Joe: On this episode of the "CBD University Podcast," we go behind the headlines of the industry with Hemp Industry Daily to learn about their newest CBD retail channels plus where's the industry heading in the final quarter of 2020 and into 2021. Will we see more companies coming and going, and what's on tap for regulations in an unregulated industry? This is the "CBD University Podcast," and it starts right now. I'm Joe Agostinelli, the host of the "CBD University Podcast." If you are a returning listener, thank you once again for tuning in. If you are a new listener, we are glad you found us on your podcast platform of choice. A reminder, we are also on the YouTube channel for Global Widget and the YouTube channels of our brands' full video episodes. You'll notice that this episode, again, looks a lot...becoming a familiar sight with these remote podcast episodes via Zoom. And on this episode, I welcome the editor of Hemp Industry Daily, Kristen Nichols. Hi, Kristen.
Kristen: Hi. Thanks for having me.
Joe: No problem. I get the emails every day and then I know when my phone...I was just telling somebody the other day, I know when my phone goes off at 6:02 Eastern time every night, I was like, those are the headlines from Hemp Industry Daily. So, just a little bit of plug, to follow all the latest in industry headlines on the retail side, do visit their website, and do subscribe to the daily newsletter. How's everything going?
Kristen: Great. Yeah, that was good. And it's all free for now. You know, everybody is trying to make it, but yeah, we try to get...but we're always desperate for your story ideas because I always say you guys see stories way before we do. So, we love the feedback.
Joe: Awesome. Great. And I'll tell you what, never...the stories that happen in the CBD industry seems to be changing on an almost daily basis and obviously, you guys know all about that. So, first of all, before we get into the industry as a whole, let's hear a little bit about your past and what got you into this industry and over at Hemp Industry Daily?
Kristen: Okay. Well, I always say, and this will be [inaudible 00:02:09] whatever you think of cannabis, it truly is the miracle drug of news. I for a long time covered state legislatures and agriculture in a bunch of different states. So, when the state lawmakers were working, I covered the leg. Then when they finished, I covered farms. In '08, I moved to Colorado which doesn't grow a lot. So, it's kind of a ranching and mining state. So, anyway, that's around the time this industry started, and boy, if you like politics and agriculture, there's no better intersection than, of course, cannabis-wise. So, I started writing more and more about marijuana and hemp, then kind of got so sick of politics, couldn't do one more campaign. So, came to do hemp full-time. In 2017, the parent company, "Marijuana Business Daily" kind of, the thinking was, you know, there are just different audiences, they have different needs. And there are some people that are just not gonna participate in some...or go to shows or advertise or really participate if marijuana is in the name. There's nothing wrong with marijuana, of course, but they do have different needs in different sectors. So, we kind of started this up to really speak to folks doing basically low THC cannabis.
Joe: Perfect. So, recently, you launched your new CBD retail channels. Tell us a little bit about these and where listeners can go to see all that?
Kristen: All right. So, it's a CBD and hemp retailer. It's a landing site. You can go through it, find it on hempindustrydaily.com, newsletters, all that. I think it's an interesting advance of the industry. And here's what I mean, when kind of this whole caboodle started, we're talking like medical marijuana days, early days of regulation, there was this...a lot of states did what Colorado did, which it said, you have to be seed to sale. You have to grow the stuff you're selling. You have to own this plant. You have to extract it yourself. You have to be in charge all the way until it's out the door. Well, as this industry matures, it's getting less and less where you have to...no one's good at everything. If you're a great farmer, you're not a good marketer or...you know, no one's good at every part of the supply chain. So, the reason, we did this spinoff is let's say you're a farmer or you're a producer, cultivator really into plants, you probably don't care about, you know, 10 new ways to extract this thing. Or if you're a retailer and you're selling cannabis, you might not care about what the USDA has to say about sampling and new varieties of seeds on the market. You probably just don't care. So, what it is is kind of as the industry matures, I think we are going to see more and more publications aimed at producers or retailers or extractors and not the entire kind of...or everything for everybody.
Joe: And it's certainly been an interesting year in hemp and CBD. And, you know, even before the pandemic, we knew this would be quite the year. What are some of the latest headlines that may continue into the near future that you're seeing?
Kristen: Oh, miracle drug of news. There's so much news. There's so much pending. Okay. Again, if you're a farmer, you're really watching the USDA, there's a lot of questions about whether... By the way when hemp was legalized in 2018, it said that you could stay under pilot programs or grow the way you've been growing basically till the fall of 2020. So, they set that up a long time ago. That's supposed to take effect here November 1st. Well, it's clearly because of the pandemic and because it's a brand new crop and it's very complicated to regulate, I mean, it's very complicated, it's taking longer than folks thought it would. I would say there's a lot of naivety about folks who thought it could be done in a year. Anyway, so if you're a farmer, you're watching that, there's going to be big questions about what that's going to be...what does my '21 growing season look like? Do I have to follow USDA rules? Can I stay under my state program, or maybe I go back to the illicit market because it's all too much work. So, that's kind of a big pending if you're a grower. If you're making stuff or selling stuff, a lot of folks are really watching the FDA. They regulate what you kind of put in your body, what you eat and put on your skin, and what you consume. They are expecting...so they have suggested some CBD rules to the White House. When the federal agency comes up with how they think something should be regulated, they then have to send it to the White House for a final yes or no.
Well, the FDA has sent their stuff to the White House, but that has not come out yet. There's no deadline for that to come out. And almost everyone thinks this is gonna be, you know, after the election, probably into the next president, before we get some action and clarity on whether you could put CBD into common supplements, which we know are sold all the time, but technically, are illegal. So, a lot to watch for those kinds of things. And, of course, as you point out, everybody's waiting for this pandemic to end, for consumer confidence to return, and where CBD fits in kind of the people's pocketbooks, how important is it to you as the economy recovers? You know, no one really knows where CBD is going to land after all this ends.
Joe: So, heading into the final quarter of 2020, what are some of the trends and happenings that you're seeing aside from the regulatory side of things, what are you guys seeing in products or maybe companies coming and going?
Kristen: Sure. Well, when we started this pandemic, we had about 3000 CBD producers. We're down to less than half. I mean, that's crazy, right? It's less than half of that, and I think the bloodletting is going to continue. Now, not all of that is bad news. It could be larger and larger operators buying, gobbling up smaller competitors, which is good news for the people cashing out. And here's what I mean by big guys, just within the last few days, Nestle, the largest food and beverage company in the world has entered the CBD market through a subsidiary in Europe. They're making soft gels. Also this week, Unilever, that's a big, big, big consumer brand, they have brands like Ben & Jerry's, they have Dove and Suave, they have gone into an agreement. Now, they're not gonna make or sell CBD themselves, but they are doing some distribution with a company that does, really setting up... Anyway, we're just seeing almost every day, bigger and bigger and bigger players, Molson Coors, Ocean Spray, kind of common household names that you know are at least tiptoeing into CBD. I think they're going to buy smaller competitors. So, that's where I see the big trend for Q4 and going into '21 is everybody's waiting for that phone call for huge global corp to offer you a few million dollars for your operation. So, you might not go out of business, you might cash out and now you're still in business, but now, you work for a very, very big company instead of the company you made up in your basement.
Joe: And a side note to that and tying into what we've just talked about prior with the USDA and the FDA, can we also see evolving government regulations have an impact on some of those companies too if they don't have those big buyers?
Kristen: No doubt. So, the more regulated an industry is the more complicated and expensive it can be to comply with the rules. So, I don't want to say it was...I think it's great that hemp has been legalized, but certainly, for an independent operator, it can be a lot easier to operate with not a lot of rules from the feds. And I remember, we talked earlier about how I covered agriculture for a long time, I remember in the marijuana space and in the cannabis space people saying, oh, they were really excited for the USDA to regulate instead of the DEA. And I wanted to say, "I've never heard a farmer have great things to say about life at the USDA." So, I'm curious, kind of, yeah, it's going to be more expensive to comply. We're going to see bigger operators because you have to have...like, if you follow like ISO Standards and good manufacturing practice and all of these kinds of hoops and hollers that you have to do if you're making, say, Motrin or a common painkiller, you're going to have to do here. That's not the kind of thing that small operators do.
Joe: And is that something you see as separating the companies too is those long established companies who have been in this, you know, really new industry for at least the past few years can adapt to those regulatory and be ready on the leading edge of those regulatory and governmental guidelines that may come out and help them even establish their name more in this industry?
Kristen: Sure. I think it's decision time for companies. What I mean by that, we talked earlier about how maybe you want to farm, but you don't want to retail. And I think companies and brands as well are going to have to decide, do we want to be pharmaceutical lane? That's a very different lane. Do we want to be sold in drug stores? Do we want to be kind of a beauty, natural product kind of company and spas and gyms? What is my sweet spot here? I think right now we've got some brands that you see everywhere, you'll see in the CVS or the Walgreens, you also can see like at a farmers' market. You can see the same brand, I mean, kind of sold always to all people. I think we'll see less of that and more specializing into here's my lane. My lane is haircare. My lane is skincare. My lane is health and wellness. So, that's where I think it heads.
Joe: And I think as you mentioned, all of us in the industry are waiting on that guidance from the FDA, and obviously with an election coming up and everything going on towards the end of this year, it kind of looks like that may shift maybe towards sometime in early 2021. What should folks be on the lookout regarding guidance from the FDA?
Kristen: I am the voice of negativity here. You will hear from industry people that want your investment, you will hear from lawyers, "Oh, anytime now, next quarter." Oh my goodness, I do not think so. I'm not an attorney and I've never worked for the FDA, but here's a couple of points to remember. Number one, it took them almost 20 years to...no, almost 30 years to regulate vitamin C. I'm not making this up. People started selling like vitamin C and vitamins in the '60s. Flintstone Kids if you know the Flintstone Kids, that hit the market in the late '60s.
Joe: I remember the Flintstone Kids when I was younger.
Kristen: Yes. When, if you know what the [inaudible 00:13:39] is, when the FDA regulated how that stuff is supposed to be produced, Flintstones Kids, 1994. So, stuff had been on the market since the '60s. I think very similar, broadly advertised, this is going to appear. You have all kinds of stuff. The FDA was like, whoa, whoa, whoa. But they are a slow-moving agency. So, I'm not saying there's a lot of pressure on them, of course, to act on CBD. And you hear from Congress and definitely from members of Congress who come from large hemp-producing states, "Get on this." "Hurry up, hurry up, hurry up." I think the FDA is going to go slow. I think it's going to be way less than folks want them to do. They're not going to give a clear lane for here's how you do it. But here's why I think that's good news, because the fact that there is this slowness on the FDA's part and that they haven't given a clear signal, this is all, lots of people think, "Oh, if the FDA would just clear it, I would be a kajillionaire, and not again, these bigger outfits, Coca Cola, Pepsi, Walmart, Target. Now, it will be me." Well, I think as long as we're in this period of uncertainty where it's illegal but unenforced, I think that is the sweet spot for small entrepreneurs. And I think there's a lot of opportunity here, because when the FDA settles all this, you know, no one...sorry, not no one, but very few people make hobby pain relief medicine in the basement and make that into a business. That is the total province of large operators.
So, the opportunity I think stays with us. I think it's a good thing, but I really don't expect any significant change from the FDA even through '21. Last thing I'll say, there is the chairman of the House Ag Committee, Collin Peterson, pretty important. You're pretty important when you are a chairman of a committee. He brought a bill that said CBD does not violate the Food, Drug, and Cosmetics Act. This gives people a clear... He is the chairman of that committee. That bill has not even gotten a hearing in his own committee. And that bill's been floating out for a while. We're about to change Congress, there's political uncertainty, people in Washington are, and I think most people agree, should be focused on other priorities, the pandemic, the economy, I don't think there's going to be movement on CBD anywhere in the short-term.
Joe: Well, certainly, we'll keep our eye out for that. And we'll wrap things up with talking a little bit more about Hemp Industry Daily, and what's coming up towards the end of this year and beyond now. You know, Hemp Industry Daily always has a lot of events. Obviously, this year has been quite different. Everything's gone virtual. So, what's coming up on that front, and how have you guys been able to make the move to the in-person to the virtual events?
Kristen: Big question everybody wants to know is are we going to have MJBizCon. And here we are weeks out, we still honestly don't know. So, here's what we're doing, planning kind of a virtual element along with in-person if the in-person is possible. Really it's all up to Las Vegas. They're not allowing big shows yet. There's a big show right before us in the same venue and a big show right after us that have already been canceled. So, I again, I think we're planning that if we can do it live, we're doing it live. I don't know if that's going to be possible. The challenge of virtual events as all of you guys know is that it's hard to keep...we all have Zoomitis. We're all sick of staring at the screen, people... It's hard to stay engaged. And it's also...we just don't make the kind of connections you'd make. So, I really think we're all kind of treading water, but that's okay because the whole country is treading water till this ends. So, we're trying to do more reports, do more kinds of content that you can engage with, maybe not... And boy, I need your ideas for how to recreate that networking, where you want to meet other people. And that's really just hard to replicate online. We can set up chatrooms and people do meet in social media, but boy, that's just hard to recreate. So, we're trying our best. We're really hoping for a better '21, but I know everybody else is too.
Joe: And once again, for all the latest industry headlines and to stay on top of all the upcoming events, do visit their website, www.hempindustrydaily.com. Sign up for their daily emails and you can keep in touch with everything going on in the industry, in the retail space. Well, Kristen Nichols is the editor of Hemp Industry Daily. I thank you for joining me for your first podcast episode with us. We'll have to do this again. A lot of great information out there for our listeners and our viewers.
Kristen: Yes. Thank you so much for having me. I appreciate your time.
Joe: And a reminder that if you have not yet done so, you can subscribe to our podcast on your favorite podcast platform of choice or on the Global Widget YouTube channel or the YouTube channel of our brands. You'll get notifications when new podcast episodes are uploaded each week. I'm Joe Agostinelli, the host of the "CBD University Podcast." Thanks for tuning in.
These statements have not been evaluated by the Food and Drug Administration. The CBD products are not intended to treat, cure, or prevent any disease or condition. Always consult your personal physician about CBD and using CBD products. CBD should never be used by anyone under the age of 18. This content is not intended to provide legal advice regarding the legal status of CBD and CBD products.