Venture into any gas station, vitamin store, smoke shop or even your local Walgreens, and you will be greeted by a range of CBD products from various companies. Although this compound has been around for centuries, only recently has it experienced such a high level of demand that everyone is trying to cash in on it – from large companies to mom-and-pop shops. With minimal guidelines in place governing the sale of CBD, consumers, manufacturers and state and federal legislators alike are calling for clear, defined regulations.
You want to be extremely proactive and think about safety and compliance from the government’s standpoint. Their job is to protect the consumer, and for us, that’s most important.
–Margaret Richardson VP, Regulatory, Compliance & Safety
But that wasn’t always the case.
According to Kevin Collins, Co-Founder and Co-CEO of Global Widget – an industry-leading CBD manufacturer and distributor founded in 2016 – the discussion around CBD has evolved over the years.
“Throughout all of 2016 and the beginning of 2017, the industry was all about education,” Collins said. “At the end of 2017, everyone knew about CBD, so we saw the conversation begin to shift toward legality. Thankfully, the 2018 Farm Bill cleared up a lot of those questions, but it also influenced the current discussion of compliance: where is it made; how is it made; and why is it made in that way?”
Despite its explosive growth, the real future of the CBD industry hinges on the much anticipated yet slow-moving Food and Drug Administration regulations and the ability of companies to prepare for and quickly adhere to such updates.
Collins and Margaret Richardson, Global Widget’s chief regulatory, compliance and safety officer, shed light on the past, present and future of compliance within the industry, as well as how Global Widget is staying ahead of these changes with its three popular CBD brands: Hemp Bombs, Nature’s Script and Perfect Paws Hemp for pets.
The Current State of CBD Compliance
Years ago, CBD was viewed as the “wild, wild west” due to a lack of guidelines for the production, packaging and marketing of CBD products. Fortunately, companies are not entering 2020 blindly, as many states have clearly outlined their stance on this increasingly popular compound.
“As it stands, most CBD issues are regulated at the state level,” Richardson said. “And while you may be compliant in Utah, which has several rules, you also have to consider the different laws put forth by Louisiana. So, until the FDA presents specific guidance, companies will always be slightly changing their approach to meet state standards.”
“…because we are an industry leader in CBD, they come to us frequently with different questions and requests.”
Richardson further explained that while companies are faced with meeting the requirements on the state side, they must also look ahead as to where the FDA will drive the industry. Recent warning letters issued by the federal agency have given insight concerning some of the do’s and don’ts for CBD companies looking to sell their products legally.
These warning letters make it clear that mislabeling the potency levels of products, making false claims of CBD’s ability to “diagnose, cure, mitigate, treat or prevent” diseases and the sale of food-based CBD products can land companies in hot water both with consumers and the government.
As the industry awaits the FDA’s regulations for Hemp-derived products, companies have a choice to set the benchmarks and prepare for the updates to come or fall behind in this rapidly changing business. Global Widget is one such company leading the charge in legitimizing the CBD industry through discussions on compliance and quality manufacturing with state and federal legislators.
“We’re in constant communication with the state,” Richardson said. “And because we are an industry leader in CBD, they come to us frequently with different questions and requests.”
Looking to the Future of CBD
The future of the CBD industry is a bright one, projected to reach $22 billion by 2022 or more, according to the Brightfield Group. However, for those companies incapable of quickly meeting the FDA’s standards, projections for survival are bleak.
“You must have skilled people in niche positions to keep your business going.”
– Kevin Collins Co-Founder & Co-CEO
“Once the FDA regulations come,” Collins said, “I see about a third of the market falling to the wayside due to the inability to meet standards.”
The reality remains, FDA regulations will mean stricter rules concerning labeling, storage, testing and more. Companies like Global Widget that hire experts in quality manufacturing and compliance, and have the funding and resources needed to execute change quickly, can take comfort in knowing they will be most prepared for any changes ahead.
Collins believes “you must have skilled people in niche positions to keep your business going.” This philosophy led to the expansion of the compliance team at Global Widget, beginning with the onboarding of Richardson in July 2019. Using her background in the pharmaceutical industry and previous work with the FDA as a guide, Richardson has made necessary updates in production processes and procedures to give Global Widget an advantage when the time for regulations come.
While there’s no way to know precisely what the FDA will require of CBD companies, a proactive mindset can help companies looking to prepare themselves for the impending changes.
“Whether the FDA requires companies to meet requirements A, B, C or D, we’re prepared to go down any route – and we’re likely already implementing these guidelines,” Collins said.
Said Richardson: “You want to be extremely proactive and think about safety and compliance from the government’s standpoint. Their job is to protect the consumer, and for us, that’s most important.”
Global Widget’s Competitive Advantage
Richardson likes to think when it comes to compliance, Global Widget is setting the bar high.
“We’re implementing a lot of processes that other companies are going to have to catch up with us on,” she said.
Processes for research and development, manufacturing, labeling and packaging, and shipping are all handled in-house by Global Widget. This vertical integration is vital to staying ahead in the industry and ensures the company can move faster than the competition and change course quickly when needed.
“…we’re going the extra mile and taking extra precautions to ensure our consumers get the best possible product.”
– Kevin Collins
“When it comes to vertical integration, we’re set to handle the product from seed to sale,” Collins said. “Because – in my opinion – these are the most important questions to a consumer, distributor or wholesaler: Where did you buy the product? How is the product produced and packaged? How was it grown, trimmed, cropped and seeded? And not only do we have the answers, we’re also in charge of the process.”
But it’s not just the vertical integration that gives Global Widget its competitive edge. Collins and Richardson believe that five key pillars are setting the company apart from the rest of the industry:
1. A Team of Career Professionals
A successful business begins and ends with the people. From graphic design and social media to technology and R & D, “everything we do is in-house,” Collins said.
Richardson stresses the importance of having staff who not only understands stability studies, scientific literature and the changes within the CBD industry, but who can also adequately implement such changes.
2. Cross-Departmental Training
Richardson believes that quality is everyone’s responsibility, so the entire staff is continuously trained according to the Good Manufacturing Practices (GMP) program. “It makes the customer more confident that everybody in the company is looking out for their safety,” she stated.
3. Quality Control Program
Perhaps one of the most precarious aspects of the industry revolves around lab testing. The in-house QC program at Global Widget involves a multi-stage approach: raw material testing and verification, in-process testing, finished goods testing, stability studies and a quarantine period.
“No one told us to go buy lab testing equipment, but we’re going the extra mile and taking extra precautions to ensure our consumers get the best possible product,” Collins said. Additionally, each batch of products undergoes third-party lab testing in an ISO-certified laboratory.
4. Compliance Program
When the time comes, it won’t be enough for a company to say they will meet state requirements. To successfully comply with legislation, company leaders should ask themselves, “Do I have someone on staff that understands and has worked with the FDA previously and knows how to read the Code of Federal Regulations?”
Headed by Richardson, Global Widget’s compliance program is making great strides acquiring the necessary permits and training to move forward with extraction and handling raw Hemp in accordance with the new Florida Food Hemp Permit Program.
5. A Proactive Mindset
As a company, Global Widget is always pushing its staff to be better, to ask themselves, “What can I do to make my product better? What can I do to make my dosing instructions easier to understand? How can I improve?”
Even without clear FDA guidelines, the company has taken cues from similar industries and has preemptively updated packaging by including child-proof features and eliminating transparent windows to maintain the integrity of the products.
CBD University: “Seeing is Believing”
Collins and Richardson say there are no empty promises or smoke screens with Global Widget. In fact, the company maintains that “Seeing is Believing,” and uses that theme to regularly hold educational seminars called “CBD University.” The day-long seminar gives distributors, wholesalers and retailers an inside look at the company’s over 100,000 square feet of facility space, putting the machinery, staff and processes on display for visitors.
CBD University also offers a Q&A with a panel of experts, including renowned cannabis attorney Rod Kight and experts in lab testing and sales strategies. Many of those experts appear on Global Widget’s CBD University podcasts, which are recorded weekly on-site.
For Global Widget, the vision is clear: Becoming the gold standard for CBD through a focus on compliance, safety, quality and continuous improvement, even as the industry awaits federal guidance.