CBD, aka cannabidiol, is a substance derived from the cannabis sativa plant that’s credited with all sorts of major health benefits, in addition to alleviating stress. Though it’s legal in over 40 states and Puerto Rico, and available in everything from capsules to tinctures to oil you’re supposed to put on your salad, the supplement everyone’s talking about is still mired in mystery.
“Only in the recent years have people started to see the medicinal benefits of the cannabinoid CBD,” Kimberly Dillon, VP of Marketing of cannabis company Papa & Barkley, tells Bustle. “Research has shown that CBD acts as an anti-inflammatory, anticonvulsant, antioxidant, antiemetic, anxiolytic [aka, anti-anxiety], and antipsychotic agent,” says Krista Whitley, CEO of Altitude Products. Limited research has suggested that it can relieve migraines, insomnia, and potentially PMS symptoms
And how does it work for all those things, exactly? “Simply put, CBD works with your endocannabinoid system” — aka, the system of neurotransmitters in your brain that’s responsible for things like pain sensation, mood, and more — “to make things happen,” says Whitley. The science-y version is that it “binds and activates receptors in the brain called ‘cannabinoid receptors 2’ (CB2) and selectively blocks other receptors in the brain – the CB1 receptors,” Dr. Richard Kaufman, Chief Science Officer of NanoSphere Health Sciences and Evolve Formulas, tells Bustle. “The underlying function of these CB2 receptors is protecting your body against inflammation and tissue injury, which is why it is so beneficial for CBD to activate them.”
CBD’s effects are subtle, but effective. Because there’s little to no THC, the psychoactive compound in cannabis, present in plants that are cultivated for CBD, you’re not going to feel high from a dose, but, as with other adaptogens, you may experience the sensation that you body is adapting to stress (which, BTW, is all “adaptogen” means). “Anything that affects my state of stress or anxiety, that does produce a physiological boost,” says DiPrima.
How will botanical CBD be regulated when cannabidiol is approved as a pharmaceutical?
Confusion about CBD’s legality has been fostered by both cannabis detractors and promoters. Mixed messages from industrial hemp entrepreneurs have muddied the waters regarding the legitimacy of foreign versus domestic sources of CBD oil. Some maintain that CBD oil is legal if it’s extracted from the stalk and seeds of industrial hemp grown abroad — in much the same way that fiber hemp products and nutritional hempseed protein powder are legal to import and obtain in the United States. Today one can purchase hemp-infused soap and hemp protein supplements at grocery stores nationwide thanks to the Hemp Industries Association’s successful litigation against the Drug Enforcement Administration (DEA), which culminated in a 2004 Ninth Circuit of Appeals ruling that rejected the DEA’s attempt to ban hemp food commerce.But the legal status of cannabidiol was not affected by this court decision. (CBD was never actually mentioned in the judge’s ruling.) Because it resides within the resin of the cannabis plant, CBD remained an illegal Schedule I substance along with THC, which is also found in the resin. While the Controlled Substances Act exempts cannabis stalk and seed from the official definition of marijuana, the resin, wherever it is found on the plant, is explicitly proscribed, even the minuscule amount of CBD-containing resin on the stalk. That’s been the law ever since the passage of the 1937 Marijuana Tax Act.
Compared to high-resin marijuana, industrial hemp is a low-resin plant, and there’s hardly any resin (and therefore hardly any CBD or THC) present on the stalk and none at all on the seeds. Thus, neither hemp stalk nor hempseed are viable sources of CBD oil. It’s obvious that the CBD oil has to be extracted from the resin bearing parts of the plant – the flower tops and to a lesser extent the leaves – which weakens the contention that imported hemp oil extracts are legal.Industrial hemp advocates who favor domestic sources of CBD oil are on firmer ground because of the 2014 Farm Bill, which defined hemp, as distinct from marijuana, as any cannabis plant with a THC level of less than 0.3%. In effect, the Farm Bill was designed to perpetuate marijuana prohibition while carving out an exception for U.S. farmers to grow industrial hemp for CBD oil extraction and other purposes.
The vast therapeutic and economic benefits of CBD-rich products have catalyzed a rebirth of industrial hemp farming in the United States. The Farm Bill requires farmers in states that legalize hemp to cultivate their crop as part of a state-sponsored or university-affiliated pilot research program. But the scope of the Farm Bill is interpreted differently by different regulatory agencies. Hemp is an agricultural commodity, not a drug, and the DEA insists that the Farm Bill does not authorize commercial production of CBD oil.
But it’s happening anyway. And consumer demand for CBDis growing, despite the DEA’s suborn refusal to acknowledge that CBD-rich cannabis – or any kind of cannabis – can confer medical benefits.
In December 2016, the DEA issued a new tracking code specifically for cannabis oil extracts, including hemp-derived CBD oil concentrates and isolates. This administrative tweak rebutted the claims of online CBD vendors and their suppliers that cannabidiol is legal in all 50 states. The DEA’s latest missive didn’t make CBD illegal — it was already federally illegal under the Controlled Substances Act because CBD comes from the resin of the plant. Hemp stalk and seed might be legal, but the resin, where CBD resides, is not legal, according to the DEA.
Once CBD becomes an approved pharmaceutical, it will be a matter of enforcement discretion on the part of the FDA as to whether storefronts and online retailers will still be allowed to peddle a plethora of hemp-derived CBD oil products. The FDA has already documented instances of fraud and product mislabeling when it analyzed the content of several CBD hemp oil items. The bad apples – hemp oil extracts with no cannabidiol or excess THC – could be a pretext for the FDA to restrict non-pharmaceutical CBD products.
But there are significant countervailing forces that favor industrial hemp as an abiding source of CBD oil irrespective of the FDA’s pro-Pharma bias. The fledgling domestic hemp industry has the backing of some very powerful DC politicians (Senate Majority Leader Mitch McConnell from Kentucky, for example), who see economic opportunity for hardscrabble farmers in hemp-growing states. The fledgling U.S. hemp industry is buoyed by a groundswell of public support for medical cannabis in general and CBD in particular. Investors are drooling over the prospect of a billion dollar CBD market in the near future – if Uncle Sam doesn’t get in the way.
In March 2017, bipartisan members of the recently formed Congressional Cannabis Caucus filed a package of bills aimed at creating “a path to marijuana reform,” which includes legislation to remove cannabis from Schedule I, a category reserved for dangerous drugs with no medical value, and to de-schedule CBDentirely. Various measures, if enacted, would lift restrictions on cannabis research, end the federal ban on hemp farming, and limit federal interference in states where marijuana is legal for therapeutic and/or adult use, while also addressing issues that are germane to the cannabis industry: banking access, taxes, asset forfeiture, and amnesty for cannabis convicts.Thus far, forty-four states have legalized some form of cannabis, including eight states (and the District of Columbia) that allow adult use. Twenty-nine states have legalized medical marijuana and 15 other states have legalized CBD (but not the whole plant) for therapeutic purposes. Some states, lacking a homegrown supply of CBD oil products, only provide a safe haven for residents who manage to acquire cannabidiol from international or domestic sources.
The Hemp Business Journal estimated that the CBD market will grow to a $2.1 billion market in consumer sales by 2020 with $450 million of those sales coming from hemp-based sources. That’s a 700% increase from 2016. In 2015, the market for consumer sales of hemp-derived CBD products was $90 million, plus another $112 million in marijuana-derived CBD products which were sold through dispensaries – bringing a total CBD market to $202 million last year.
Matt Karnes of Greenwave Advisors is even more optimistic about the growth of the CBD market saying, “In terms of the CBD market size, I estimate an almost $3 billion market by 2021. Right now there are 15 states that allow CBD only — this is in addition to the 28 states plus DC that have legalized medical marijuana.”
There is also evidence that traditional marijuana users are willing to give CBD a try. Outco, the largest licensed cultivator in Southern California learned that 38% of users and non-users said they wanted to learn more about CBD oil. They too believe that the market is poised for growth.
Not only is the market projected to grow by leaps and bounds, but it has already been targeted by industry insiders. According to Headset Research data, in Washington state alone there are over 800 CBD products in the marketplace. This makes it difficult for consumers to know what is what when they are trying to buy CBD products. In addition, CBD products, although suggested to improve a variety of health problems, can’t actually make those claims. So most labels on these products are intentionally light on details and this can make it pretty difficult for a shopper to know what to buy.The government’s approach towards CBD is equally confusing. The Federal government is unclear as to oversight of these products. CBD isn’t specifically defined under the Controlled Substances Act, however the Drug Enforcement Agency (DEA) believes it is a Schedule 1 controlled substance and took The Hemp Association to court over that designation, but they lost in 2003. The Industrial Hemp Farming Act of 2015 would amend the Controlled Substance Act or CSA to exclude hemp and thus hemp-based CBD. Still some hemp-based CBD products are sold in every state believing they aren’t subject to the law.
Medical Marijuana Inc. said that there were $65 million in hemp-based CBD sales in 2015 and that they are the current market leader with over $800,000 in retail CBD sales per month. Their CBD sales have grown from $3.4 million in 2013 and are expected to be $9 million in 2016The market has already changed dramatically in the short time that Medical Marijuana started selling their products in 2013. Four years ago, customers were paying $1.25 for a mg., but buying less. Now the prices have plunged to 2.5-4 cents per mg. and the volumes have increased. They were basically the only game in town in 2014 when their sales were $14.5 million. However, increased competition and the drop in prices has halved their sales figures even though their customer count has increased.
Though CBD oil has been acknowledged for its medical benefits, traditional banks and credit card processing services have denied businesses merchant accounts because of conflicting international, federal, and state laws.
Due to the Agricultural Act of 2014, 14 states, including Kentucky, Colorado, Oregon, Tennessee, and California, can legally grow and process industrial hemp and hemp seeds. The law allowed states to pass laws allowing industrial hemp, as long as, their states’ agriculture departments oversaw the pilot programs. However, there are still some major problems with the law. It didn’t clearly specify w ho could sell products and derivatives of hemp. Though the law is vague, many government officials believe its intent is to permit hemp research to see if the plant can be a viable cash crop for struggling farmers.
Unfortunately, federal laws only make it all the more complicated. Since 2016, marijuana has been classified as an illegal Schedule One drug in the United States putting it in the same class as dangerous drugs, such as cocaine, heroin, and methamphetamines. This means anything that comes from the cannabis plant, including some forms of CBD, are illegal.CBD oil does have healing properties. Many, many people medicate with cannabis and specifically with CBD. But “marijuana” has remained a Schedule I controlled substance for the past half-century. This status has created incredibly high research barriers and scattered findings. Not to pile on, but even if federal research rules were relaxed, it would be difficult to market your CBD oil in the way that you want. The FDA will always regulate claims for non-food substances as if they were pharmaceutical drugs, and pharmaceutical drugs are not broadly approved in the way they once were. For example, most researchers believe that older, general utility drugs like aspirin would never be approved if put to trial today. We all take aspirin and know it’s good for “this and that,” but getting approval to say something as vague as that is almost impossible these days for new products. That includes CBD oil, unfortunately.
Some smoke shops could be using CBD oil as a disguise to illegally sell THC oil, said Wesley Nunn, the president of the Georgia Narcotics Officers Association and commander of the Ocmulgee Drug Task Force around Baldwin County. Both oils look the same to the naked eye.
“You don’t know what’s in it. That’s the problem,” Nunn said. “If it’s helping with seizures, appetite disorders and PTSD, let’s get it regulated. There’s so much money being pushed behind the marijuana trade and people are trying to get on board.”
CBD and THC oils would have to be tested to determine their contents, GBI spokeswoman Nelly Miles said. But most drug enforcement is focused on the opioid problem and the state crime lab has a severe months-long backlog.
The U.S. Drug Enforcement Administration issued a directive in May stating that prohibitions on marijuana extracts don’t apply to products such as sterilized seeds and oils that are made from the cannabis plant. CBD oil has less than 0.3 percent THC; Georgia’s medical marijuana law allows up to 5 percent THC.
There are many benefits of running an online business that are not exclusive to selling CBD. In comparison to a retail storefront, an online store saves money in set-up and operational costs. After an initial start-up fee, you have access to a broad audience. Customers who may not have found your retail business have access to your store and you can target your preferred audience (more on that later).
By becoming an online CBD oil distributor, you can cater to those who prefer to purchase CBD oil from the comfort of their own home. If CBD oil is not accepted near your place of residence or if you do not think CBD oil will sell well in your area, you still have access to other customers nationwide who are seeking CBD products.Selling CBD online can be challenging but it is highly rewarding. Equipped with the right knowledge, you can start and market your online store with success. The future of the CBD market is exciting and now is an ideal time to get started in the industry.
When it comes to CBD and Hemp Oil based businesses finding a payment processor can be difficult due to its high risk nature and the fact that many payment processors don’t want to process payments for it – mainly due to reputational reasons. Also many accounts available for CBD are for non consumed products such as creams and lotions, while our account allows for products which are to be ingested. Since the laws and the market for these products are new and ever-evolving, obtaining and maintaining a CBD oil merchant account will be difficult but not impossible.
Because we understand the importance of not wondering each day if your existing processor is going to close your account or turn to an aggregator to help, we provide direct merchant accounts (one owned by you in your name) for CBD and Hemp Oil using specialised European acquirers. You also do not have to be incorporated in the US like other merchant account providers.
IMPORTANT – Please note that we only set-up processing for businesses who follow applicable laws and compliance guidelines. Therefore in order to provide a CBD dedicated account you must adhere to the following:
– Website (and preferably packaging) not to contain any cannabis leaf imagery
– Products do not contain tobacco and nicotine
– THC for all products is 0.3% or under
– You are not selling cannabis seeds or MMJ
– You have an EU incorporation (you do not need to be physically located there)
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