Joe: On this episode of "The CBD University Podcast," taking you behind the latest headlines in the CBD industry with the editor of "Hemp Industry Daily." The biggest stories in the industry. Are there clues to what could be happening with federal regulation? And what else are we keeping an eye on for tomorrow's headlines? This is "The CBD University Podcast," and it starts right now.
I'm Joe Agostinelli, host to "The CBD University Podcast." If you are a returning listener, welcome back to our podcast. And if you are a new listener, we are glad you found us on your podcast platform of choice. Don't forget, you can always catch full video episodes of "The CBD University Podcast" on the Global Widget YouTube channel and the YouTube channels of our brands. And it's always a pleasure to catch up with Kristen Nichols. She is the editor of "Hemp Industry Daily." And for those watching you on YouTube, this is another one of our Zoom episodes. And, Kristen, welcome back to the podcast. It feels like we just had you, but it's actually been a couple of months. And my, in this industry, two months seems like about 10 years when it comes to news.
Kristen: I know, right? Yeah. It's great. I can't believe how fast time is going.
Joe: Yeah. End of May, as of the publication of this episode, actually almost the middle of May by the time this episode is uploaded to the podcast stores, time is flying by. Along with time flying by, since you last joined us at the beginning of March, the USDA final rule on hemp went into effect March 22nd. We'll get more on the federal side in just a minute. But a lot of state legislation that we've seen from New York, and Idaho, and... What's the biggest headlines from state legislative bodies recently?
Kristen: I think the biggest is probably New York. New York legalized all cannabis, regardless of THC, that's recreational cannabis and hemp as well. And what they're going to do, and this is a first, so it's kind of cool. They're going to put all the producers under the same regulatory scheme. And a lot of places like California, or in Florida, here in Colorado. And as the hemp side, there's different...or maybe the health department or somebody else regulates the marijuana guys, and it's totally different, and they can't blend and blabidi blah. And then New York, they're gonna have one cannabis control agency that regulates everybody so that they can talk to each other. Hopefully, that's the goal.
Of course, the anxiety is, well, hemp folks do not wanna be taxed or regulated like marijuana folks, that's a common gripe you hear in places like California. So we'll see where this goes. They have not said what the taxes are gonna be yet, but I'm hearing right now almost, people say like 80%, 90% of the hemp producers in New York might just pivot to a higher THC or maybe do both. If there's no reason to choose one side or the other, maybe you could just...if you're doing flower anyway. So I'm really curious where New York goes and if it inspires other states to kind of seam together how they regulate these two industries which are working with the same plant and sometimes gets kinda silly, the differences.
Joe: And obviously, with recent legislation in Idaho it was, now all 50 states we talk about...
Kristen: Sure. So, that's kind of a symbolic note, Idaho is a very small state, not really clear how big of a player it will be in the industry, but it borders two biggies. It borders Washington State and Oregon. There's a lot of production and there's been, you know, getting product east kinda got to go through Idaho. So there's been a lot of, you know, relief that Idaho has finally legalized production now. They had this kinda workaround where you could transport it through. But there'd been problems, you know, getting communicated with locals. So I would say, Idaho, big symbolic. Now, all 50 States, you can legally grow hemp. The Farm Bill, of course, legalized hemp but left it up to the States if they wanted to keep banning it, and Idaho was the last one that did. So that's a symbolic big, now you can just say, it really is legal to grow this plant everywhere.
Joe: And anything we're keeping an eye on, or you're keeping an eye on at the state level? Are we waiting on anything, on any other States right now?
Kristen: Oh, this is crunch time, late spring, for all state legislatures. And now is when the rubber really hits the road, the big stuff is coming. Texas is looking at some big changes to their medical marijuana gene, which could totally change, of course, how CBD is regulated or how low-THC cannabis is regulated. And a bunch of states, a bunch of states are looking at new laws affecting something called Delta-8 THC. That is an isomer of the better known THC Delta-9, but it can be easily produced in a lab from excess CBD. No secret, there's a lot of people with gallons, and gallons, and gallons of CBD extract in Iceland they can't sell. And this kinda took a lot of states by surprise, that you could make an intoxicating product from hemp, right? A lot of the sales pitch for hemp was like, "Oh, you can't, you know." "You can drive a car and everything."
So we'll see where states go. It's kinda hard to track, there's bills pending in Alabama and North Dakota. There's also a bill pending in Oregon. So, what's interesting is it's coming from both sides in terms of some states with really well-established THC industries. They don't like saying, "Well, why do we have to go through all this red tape to bring a hemp product? We can't sell it in gas stations, we can't sell it. You have to be 21, and you have to see sale and all this hubidi hu. But meanwhile, this guy is selling Delta-8 in a gas station to teenagers, what is this?" And then you have critics on the other side who thought, "Whoa, whoa, whoa. We didn't know. We thought hemp was like rope and soap. We didn't know this was possible. We didn't mean for this." So I'm curious where that goes. A lot of this is not gonna come from state legislatures, just like in the federal government. A lot of it is gonna come from how the regulating agencies, whether it's public safety or your health department, interprets the law.
States have all different levels of how specific they get in terms of THC. Do they include all of its isomers and every kind of analog and all these...? This is very boring technical stuff, but it can really affect the legality. So people will get, argue, "Oh, Delta-8 is totally legal." And some people say, "No, no, it's absolutely not legal." It really truly depends the state you're in, and even the County and city where you're in, in terms of how they interpret the description of what THC is in your state statute. It is a confusing mess. And I think it's gonna get cleared up in a lot of states, starting pretty soon.
Joe: And as we talk about the federal level, I mentioned on the intro, the USDA, and while we wait for FDA possible guidance for industry regulations, there's been other headlines from Washington DC, including a proposed carbon bank for growing hemp, and some banking reform that includes a hemp-related provision. What does that mean on the federal side? Are we maybe paving the way for some guidance and regulation here soon?
Kristen: Absolutely. Non-stop news out of Washington. The biggie, I would say, very late last month, Amy Abernethy left the FDA. She's a physician who led their CBD workgroup. And yet another signal, if you needed another one that this is not gonna come quickly. We don't even know where that stands. Does the CBD workgroup start all over again? We'll have to see. But other things, there's a lot of optimism though about what this new Democratic Congress is doing. The house passed safe banking. This is a bill, it's aimed at THC marijuana producers to supposedly make it easier for...assure banks they can serve them. Banks already can, but there's a lot of paperwork. Some hemp folks are super juiced for this to pass because they still see banking challenges, challenges getting basic checking. It's more challenges getting capital, getting loans, getting other financial products from banks. There's a lot of optimism that if that passes, it will further assure banks that they can work with hemp and CBD clients.
I would caution though, and this is what I think is so interesting. I think the hemp industry is canary the coal mine for sure for our marijuana colleagues. And that is, just because a bank can lend you money, doesn't mean they will lend you money. There have been, of course, servicing a hemp producer or hemp manufacturer has been 100% legal. I would say, before the '18 Farm Bill. Then after the Farm Bill passed, all kinds of, the Federal Reserve and the National FDAC, all the banking regulators have said over and over again, "You can serve hemp." So when folks get frustrated that they're not finding access to the products, the financial products they want, it's really not Congress' fault. And I am first to blame Congress for everything, but this is, I think, market forces at work here. But there's optimism that things are changing.
The last thing I'll talk about, you mentioned a carbon bank. That is really interesting. Okay. So the USDA has this big pot of money they've had since the '30s, it's called the Community Credit Corporation, and it's a pot of money that Congress created in The Great Depression, basically to prevent like another dust bowl, to prevent like really bad ups and downs in agriculture. It has been used for lots of different ways over the years. The USDA can borrow up to 30 billion. They don't have to ask Congress. They can just basically write, again, to shore up American agriculture and prevent food panic, bad things happening in agriculture. We really saw that in the pandemic, right? You went to this, like...everybody was anxious. So there was a lot of work done at USDA over the last couple of years, addressing pandemic relief. And two, we were in a soybean trade war with China that really changed the game pretty quickly overnight for a lot of commodity farmers.
So now, we have a new administration. The pandemic, fingers crossed, is fading, or starting to fade, and thinking, how can we use this money? Maybe we should use it to address climate change. And maybe we should pay farmers directly to use regenerative ag processes that could help in climate change. Ag is a big contributor to carbon emissions, without...now, there's nothing in here that says hemp or cannabis, nothing. But because this plant can suppress your carbon pretty significantly, can be a real big part of a regenerative ag scheme. Some folks are hoping this could lead to direct payments to farmers for producing hemp in a sustainable way. This would be a total game-changer. It could also incentivize corn, soybean, wheat farmers, those kinds of old commodity farmers to try hemp in a rotation to access some of this money. Now, proof is in the pudding, we have seen no details. Right now, the USDA chairman, Vilsack, has even said, "I needed to learn from the farmers how this might work." The Farm Bureau, a lot of...the American Ranchers Association, a lot of big names are really not into this yet and want to know more details. I would say we're at the 10-yard line, but the optimism is there, that hemp could really be a big part of what the Biden administration wants to do to address and tackle climate change.
Joe: And speaking of the 10-yard line, and as we head towards the end zone on this episode, what are we keeping an eye on for maybe tomorrow's headlines? What are we keeping an eye on that might be making news in the next month or two that folks should be on the lookout for? If we can predict the future of these things.
Kristen: Yeah, I know. No, I think Delta-8 prices will fall the way CBD prices did, you know, nothing is going to be this magic 10 times more in CBD forever. That those prices, I think, will significantly fall. We'll see less interest in Delta-8. Everybody says the minor cannabinoids are coming again. I think those prices are gonna fall and they'll be less interesting. A lot of eyes on the UK in the next couple months, they have said by the end of March that CBD products had to have, basically had to be in the process to get this different certification or come off shelves. So, that deadline passed, but it's been slow. Right now, they've only said about 20 companies, not that they've approved to sell, they're saying, "Okay, we got your application." It's like the post office saying, "Okay, we mailed it out." Not saying that you have your package.
So, there's delays there. I think we're gonna be really watching and seeing what that bottleneck is like, because now the UK has their own process, but I think it's gonna be for...it's much smaller than what's gonna end up happening in the EU. So we're gonna learn a lot from what's happening in the UK, in terms of how CBD is regulated there and how it might be regulated in other countries like ours.
Joe: And you can actually find out more as a follow-up to that, and a cheap plug because we always have to promote our past episodes. You can learn more about the novel foods dossier with regulatory services from the UK. We did a podcast with a couple of folks from the UK back on episode 68. So, for more information on what we just discussed, you can catch up on that episode.
Kristen: What are you looking for next month?
Joe: Boy, all sorts of stuff, you know, shifting gears, get back into something we are looking forward to. And we just actually had shared this news on our social media networks is, getting back to in-person events, and some of our CBD, and some of our new alternative health and wellness products will be on display at Tobacco Plus Expo, May 12th through the 14th in Las Vegas. Speaking of Las Vegas and in-person events, MJBizCon will be held in Las Vegas this year. And I hear it's the 10th anniversary. Any details you can share on that? How folks can maybe sign up for some updates?
Kristen: Yeah. Yep. Okay. So, MJBizCon is the parent of...MjBiz is the parent of "Hemp Industry Daily." So it's my shop. Moving to October, it had been closer and closer to Christmas. This is, of course, before the pandemic in Vegas. Vegas show in cannabis, lots like 30,000 people. We don't know how many people this year, but we're going. We're pumped, it's going to be a hybrid, you don't have to go everything...there's also gonna be an online component if you're not comfortable traveling. It's in October, there's a new newsletter where you can get all the latest, go to mjbizcon.com, con com, mjbizcon.com and you can sign up for the newsletters.
Also, we're still accepting speaker applications through Jim. And this is a big deal. If you have a super smart idea in the industry, there's going to be a whole day about hemp and CBD. There's also gonna be more hemp and CBD, but there's science content. There's, you know, retailing and marketing content. So, please, bring your great ideas. And I'm so pumped to get back to in-person events. It is in the middle of the harvest. It's October now, but there's no great time that works for everybody, but this is much better for retailers to get kinda out of a holiday season. So I am super pumped to see everybody back in Vegas in October.
Joe: And I'm sure when we catch up on a future episode here in another couple months, we'll obviously have more details that we can share about that. But we wanted to mention that as we get back to in-person events and looking forward to that coming up in October.
Kristen, as always, thank you for taking time to join me on "The CBD University Podcast." We always love having you guys from "Hemp Industry Daily." And I know we've caught up quite a few times and I look forward to doing it again soon.
Kristen: Yeah. Thank you so much for your time and your help, you guys. It was great to be here.
Joe: Thanks, Kristen. Kristen Nichols, editor of "Hemp Industry Daily," my guest on this episode of "The CBD University Podcast." And don't forget to subscribe to our podcast wherever you get your podcasts. You'll get notifications each week when new episodes are published and you can catch full video episodes of "The CBD University Podcast" on the Global Widget YouTube channel and the YouTube channels of our brands. I'm Joe Agostinelli, host of "The CBD University Podcast." Thanks for tuning in.
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