you feel like you might have an acronym aneurysm, then, please, by all means, put this down for a second and get up, take a deep breath, and stretch. If it’s a nice day then go for a walk and try and clear your head of this absurd fog of delirium.
CBG may have the greatest efficacy on the endocannabinoid system of all cannabinoids because it binds strongly and directly to the CB1 and CB2 receptors in the brain.
CBG has been shown to act as a neuroprotector and aid in the function of anandamide, a critical neurotransmitter that helps to regulate many human functions including sleep, mood, appetite, and pain.
While there haven’t been many studies done yet on humans, tests on animals have shown promising treatments for glaucoma, inflammatory bowel disease, Huntington’s disease, cancer, loss of appetite/weight, bladder disorders, and has additionally shown antibacterial properties.
If it’s good enough for a rat, then it’s good enough for me!
Like other cannabinoids, CBG has not been shown to have harmful side effects or the potential for a fatal overdose.
Because CBG naturally converts into other cannabinoids during the plant’s life cycle, it’s not typically found in large quantities in mature plants. Due to this, it’s more expensive to produce than CBD or THC, though demand and innovation are driving down the cost of production.
CBC
Doing nothing is very hard to do… you never know when you’re finished.
Cannabichromene (CBC) is a non-psychoactive cannabinoid, and one of the three major branches of cannabinoids including CBD, and THC, which are the byproducts of the degradation of CBGA.
While CBC is only able to weakly bind to the CB1 receptor, it has been shown to work especially well in conjunction with other cannabinoids for regulating anandamide and shows promise for treating pain and inflammation, cancer, acne, depression, and helping to promote healthy brain and nerve function.
Surprise, surprise, like other cannabinoids, CBC has not been shown to have harmful side effects or potential for a fatal overdose.
CBN
A day without sunshine is like, you know, night.
Cannabinol (CBN) is a non-psychoactive cannabinoid that’s caused by the degradation of THC. CBN is known for causing drowsiness in conjunction with THC and has also shown promise as an antibacterial agent, a neuroprotectant, appetite stimulant, anti-inflammatory, and as a treatment for Glaucoma.
Again, for redundancy’s sake let it be said for the record that CBN also has not been shown to have harmful side effects or potential for a fatal overdose.
CBL
I haven't spoken to my wife in years. I didn't want to interrupt her.
Cannabicyclol (CBL) is a non-psychoactive cannabinoid that’s caused by the degradation of CBC. CBL occurs in such small quantities that it makes production a challenge and to date, it hasn’t been extensively studied, though it’s thought to contribute to an entourage effect in conjunction with other cannabinoids.
CBL is actually a really harmful, dangerous, and toxic cannabinoid that is likely to cause a fatal overdose… no… no… it won’t… that was just a test to see if you’ve been paying attention. Like the other cannabinoids that came before it, CBL has not been shown to have any harmful side effects or potential for a fatal overdose.
Legality
No man goes before his time — unless his boss leaves early.
Like products containing CBD, products containing these cannabinoids or terpenes cannot be marketed for their ‘unproven’ medical effects. However, unlike CBD or THC, these cannabinoids or terpenes are not ingredients in a drug that has already been approved for use by the FDA.
Therefore, unlike CBD or THC, these cannabinoids or terpenes are not considered drugs or ‘unapproved drugs’ under FDA regulations.
Product Applications
Due to their powerful anti-inflammatory properties, products containing CBG & CBC (& terpenes) show promise for a wide range of topical, transdermal, and consumable products.
As neuro-protectants, these cannabinoids would work well with a variety of nootropic ingredients in a Softgel form factor. Additional dietary supplements could include products for sleep, anxiety, appetite stimulation, bladder strengthening, and as a mood-enhancer (anti-depressant)
As appetite stimulators, these cannabinoids would be beneficial in food and beverage products. Some additional topical applications include acne cream, triple-antibiotic ointment, and hand wash. CBG/CBC products can also include CBD. With mood-enhancing and calming properties, these cannabinoids are a good fit for inhalable and aroma therapy-based products like candles and diffusers.
What about synthetic or other hemp derived cannabinoids?
While organic THC products made from natural marijuana plants are highly regulated and illegal in some states, and still Federally, synthetic THC analogues, and other hemp derived designer drugs, that have taken advantage of loopholes in the Farm Bill. This means that these products are by and large considered Federally legal, even though the effects of these products are as strong or even stronger than the real thing.
In some cases these compounds have been banned by individual states.
Delta-8
CBD’s red-headed stepchild is Delta-8 THC. Delta-8 THC is a synthetically produced THC product that is derived from legal hemp. Because it comes from industrial hemp, Delta-8 has managed to slip through the cracks in the 2018 Farm Bill, and is legal for sale in most states. Dubbed a ‘cannabis-lite’, Delta-8 gets users high, though is not as strong or effective as natural Delta-9 THC.
The biggest enemy of the Delta-8 movement is the state regulated THC industry. These companies have had to jump through hoops and over prohibitively high and expensive barriers for entry to produce and sell legal marijuana and their markets. They are currently under attack and being undercut by a flood of unregulated, unaccountable, and fly by night brands and products.
THC-V
A diamond is merely a lump of coal that did well under pressurel.
Tetrahydrocannabivarin (THC-V) is a cannabinoid usually derived from hemp that is supposed to have benefits as a weight-loss suppressant and treatment for diabetics. Also, it can get you high!
THC-O
“Even if you are on the right track, you will get run over if you just sit there.
Tetrahydrocannabinol (THC-O), otherwise known as THC-O acetate, is a synthetic cannabinoid that’s supposed to be 3 times more potent than THC.
HHC
My fake plants died because I did not pretend to water them.
Hexahydrocannabinol (HHC) is a mildly psychoactive cannabinoid that is derived from industrial hemp, and sold legally all over the country, despite its intoxicating effects.
Key Chapter Takeaways
The Do’s and Don’ts of the Dope Industry
- Do– Put time and thought into understanding the type of product you want to make
- Do– Understand the different components in cannabis products that contribute to their taste, potency, or effect.
- Do– Get familiar with the different types of cannabinoids and the laws and market opportunities that are available for various product applications.
- Don’t– Be surprised or discouraged by the fact that all consumable CBD products are prohibited by the Federal Government.
- Don’t– Just make more of the same me-too products as everyone else.
- Don’t– Don’t forget to research your purchases and buy from well established, and well-reviewed companies