Hemp became a boom crop in Colorado after it was legalized in 2014 alongside its cousin marijuana. CBD, a non-intoxicating cannabis extract that â€” anecdotally â€” has been labeled as a cure-all is driving the growth.
Now that the federal farm bill has made hemp legal to grow across the United States, the Cannabidiol industry could explode. Jamie Schau, senior analyst at cannabis market research firm Brightfield Group, predicts the industry could surpass marijuana sales in the next few years to the tune of $20 billion.
â€śAll of the sudden you can sell products very clearly and legally over state lines,â€ť Schau said. â€śYou can transfer product over state lines. You can create supply chains that are scalable, and quickly scalable.â€ť
Itâ€™s all thanks to the farm bill. Big chains like Target and CVS are chomping at the bit to get CBD on their shelves, Schau said. Giant companies like Coca-Cola are thinking of ways to get CBD into their products.
Boulder-based Charlotteâ€™s Web sells more hemp-derived CBD than any other company in the country. Their 2018 sales are expected to be more than $65 million. The companyâ€™s namesake Â is a little girl who suffered from a rare form of life-threatening epilepsy.
Charlotteâ€™s family was featured in CNNâ€™s 2013 documentary WEED, and her story was seen by millions. After taking CBD oil made by the companyâ€™s founders, her seizures stopped almost entirely. While the cannabis strain she used was low in the compound that gets you high (THC), it was still considered marijuana and only allowed in Colorado.
Families flocked to the state to access CBD oil for their epileptic children.
Hess Moallem, the CEO of Charlotteâ€™s Web, said the need to make CBD more available was quickly realized.
â€śIf we can create this on a commercial scale, and distribute it across the country, we can help so many more people,â€ť Moallem said. â€śNot just those who are sick, but the ones that just need day-to-day benefit from this amazing plant.â€ť
Once the Charlotteâ€™s Web strain was re-classified as hemp, their CBD oil was eventually allowed in most states. That was back in 2014, when the federal government loosened its restrictions around hemp to require it to have less than 0.3 percent THC.
CBD can now be found in candy, skincare, topicals and patches. You can inhale it with a vape pen, you can soak in it with bath bombs. Itâ€™s used for pain relief, anxiety management and as a sleep aid. Charlotteâ€™s Web even started its own product line for pets.
But whereâ€™s the science to backup these claims?
Dr. Jeff Chen, the executive director UCLAâ€™s Cannabis Research Initiative, pointed there havenâ€™t â€śbeen any rigorous human studies testing whether CBD can benefit those conditions.â€ť The extract has been proven to help with certain forms of epilepsy, Chen said, like what Charlotte suffered from. Otherwise health claims are anecdotal.
Now that the federal farm bill has removed hemp and its compounds from the Schedule 1 drug list Chen hopes more research will be done. However, it might be hard to find parties interested in investing in research since hemp is an agricultural commodity.
â€śWhat company is going to step up and pour a billion dollars into studying the benefits of broccoli?â€ť Chen said. â€śThey don’t get to benefit or see a return on investment from that money they put in, because anybody can grow broccoli. Anyone can sell it.â€ť
Despite the lack of scientific support, the market is already there. Charlotteâ€™s Web CEO Hess Moallem said passage of the farm bill means a new day for the company and consumers.
â€śRetailers will be more excited to carry [CBD] and they won’t have the gray area of regulatory concerns or questions,â€ť he said. â€śIt will also be easier for us to advertise.â€ť
The company is already in talks with chain stores about carrying their CBD. He expects sales to increase dramatically, and is already planning to expand operations.
Some local Colorado companies are already all-in. Native Roots, owner of marijuana dispensaries around the state, has a new storefront on the 16th Street Mall in downtown Denver. The high foot traffic location is a little different than their other outlets. This one is Native Roots Wellness, a separate entity that just sells hemp-derived cannabidiol products.
The company said it sees a growing consumer segment who only want CBD without any THC. Thatâ€™s especially true for tourists who visit Denverâ€™s iconic walking mall and want to take their CBD products back home.
Jessica, who was visiting from New York City and declined to give her last name due to her job and the stigma around cannabis, came to the store to shop for her sister. Jessica bought transdermal skin patches and topical cream to address her sisterâ€™s back pain from a degenerative disease. She also bought a vape pen for herself
â€śI have really debilitating anxiety, where doctors have told me to go on medication for it,â€ť Jessica said. â€śI haven’t wanted to, and honestly I’ve tried different medications and they have made me fuzzy. I’m in school, I work in research, I don’t want that.â€ť
Another of the products on the shelf at Native Roots Wellness is CBD-infused coffee. Strava CEO Andrew Aamot said it was tough to find a niche as a coffee roaster in the saturated Denver market. Combining coffee and cannabis was a way to stand out. Hefty marijuana regulations steered him away, so he focused on hemp instead.
â€śWe really see it as our opportunity of helping to create a market that introduces CBD to a population that has never heard of it,â€ť Aamot said. â€śThey’ve never walked into a dispensary. They might have a negative perception of cannabis.â€ť
The hemp industry might be in its infancy, but a growth spurt is around the corner now that the farm bill can provide something all of these business owners want: market access.