4 Due Diligence Tips for Stocking CBD Snacks and Candy

CHICAGO -- With new cannabidiol (CBD) products coming onto the scene daily, the need for retailers to carefully consider their merchandising and conduct proper due diligence is as crucial as ever. Retailers have been tasked with providing safe and legal CBD products since President Trump approved the 2018 Farm Bill—which allows industrial farming and state-regulated production of hemp—last December. This nationwide legalization of hemp allowed manufacturers to make new CBD products and gain traction in retail. Nonetheless, it increases the need for clarity and safety.

Here are four ways to conduct due diligence for CBD-infused snacks and candies …

Due diligence means getting your CBD snacks and candies from one distributor, said Anthony Perrine, owner of Lou Perrine’s Gas & Grocery, Kenosha, Wis. His CBD products come from Hempzilla, a distributor based in Woodland Park, N.J. Not having to track and research multiple suppliers simplifies sourcing the product, and it allows for a seamless movement from distribution to shelf, he said.

Limiting the number of suppliers doesn’t relieve a retailer of conducting due diligence. Perrine suggests fully researching a CBD supplier before shelving its products, including its manufacturing process, core consumers, other retailers it works with, where its products are made and the quantity of CBD in each one. From there, retailers can figure out placement and price points.

“It’s best to crawl before you walk with this,” Perrine said.

From a legal standpoint, retailers must ensure their CBD suppliers comply with U.S. Food and Drug Administration and Department of Public Health regulations. Retailers may be found liable for noncompliant products even if they didn’t manufacture or distribute them. Compliance is achieved through lab testing all inbound CBD products, said Matt Oscamou, co-founder of Weller, Boulder, Colo. Lab testing guarantees not only legal compliance but also that the products are safe for consumption.

“Some suppliers release products without the experience and aren’t in full legal compliance,” he said. “Retailers need to make sure the products are exactly what suppliers say they are.”

These precautionary steps are part of a list that retailers should provide their potential suppliers with before working together, said John Simmons, co-founder of Weller Snacks. Again, education is key, whether to the consumer or with the CBD product supplier. The more education there is, the easier this process becomes, he said.