Hemp Legalized. Now What?

On December 20th, President Donald Trump signed the 2018 Farm Bill, So what does it mean for direct sellers eyeing the revenue potential of the cannabis market?

The bill:

  • Legalizes the production of industrial hemp.
  • Puts the production of industrial hemp, now considered an agricultural product, under the supervision of the Agriculture Department.
  • Removes CBD—the non-psychoactive compound found in hemp—from the purview of the Controlled Substances Act, which covers marijuana.
  • Allows states to regulate hemp production, commerce and research, with approval from the USDA.
  • Allows companies to legally market and distribute CBD products, which have already started to turn up in beverages, health products and pet snacks.

Companies eager to sell CBD products should note, however, that the farm bill also “explicitly” preserved the Food and Drug Administration’s authority to regulate products containing cannabis, or cannabis-derived compounds. Upon the signing of the bill, FDA Commissioner Scott Gottlieb, M.D., issued a statement that included the following:

FDA to Chime in Soon on CBD

“We’re aware of the growing public interest in cannabis and cannabis-derived products, including cannabidiol (CBD). This increasing public interest in these products makes it even more important with the passage of this law for the FDA to clarify its regulatory authority over these products. In short, we treat products containing cannabis or cannabis-derived compounds as we do any other FDA-regulated products—meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance.”

One major challenge direct selling companies will face in selling CBD products is the language used for promotion. As Gottlieb noted in his statement:

“We continue to be concerned at the number of drug claims being made about products not approved by the FDA that claim to contain CBD or other cannabis-derived compounds. Among other things, the FDA requires a cannabis product (hemp-derived or otherwise) that is marketed with a claim of therapeutic benefit, or with any other disease claim, to be approved by the FDA for its intended use before it may be introduced into interstate commerce.”

So, while the Farm Bill has cleared the way for companies to bring CBD products to markets, it may be a longer road to market than anticipated. There is still much work to be done at the state and federal levels, and direct selling companies with intentions of selling CBD products should ensure their legal departments are well versed in cannabis law and their distributors understand what can and cannot be said about CBD oils.

More Direct Selling Companies Entering CBD Space

ForeverGreen, the Lindon, Utah-based direct selling company stated it has had on-going discussions about using CBD in some of its top-selling products. Given the growing awareness of the potential health benefits of CBD, ForeverGreen, which has incorporated CBD in past products, has decided to expand its presence in the category. The company plans to unveil a larger portfolio in the coming months and anticipates the new products will first be available in its European markets.

“The focus of the company has been to develop products that will distinguish the company,” said Joe Jensen, ForeverGreen’s chief executive officer. “We believe that we can incorporate CBD into some of our existing product lines and are in ongoing discussions to add new products that may benefit from the addition of CBD. Our products already have tremendous advantages, which could have additional health benefits with CBD incorporated. The company is poised to capitalize on this movement globally.”

Touchstone Essentials announced it has expanded its CBD oil line. “Research suggests that cannabinoids, especially cannabidiol (CBD), has a range of benefits from calming temporary inflammation to easing the effects of everyday stress and more,” said Touchstone Essentials founder and CEO Eddie Stone. “I experienced these benefits firsthand after a devastating elbow injury that required emergency surgery. Full-spectrum hemp oil gave me fast relief, eased my discomfort and supported my recovery.”