The 2018 Farm Bill provides a regulatory framework for hemp farmers, allowing them to legally grow, transport, and insure their hemp crops.   However, the Farm Bill does not extend beyond farming to the manufacture and sale of products made from the cannabidiol (CBD) extract.  The federal regulation of the manufacture and sale of all CBD products falls within the jurisdiction of the FDA.  

Unfortunately, there are still no federal regulations or standards governing the safety, consistency, traceability and integrity of CBD and CBD products.  As a result, the average consumer has little to no guidance beyond what is stated on the packaging itself.  In the absence of federal regulations, the consumer is left with many questions; is the company a reputable organization? do they practice good manufacturing processes? What is in the product itself and what does it mean?

As the industry is largely self-regulated, a consumer may be able to glean information regarding the worthiness of a company by viewing commentary on the organization, its personnel and its reputation.  However, disqualifying company issues may or may not be easy to find. Even assuming no disqualifying company issues, judging the quality of a CBD product is also difficult to assess.  

There are many steps involved in the manufacturing of CBD and each step impacts the quality of the final product.  Most organizations are not vertically-integrated, which means that there is more than one organization involved in the product’s supply chain from seed to manufacture.  Determining a company’s supply chain is an enormous challenge.  In general, there is poor disclosure concerning the source of the hemp that goes into CBD products.   

After sourcing raw hemp, the next step is to extract the CBD oil from the hemp by a process called extraction.  There is no standardization in the CBD industry governing the extraction process.  Extraction can be done using different methods; i.e. , CO2, ethanol, hydrocarbon, butane – and is performed on equipment that is virtually experimental in nature.  Various refinement processes to the CBD can take place after the original extraction. 

It is virtually impossible for a consumer to find out how CBD was extracted or how the extraction process impacted the product.  In response to this lack of transparency, certain CBD companies will have their products tested by third party lab(s) during the growing and/or manufacturing period.  A Certificate of Analysis (COA) is generated to confirm that specifications are met regarding potency and contaminants. Most companies will either include a QR Code on their product that reveals the COA or they have the appropriate COA information on their website for consumers to see.   However, judging the value of the certification arguably requires a level of due diligence that the average consumer would be unable to reach. 

Unbiased product and manufacturer reviews by consumers themselves should only become more valuable as the market population increases.  There are a number of websites that offer reviews of CBD products. The easiest way is to search for a product or company in a search engine and add the word “review” to your search.  It is always important to note that everyone is certainly different and this certainly extends to a particular experience with any product.. 

At the most recent hearings conducted by the FDA in May 2019, they made it clear that additional testing and research will be performed in connection with CBD products and that regulation is on the way. In the meantime, perhaps independent third-party companies can create software or a framework for consumer transparency.  A standard “stamp of approval” for quality would go a long way in establishing trust with consumers interested in purchasing CBD products.  

We have identified 20 ways to assist companies in branding themselves as committed to quality control.  In the CBD space, we have identified 13 items that directly address this identification.  By investing in quality control measures, businesses can generate significant distinction in the CBD marketplace, leading directly to recognition and acceptance of their brand and product sales.

We hope this information was helpful.  Thank you for your consideration and there is certainly more to come as these issues evolve.