Cannabis brands often struggle from the jump. Getting started is difficult with license lotteries and lack of access to capital, and things rarely get easier once open for business. High taxation, inability to sell or market directly to consumers, and other problems arise regularly, even for the most efficient brands. Meanwhile, the hemp-derived THC space is soaring with interstate commerce, direct-to-consumer sales, and lower taxes than state-regulated cannabis. Could hemp save the cannabis industry?
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These benefits haven’t gone unnoticed. In the last year, veteran, multi-state cannabis brands have been launching new hemp-derived lines of their products, expanding their once limited consumer base to the rest of the U.S. Kiva recently made a move launching delta-9 THC Camino Gummies, now available in five flavors wherever the Farm Bill allows.
“Opening up this new channel for people ensures Kiva is protecting consumers by providing access to safe products for adults who live in a state where cannabis is not yet legal or who live in places without easy access to a regulated dispensary, to add to the growing number of adults who want to use cannabis for increased wellness, enjoyment and self-care,” said Adam Grablick, COO, Kiva Confections, in a press release.
A giant like Kiva moving into Delta-9 was once considered risky, but so was the idea of gorgeous, crystalline extracts when people were figuring out wax in 2011. And look at us now.
Unwritten loopholes in the Farm Bill grant hemp-derived THC the gray area to operate. The entry of Kiva and similar brands like MAISON BLOOM and Mary Jones may ring of a legal black-and-white era to come, but both spaces have their challenges. CV Sciences’ PlusCBD has some products made with hemp-THC. Andrew Dorf, CV Sciences VP of sales and marketing, illuminated some hurdles in the sector.
“Both the hemp and cannabis industries operate within a complex regulatory landscape. While hemp-derived THC products may have legal status under certain circumstances, they still need to navigate regulations that vary from state to state that can be confusing and, in many cases, contradictory. Ensuring compliance with these regulations can be a significant challenge,” Dorf said.
On top of the patchwork compliance, hemp companies aren’t given open access to banking, credit, and lending. Additionally, quality and safety are often self-regulated. While Dorf offers that PlusCBD holds its products to stringent standards, the same can’t be said for every hemp brand. The thought might be alarming as more products make their way onto gas station shelves, readily available without testing or safety standards.
In Minnesota, delta-9 THC is available in multiple forms at breweries, grocery stores, bars, liquor stores, and restaurants. A canna-curious consumer who is uninterested in the latest strains or weed culture has no need for the dispensary. This question is probably on the minds of state operators, who often have to jump through regulatory loopholes to cash in on the promised green rush. Meanwhile, hemp THC brands seem to have struck gold.
John Dugas founded Superior Molecular, a Minnesota-based extraction company that provides cannabis inputs to large breweries and cannabis brands. They also host an e-commerce store with direct-to-consumer hemp THC products. The company operates in Minnesota, where a contentious talk of how the hemp THC and state-regulated cannabis could co-exist took place. Dugas expressed hope for the future.
“At some point, the black market will persist so long as the Farm Bill loop remains unchanged and hemp-derived products are allowed to be sold in recreationally legalized states. Our hope is the hemp-derived THC market serves as the framework or blueprint for how ALL THC, regardless of the source, could safely be sold in the consumer marketplace as another commodity,” Dugas shared.
Compliant operators continue struggling, and now, some have opted into both markets. This move officially signals industry interest in making the big switch. The policymaking and regulatory shuffling required to make any moves in the cannabis space is extensive, so it’s hard to say what it would take to apply the same regulations to the whole industry.
If it’s ever pulled off, purists will appreciate the reunification of hemp, cannabis, marijuana, D9, and all of the other iterations used to take advantage of Farm Bill loopholes. The feat may also provide weed companies a long-needed lifeboat in the struggle to survive a nascent market.
