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An $867 billion farm bill that was passed in Congress December of 2018 will fund food stamps, crop subsidies and—to the glee of many stock promoters—legalize industrial hemp, a source of the popular ingredient cannabidiol, or CBD. Brace yourself for CBD-infused drinks, foods, candy and cosmetics.

The most significant impact of the farm bill will be its funding of 10 more years of farm subsidies. But hitching a ride on the farm bill wagon are provisions that decriminalize hemp. Technically speaking, hemp has been a controlled substance under federal law and could only be grown with a license under certain state research programs. The new farm bill will allow hemp cultivation without a license in every state.

Hemp has lots of CBD, but little of the buzzy ingredient known as THC that makes the plant’s cousin marijuana so popular at parties. In fact, the main difference between the two plants is their respective levels of CBD and THC. Marijuana will remain illegal under federal law, regardless of its legality under local law in dozens of states.

Cannabidiol (CBD) Properties
Products with a little bit of CBD as a “food additive” have been available for a while from small outfits such as the yet-unprofitable New Age Beverages (NBEV). With the farm bill assuring the federal legality of hemp production and distribution, big firms may now start putting CBD as a “functional” additive in drinks—along the lines of Coca-Cola ’s Vitaminwater.

Canadian cannabis leaders such as Aurora Cannabis (ACB) have long harbored hemp ambitions, and beverage giants such as Coca-Cola (KO) and PepsiCo (PEP) may finally make their long-rumored entries into the CBD-drink space. Cannaccord Genuity analyst Bobby Burleson estimates that CBD-infused beverages could become a $260 million market by 2022.

Fans of CBD have also touted the stuff as a panacea for anxiety, pain, and even inflammation. Another benefit of the farm bill’s passage should be an increase in the scientific testing of cures claimed for CBD and the hundred-odd other cannabinoids in hemp and cannabis. In the past few years, the FDA has sent warning letters to marketers of CBD-based products that the agency said were making unapproved drug claims, or which didn’t contain the levels of CBD advertised. In a 2017 study published in the Journal of the American Medical Association, researchers analyzed CBD products from 31 companies and found that 70% didn’t contain the labeled amounts of CBD.

One of the recipients of an October 2017 warning letter from the FDA was a Boulder, Colo., company that is one of the rare cannabis or hemp businesses that makes a profit. Charlotte’s Web Holdings came public this year on the Canadian Securities Exchange and sells CBD-rich oils in 3,000 retail locations. It earned $9 million, or 10 cents a share, on revenue of $48 million in the nine months ended September 2018.

The FDA’s October 2017 warning letter scolded Charlotte’s Web for its website, where visitors at the time could find discussions of CBD as a treatment for breast cancer and diabetes. The agency argued that Charlotte’s Web was obliged to test its product as a drug. In recent investor presentations, Charlotte’s Web says that it disagrees, but “is still in active discussion with the FDA” and has yet to resolve the agency’s concerns.

On the CSE, shares of Charlotte’s Web (CWEB.Canada) have climbed nearly 50% in the past week, to a current price of 16 Canadian dollars apiece. The company and other marketers of hemp-derived CBD think the farm bill will lift a cloud from their industry. The bill’s passage will be “a catalyst for growth,” Charlotte’s Web CEO Hess Moallem said in his company’s recent earnings release.

“We have contributed to and support this important legislation from the beginning,” said Moallem, “for the positive impact it will have on consumer access.”

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If you only know three letters associated with cannabis, they’re probably T-H-C. But there’s another term on the rise. The active ingredient CBD, one of more than 100 chemicals in cannabis, is emerging as a popular wellness ingredient. The plant extract, often consumed as an oil under the tongue, is now the featured ingredient in high-end products including coconut oil, body lotion, face serum, olive oil, jam, bath scrub, cold-brew coffee, sports salve, lip balm, infused water, gummy snacks and dog treats. Products’ prices vary but may cost about triple what their CBD-less counterparts do.

Unlike THC (Tetrahydrocannabinol), CBD (Cannabidiol) won’t get you high, and it’s becoming so mainstream that even Coca-Cola may have interest in a CBD drink.

What is Cannabidiol?
CBD is a non-psychoactive chemical compound – meaning it won’t alter a person’s mental state – that can come from two different cannabis plants: The hemp plant (with less than 0.3 percent THC present) or marijuana plant (where there’s much more psychoactive THC). CBD products tend to be derived from hemp.

There are still plenty of unknowns when it comes to CBD. The FDA has only approved the use of CBD oil in specific cases of epilepsy. Epidiolex, the FDA-approved CBD drug, was placed in the “least restrictive” category of controlled substances by the Drug Enforcement Agency, meaning it’s in the same category with cough medicine Robitussin AC.

More: FDA approves first marijuana-based epilepsy drug: CBD oil

Laws surrounding the sale of hemp CBD are murky at best; products made with the cannabinoid are not legal in all 50 states, though the oil is legal in more states than medicinal marijuana.

Even in California, where recreational marijuana consumption is legal for adults 21 and older, there are complicated rules. And yet, even with new guidance on CBD use in food products in the state, the industry continues to grow.

“A lot of states only allow CBD for a limited amount of medical conditions. But they’re not checking the mail, not checking these other companies that are shipping in,” Kristen Yoder, host of podcast CannaBS Detector, said at the first-ever CBD Expo in Anaheim, California. “People are gonna push the envelope until they get in trouble.”

The appeal and drawbacks of CBD
The FDA has approved of the use of CBD to treat Lennox-Gastaut syndrome and Dravet syndrome, two forms of epilepsy. So what’s the draw of the chemical compound for everyone else?

Pro skateboarder Matt Miller, who started CBD brand Miller Healer, turns to CBD sports salve and patches as his primary medicine. Stacy Verbiest, who founded therapeutic women’s cannabis line Wink with creams and tinctures, says CBD helped her friend manage severe pain. Pet owners buy cat and dog treats with the hopes of helping their best friend feel happier and more comfortable.

Greg Avetisyan is co-founder of the CBD store Topikal Everything Hemp, which just opened a second California location this year. “Though not medically proven, CBD’s main purpose is to help alleviate inflammation,” he said. “So when people use CBD by itself, they’re getting the medicinal benefits of the plant without the psychoactive effects. It treats a lot of different anxieties and pains.”

THC, meanwhile, helps with “pain relief, sleep and opening up the appetite,” Avetisyan says. He and his brother opened Topikal because they prefer treating their conditions – he has rheumatoid arthritis and his brother has anxiety – with just CBD. For them, THC induces paranoia.

Dr. Leeta Jussila, a practitioner of Oriental medicine who specializes in cannabis, says that everyone’s system is different, so the way people absorb CBD differs. She recommends new users consult with health care providers and closely track how small doses of the chemical effect them.

“They could get a headache. Sometimes people say, ‘I feel funny,’ but you’ll never overdose on cannabis. You’ll just start to detox,” she said. “CBD is an oil, fat, lipid. Some people might get diarrhea. I’ve had one person get nausea, dry mouth or dizziness. But it depends on the quality of the product.”

Excited to introduce others to CBD, Eppers watched market trends, talked to hemp farmers and decided to launch a brand-new company featuring his favorite chemical, drink brand Vybes.

The California-based hemp CBD beverage went on the market this January. Eppers projects Vybes will produce 1-1.5 million bottles this year and already has hundreds of retailers selling drinks across the country.

 

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