Marijuana Business Factbook 2019

10 Marijuana Business Factbook 2019 Chapter 1 | National Trends © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. HEMP & CBD After decades of being treated like an illegal drug, industrial hemp was removed from the Controlled Substances Act (CSA) on Dec. 20, 2018. Seven little words at the end of the 2018 Farm Bill ― “The term ’marihuana’ does not include hemp” ― amount to the most significant change to American drug policy since the CSA was enacted in 1971. For the first time, Congress acknowledged that not all varieties of the plant cannabis sativa L. are intoxicating. Instead, the law now says that cannabis varieties with trace amounts of THC ― no more than 0.3% ― should be treated like any other crop. The change also applies to extracts from hemp, including CBD and other cannabinoids. Here’s what you need to know about implementation of the new law, which is likely to take months or years: • Hemp producers holding cultivation licenses in the 42 states with existing pilot programs won’t see an immediate change. Those state laws will remain in effect until the U.S. Department of Agriculture (USDA) has time to review the state regulations to decide which pass muster. • The USDA must develop national hemp regulations “as expeditiously as practicable,” an uncertain time frame. The national plan must include procedures for checking THC content and plans to destroy plants that test “hot” (above 0.3%). • The U.S. Food and Drug Administration (FDA) retains authority over food, drugs and cosmetics. That means that while CBD is legal, it doesn’t necessarily mean it is legal to add hemp or CBD to food products or dietary supplements. While the market potential for industrial hemp is still somewhat of an unknown, it’s clear that businesses are extremely bullish on the future of CBD. The FDA maintains that the only unambiguously legal use for CBD in the United States is in an approved prescription drug. But the agency has left that position largely unenforced ― aside from a few warning letters to CBD manufacturers ― leading to a confusing patchwork of the cannabinoid’s availability in dietary supplements and food. Several major retailers have already begun selling products containing CBD such as lotions and tinctures. The agency’s first public meeting on the cannabinoid was held at the end of May, though no specific decision was expected from that session. It’s still very early days for the CBD market, and it will likely experience significant changes as regulations develop and more consumers are introduced to the category. In 2019, we expect hemp-derived CBD sales to reach roughly $1 billion, growing to $6 billion-$$7.5 billion by 2023. VAPING CRISIS Recreational marijuana vape product sales are suffering in the wake of a nationwide, vaping- related health scare that caused several deaths and hundreds of illnesses. The shares of vape sales in California, Colorado, Nevada and Washington state’s recreational markets have declined significantly since the first vape-related death was reported in late August, according to Headset, a Seattle-based provider of data and analytics to the cannabis industry. Vape’s share of the market in Colorado stood at 19.2% the week of Aug. 18, falling to 15.6% by the end of 2019. That's equivalent to a 19% drop in market share. Put another way, approximately one out of every five dollars spent on vapes has shifted to other products such as flower and pre-rolls.