Lot of panic out there based on trading action Friday and so far today..
I have listened to MacKays presentation a few times...he has laid it all out for them....he explained that the FDA has the regulatory framework in place....
He states...."You have to separate an agricultural commodity from a controlled substance"
Current USDA and FDA regulations currently allow VERIFIABLE HEMP SEED SOURCE. (Seed licensing scheme )
He mentions International's Hemp Supply Scheme advocates verifiable sources of hemp based products for the industry. Hemp can be safely regulated. Current FDA regs allow natural derived ingredients to co-exist as conventional foods and dietary supplements.
This comes down to type of Hemp being used.
Hemp extracts are significantly different from Marjuana.
Key Points
CBD used for the treatment as a drug requires different regulation...(DRUG APPROVAL)
CBD used (hemp extract different from purified CBD) a food ingredient or dietary supplements have approval paradigms in place.
Most importantly he described to the FDA the process of how the CVSI manufacturing of CBD is tracked and verified.
He did an excellent job of explaining high potency CBD "Isolate" and how that cannot be free flowing in the food supply ..
FDA can simply regulate CBD by via verifiable food fiber hemp source. He mentions the difference between Marijuana CBD and Hemp CBD...and there in is what he is speaking to.
Also that the USDA and FDA synchronize the process to differentiate the two
This is the first step in their thinking I would hope.
The FDA has to separate agricultural hemp (and the CBD derived from it) from other sources of CBD (Isolates and from the CBD derived from marijuana.)
Bottom line....(This is my opinion) ....the FDA is going to have to start with the separation of agricultural hemp from the other sources...
The framework is in place of all of this. Either the FDA will act and do this.....or the CRN, and National Hemp Association and other lobbying groups will then turn lawmakers to move on this...and realistically the existing farm bill would only need an amendment to put this in place. One other very important point worth mentioning....Farmers growing hemp WITHOUT the ability for companies to extract CBD from the plant will make only a fraction of revenue per hemp acre versus WITH CBD extracted from their hemp plants. This will get the attention of McConnell and et,al who sponsored the bill.
This is a few days old...(May 30) but worth the read.....Article appears on the TD Ameritrade site.
Upcoming CBD Shortage is an Opportunity for Cost-efficient Producers to Expand
8:50 am ET May 30, 2019 (PR Newswire) Print
Few developments have been as game-changing for the cannabis industry as the U.S. Farm Bill. While demand for cannabis will remain strong over the upcoming years, experts are anticipating that the hemp industry will become a new big player in the marketplace. Ever since hemp agriculture was legalized thanks to the U.S. Farm Bill signed December last year, cannabis companies around the world have jumped on the opportunity to get in on ground zero of this sector. Well known Canadian listed companies such as Charlotte's Web Holdings Inc. (OTC:CWBHF) (CSE:CWEB), CV Sciences Inc. (OTC:CVSI), Liberty Health Sciences (OTC:LHSIF) (CSE:LHS), Namaste Technologies (TSXV:N)(OTC:NXTTF), and StillCanna Inc. (CSE:STIL) (OTC:SCNNF) have all been making major moves in the growing hemp market.
Analysts at the Brightfield Group predict CBD will grow from a $600 million sector this year to $22 billion by 2022. With the US Farm Bill in effect, demand for hemp is expected to spike over the upcoming year as cannabis companies switch to sourcing hemp for their CBD.
The Growing Market for Hemp
While interest in hemp-based products has been growing, the current demand is only at a fraction of what it is expected to be. Just as Canadians saw drastic supply shortages after the demand for cannabis spiked post-legalization, so too will the CBD industry. For this reason, companies that can scale up hemp production in a way that's cost-efficient are in the best position to dominate the market when CBD supplies become tight.
One of the first-movers in Europe when it comes to cost-efficient hemp cultivation is an up and coming company called StillCanna Inc. (CSE:STIL) (OTCPK:SCNNF). The company boasts one of the lowest production costs of CBD isolate with a production cost of just $744 per kg. The wholesale price for hemp isolate is currently $6,077 per kg. Their new facility in Poland is expected to bring 2019's production output up to 16,000 kg and in 2020, the Company's output is expected to produce over 40,000 kg of CBD isolate.
Hemp-derived products are quickly becoming mainstream as Dr. Oz and Dr. Gupta spoke about 'The CBD Oil Boom'. Even retail chains that haven't traditionally embraced cannabis products, such as drug store chains and pharmacies, are stocking CBD products now. Walgreens has already announced they will be selling hemp-derived products in over 1,500 stores recently. Another major retailer, CVS, is already selling hemp products at over 800 locations in the U.S.
Charlotte's Web Holdings Inc. is perhaps the biggest player in this market. Producing around 675,000 lbs of hemp in 2018 with more than 700 acres planned in 2019, the company's revenue increased by 74 percent last year. The second largest company in the hemp market, CV Sciences Inc., has also seen significant growth even prior to the US Farm Bill passing. Over the past year, the company's sales have increased by 200 percent and currently holds 11% of the overall hemp market.
Many retail-based cannabis companies have already embraced hemp-products into their line-up with great success. Namaste Technologies is one such example. Unique in the sense that they focus exclusively on online sales, the company owns 24 unique websites and brands, with many of them focusing on hemp products. Even in the medical market, hemp has surged in popularity. Companies that focus mainly on the health sector, such as Liberty Health Sciences, has seen a surge of hemp-product sales based on the reported medical benefits of the plant.
The Rise of Cost-Efficient Producers
StillCanna Inc. (STIL-SCNNF) has also been completing several strategic partnerships to further expand its capacity. They just recently finalized a deal with California-based BioSciences Enterprises for C$36 million, giving them a steady pipeline to sell their European produced CBD into the U.S. market. Richard Parker, President of Biosciences, said that "not a day goes by that our firm isn't looking for a company like StillCanna, but finding a knowledgeable seed to shelf CBD manufacturer in this young industry is extremely rare."
Other major deals that StillCanna signed include a $48 million agreement with one of the biggest CBD retail suppliers in Europe, DragonFly BioSciences. The deal would see StillCanna act as DragonFly's sole processor of CBD, a significant achievement for a company that small.
Further Cannabis Developments
Charlotte's Web Holdings Inc. (OTCQX:CWBHF)(CSE:CWEB) recently posted their Q1 earnings report for 2019. So far Q1 sales grew by 66% to $21.7 million, impressing analysts with steady growth. Ever since Congress passed the Farm bill legalizing hemp production, analysts expect this to be a game changer for the company.
Cannabinoid (CBD) oil is being used in a study with patients suffering from Post-Traumatic Stress Disorder (PTSD). CV Sciences Inc. (OTCQB:CVSI), a manufacturer of hemp base CBD-products, will be using their signature CBD-oil products in this clinical trial published in the Journal of Alternative and Complementary Medicine.
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