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State hemp and CBD is still not easy to navigate

As FDA continues to contemplate potential regulatory pathways for hemp-derived CBD, an increasing number of states are moving forward with their own laws and policies aimed at regulating this popular product category, especially in the dietary supplement and food space.

Several states are imposing robust testing, labeling and registration requirements for these products—with more likely to follow—or restricting the sale of hemp and CBD-containing food and dietary supplements altogether, citing concerns about the absence of federal oversight.

Unfortunately for companies operating in this space, not all these state mandates are similar. Coupled with THC testing issues, many companies are faced with logistical challenges and supply chain headaches when it comes to navigating the various state regulations (and risks) for CBD and hemp products.

In addition to legalizing hemp and its derivatives, such as CBD, the legislation also directs USDA to create a regulatory framework for approving state-developed hemp plans as well as a federal plan for states that choose not to have primary oversight for the regulation of hemp.

Many states are currently in the process of developing hemp plans, which are primarily focused on the cultivation of hemp and related issues such as licensing hemp growers and THC testing. At the same time, they are also taking the opportunity to place restrictions or limits on the manufacture and distribution of finished products.

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CBD in packaged food and beverages

CBD in packaged food and beverages

Alcoholic drinks are by far the most embedded industry in the cannabis sector. At least three leading corporate players have a stake in cannabis producers, the most notable being U.S.-based Constellation Brands and its 38 percent share in leading Canadian cannabis producer Canopy Growth. With the spirits and beer categories already headed in a low- or non-alcoholic direction, a future where tetrahydrocannabinol (THC) replaces alcohol is on the horizon. Cannabis beverages, with specific THC dosing and controlled onset-of-effects, will become more common in places that have legalized recreational use, ultimately providing the equivalent effect of a glass of wine or beer. These would be calorie-free, non-alcoholic or alcoholic recreational beverages with an intoxicating buzz.

Health and wellness trends are driving the global soft drinks industry, fueled by sugar reduction. The functional health and wellness trend is thus a natural bedfellow for cannabidiol (CBD)-infused products. In soft drinks, CBD launches have become prevalent over the last two to three years, particularly in bottled water, juices, ready-to-drink (RTD) tea, RTD coffee and energy drinks, as well as THC inclusions where recreational use of cannabis is legal.

Tea is currently the most popular application for CBD products in hot drinks, particularly green tea and herbal tea, related as they are to health and wellness. As low- and non-alcoholic beverages grow in popularity, and sugary soft drinks continue to decline, a consumer trend confluence occurs between alcoholic drinks and soft drinks. These blurring lines are creating a fertile ground for adult recreational soft drinks, where cannabis (more specifically THC in the long term) fits in as a social lubricant with a health and wellness halo.

Within packaged food, Euromonitor International expects sales of CBD products to double over the next two years, as consumer awareness grows. CBD and THC are the superpower holistic food ingredients of the future—think turmeric (anti-inflammatory) crossed with coconut oil (essential fatty acids). CBD/THC falls within the naturally functional and mindful consumption trends, tapping into the vegan, plant-based and free-from movements. Given hemp is grown sustainably, it is also spurred by the ethical living megatrend and back-to-basics move. THC-combined CBD products are chiefly prevalent in sweet categories, such as confectionery (chocolate and sugar), protein bars and ice cream, with potential for savory snacks, pasta and soups, among others.

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