2019 Year-End Report: Top 5 CBD Stories

CHICAGO — When the industry reflects on 2019 10 or 20 years from now, there’s a good chance cannabidiol (CBD) will sneak into the conversation. The ingredient, which became legal to produce federally via the 2018 Farm Bill, has become one of the most sought-after ingredients in retail products in recent memory. It has emerged in a variety of items, such as gummies, lotions and oils, and is expected to surpass $1 billion in total sales in 2019—a 133% increase compared to 2018, according to Hemp Industry Daily.

• Click here to download CSP's 2020 CBD Category Digest, created in partnership with Floyd's of Leadville.

Nevertheless, CBD remains a controversial topic. State-by-state regulations differ when it comes to selling and handling CBD, and many retailers are unaware of these legalities altogether. The lack of CBD guidance led to retailers taking one of two actions in 2019: staying on the sidelines or diving headfirst into the category.

Here are the top CBD-related stories of 2019 …

Richmond, Va.-based Altria Group branched into CBD products via an ownership stake in Cronos, a cannabis producer that the maker of Marlboro cigarettes bought into in 2018. Toronto-based Cronos purchased the CBD business of Studio City, Calif.-based Redwood Holding Group, which includes high-end CBD lotions, tinctures and body oils carrying the Lord Jones brand.

While Altria’s distribution network is largely value-focused retailers such as convenience stores, Bethany Gomez, managing director of Brightfield Group, a Chicago-based retail marketing firm, believes a potential lies in developing and selling low-cost CBD offers to that market.

Multiple convenience and drugstore retailers moved into CBD products in 2019. Among the more high-profile c-store chains, Kwik Trip, LaCrosse, Wis., and Sheetz, Altoona, Pa., stand out. Beyond c-stores, other significant retailers who started offering CBD products this year included CVS Pharmacy, Woonsocket, R.I.; Kroger, Cincinnati; and Walgreens, Deerfield, Ill.

Retailers anticipated regulatory moves from the U.S. Food and Drug Administration (FDA) by this fall, but at press time, the FDA had not made any firm decisions. The agency held public hearings on CBDs this past spring, soliciting comments ranging from informational to subjective. This led to the FDA creating a working group to spearhead CBD-related questions and concerns.

At a CSP-sponsored forum on cannabidiols, a speaker cautioned attendees who hoped the FDA would clear up confusion regarding CBD products, saying, “Be careful what you wish for.”

Jonathan Havens, an attorney with Saul Ewing Arnstein & Lehr LLP, Baltimore, warned that the FDA has a way of making things complex and will most likely take a lot of time in making those baseline decisions, leaving uncertainty and confusion in its wake.

CBD was one of the breakout stars of this year’s NACS Show in Atlanta. In a first for the show, NACS added a dedicated CBD pavilion to its exhibit hall lineup. The partitioned section, which required attendees to read and agree to a list of rules and to scan their badges upon entering, showcased a variety of hemp-derived CBD products from about 70 distributors.

Products included CBD-infused face masks by CBDfx; Hemp Bomb’s CBD-infused gummies; Reliva CBD’s tinctures and oils; Myle Vapor’s Kyle CBD vape pens; Forth CBD’s drink powders; Hemp Thrill’s energy shots; Natural Healer’s hemp oil herbal sprays; Social CBD’s pet drops; Veritas Farms’ CBD lip balms; and Zorbitz Primo’s CBD Therapeutic Putty, among others.

The CBD section aimed to help educate retailers about the different types of products in the market, as well as to help them feel ready once these products are approved for sale, said Leigh Walls, director of exhibit sales and services for NACS.

In November, the FDA issued warning letters to 15 companies for illegally selling CBD products in ways that violate the Federal Food, Drug and Cosmetic Act (FD&C Act). According to the warning letters, these companies marketed CBD products as remedies that treat diseases and for other therapeutic uses in humans and animals. Some have also marketed CBD products as dietary supplements and are adding CBD to human and animal foods, while others have marketed these products for infants and children.

Under the FD&C Act, CBD is an unapproved food additive and drug in all formats, aside from one prescription drug that treats epilepsy.

The companies that received warning letters:

• Koi CBD LLC, Norwalk, Calif.
• Pink Collections Inc., Beverly Hills, Calif.
• Noli Oil, Southlake, Texas
• Natural Native LLC, Norman, Okla.
• Whole Leaf Organics LLC, Sherman Oaks, Calif.
• Infinite Product Co. LLP, dba Infinite CBD, Lakewood, Colo.
• Apex Hemp Oil LLC, Redmond, Ore.
• Bella Rose Labs, New York
• Sunflora Inc., Tampa, Fla./Your CBD Store, Bradenton, Fla.
• Healthy Hemp Strategies LLC, dba Curapure, Concord, Calif.
• Private I Salon LLC, Charlotte, N.C.
• Organix Industries Inc., dba Plant Organix, San Bernardino, Calif.
• Red Pill Medical Inc., Phoenix
• Sabai Ventures Ltd., Los Angeles
• Daddy Burt LLC, dba Daddy Burt Hemp Co., Lexington, Ky.