Industry: Hemp growers need FDA rules

Participants in the NoCo Hemp Expo in March nearly spoke in one voice about the state of their industry: Colorado is positioned to be a leader in hemp production and innovation, they said, but advocates need to expand their focus beyond CBD products such as food, beverages and dietary supplements for long-term profitability — to recover from the pandemic and address a current glut of hemp on the market.

“The pandemic has had an impact. The number of registered hemp farms is down. Market dynamics from the evolving marketplace continue to impact the entire sector,” Gov. Jared Polis told the expo’s opening session on March 24 in Aurora. “To address this issue, we need to ensure that hemp farmers can utilize expanded markets for the products you produce. The best way to do that is to address the gap in processing that exists.”

Polis echoed other voices in the industry who said more effort is needed to promote the plant’s use in building materials, paper, plastics, clothing and animal feed. “These are things that have been on the drawing board for years, but are only now becoming economically viable,” he said.

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Morris Beegle, producer of the expo and president of WAFBA — We Are For Better Alternatives — said oversupply has helped partially deflate the CBD bubble.

“We had a huge glut of material in 2019,” Beegle said. “A kilogram of CBD that used to go for $10,000 cratered to $300. We also had the rise of synthesized hemp-derived cannabinoids.”

Even so, Steven Hoffman, founder and managing director of Boulder-based Compass Natural, which handles marketing and public relations for natural, organic and sustainable industries, is bullish on investment in CBD companies and products.

“Everybody was jumping on the big-margins CBD could bring, but I think like everything else it will find its margin,” he said. “I don’t think it’s done; I think it’s resetting.”

A major roadblock has been inaction by the federal Food and Drug Administration, Beegle and Hoffman said.

“The FDA has to do their job and regulate CBD and other non-intoxicating hemp cannabinoids,” Beegle said. “Their inaction disrupts our entire supply chain; it’s hurting farmers and our industry.”

That industry has been waiting for those clear rules and regulations about food and beverages infused with hemp-derived CBD ever since hemp and its derivatives were declared federally legal under the 2018 Farm Bill. For decades before that, hemp was relegated to the same status as marijuana even though it had none of weed’s recreational-high effects.

But in the 2018 bill’s wake, two mammoth federal agencies — the FDA and the Department of Agriculture — have seemed to be at cross purposes.

“The USDA is doing its job, with things like more favorable crop-insurance policies,” said Hoffman, “but the FDA’s not supportive of CBD derived from hemp. It has reiterated that it will not consider it without more research. It could say that forever.”

Beegle said he initially was optimistic that an FDA under the Biden administration would be more supportive, “but not at this point. It’s been more of the same, through Obama, Trump and Biden — it’s just been lip service, and they have other priorities.”

Dani Billings, owner and product developer for Longmont-based Nature’s Roots as well as the Colorado Hemp Project, Felora Cat Litter and the Elements 6 Dynamic holding company, said she suspects there’s also pressure from large pharmaceutical companies on the federal agency.

“People who have been in big pharma want to get involved,” she said. “Big corporations will try to smash the small businesses that are doing this.”

“They won’t act until they get research that satisfies them or until Congress acts,” added Hoffman. “Hemp does enjoy bipartisan support because it supports farmers, but getting Congress to act to get FDA to act is a slog.”

That action is working its way through Congress. Introduced in December and sponsored by Reps. Kathleen Rice, D-New York, Morgan Griffith, R-Virginia, Angie Craig, D-Minnesota, and Dan Crenshaw, R-Texas, the CBD Product Safety and Standardization Act would help address the regulatory gap. The act would require the FDA to develop regulations for food and beverages containing hemp-derived CBD and allow for their interstate commerce, which currently is prohibited.

Meanwhile, Beegle, Hoffman and Billings agreed, the key for hemp-industry growth is developing the education and infrastructure to promote and produce other hemp products.

“There’s a lot more interest in building materials and animal feed so farmers can capitalize on carbon sequestration,” Beegle said. “There’s a lot more emphasis on building out the infrastructure that services the real ag side of the hemp industry.”

Billings said more emphasis will be put on using 100% of the harvested hemp, not just the oil that can be pressed from the flower. “That’s going to help our whole planet,” she said. “When you can utilize the whole crop, that’s the key.”

She’s seeing the potential already; her hemp-based Felora cat litter has been picked up for online sales by PetSmart and Chewy.

Another big piece is collaboration, Billings said. “People need to stop thinking they can do it 100% themselves. It’s about sharing information, helping each other out, rather than being in competition.”

Hoffman sees clothing and building materials as two of hemp’s growth sectors.

“We’re seeing investments in fiber, in woven- and non-woven materials, textiles, garments,” he said. “Probably one of the expo’s exhibitors that came the longest distance was a family from India that showed off amazing-quality fabrics from 100% hemp that felt like silk.”

And then there’s construction,” he said. “As the price for concrete and other building materials skyrockets, hemp can be a much more economical solution, not to mention a more fire-resistant solution.

“I live in southeast Boulder, and in three months I’ve had a go-bag ready for two different fires, the Marshall Fire and the NCAR Fire,” he said. “So with what we’re anticipating with climate change, that fire resistance will be ever more important.”

As the potential uses for hemp outgrow the CBD market, Polis said he expects the Centennial State to remain a leader in innovation.

“Colorado isn’t just participating in the progress of this industry, we’re defining it and writing the history,” the governor told the NoCo Hemp Expo. “… The story of the hemp industry in Colorado is really one of determination and grit. In many ways, it manifests the spirit of Coloradans themselves.”

Added Beegle, “I’m excited for the future. The future of hemp is going to happen.”

BizWest reporter Lucas High contributed to this report.