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Hemp providing avenue for marijuana businesses to boost profits, extend brands

By Bart Schaneman

Marijuana businesses are increasingly expanding into CBD products derived from hemp, capitalizing on the hemp industry’s growth and less restrictive legal status.


The diversification allows cannabis-infused product companies, in particular, to expand their geographic sales reach, bolster profits and boost brand recognition.

Hemp-derived products don’t face the same restrictions as those containing THC, giving marijuana-infused products manufacturers the opportunity to expand their offerings and sell in new states.

“If you want to build a national brand right now as a marijuana company, one of the great ways to do that is by starting a CBD line to coincide with your THC-based product,” said Scott Giannotti, founder of the New York Cannabis and Hemp Association.

He said that it’s a great way for a cannabis company to expand quickly. Cannabis entrepreneurs can take any profits they make from CBD products derived from hemp oil and reinvest them in their THC business – or vice versa – according to Giannotti.

“The CBD hemp oil piece is a key piece for marijuana companies to expand in a national way and get into all 50 states, because CBD hemp oil products are very different from the CBD-only products that are regulated in other states,” he said.

Similarities spur hemp play

Similarities between marijuana and hemp have spurred companies to work in both areas.

Mirth Provisions Marijuana businesses can easily apply existing production methods – namely extraction – to create low-THC, high-CBD infused products that can be sold across the United States.

Both hemp and marijuana come from the cannabis plant, but hemp is a variety of the cannabis sativa plant that has been bred for industrial uses and CBD properties.

Congress limits THC levels in hemp to 0.3%. Anything higher is considered marijuana and subject to local, state and federal marijuana laws and regulations.

Hemp itself has benefited from rising demand for CBD products and new applications for the plant. It is used for medicines as well as products ranging from clothing to building materials.

The 2014 Farm Bill authorized hemp production for research purposes and select pilot programs. While hemp cultivation was federally prohibited before the 2014 Farm Bill, hemp processing and products weren’t. The United States imports most of its hemp.

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