Emerging markets

'The landscape for cannabis in food'

By Anthony Myers

- Last updated on GMT

The landscape for cannabis in food

Related tags Cannabis Cbd Hemp

An educational session at this year’s Sweets & Snacks Expo on the interest in cannabis-derived products came with a warning from the organizers that exhibitors were not allowed to sell any such products, which shows how controversial a trend it is. A panel of experts attempted to pick their way through the legal minefield.

There is no doubt there is a buzz about the use of cannabis-derived ingredients in the production of edibles and many experts agree that these types of products could be a significant emerging market and a disruptor for the food industry in the years ahead.

But the legal landscape remains, well, hazy, and there are still legislative and consumer issues that manufactures must be aware of before entering the market.

Tish Eggleston Pahl, a principal attorney at OFW law, offered guidance to a packed educational session on the topic at the Sweets & Snacks Expo.

It’s a complex and rapidly changing landscape​,” she said, “and making CBD legal in the US may even require an Act of Congress​.” For anyone contemplating entering the market, she strongly advises them to seek their own counsel.

Difference between hemp and marijuana

The difference between hemp and marijuana, for the purposes of regulation under the controlled substances act, is that marijuana contains more THC than hemp.

In the US, the 2018 Farm Bill changed the landscape and included a section on hemp that stated if hemp and its derivatives meet the definition in the Farm Bill, it is not a controlled and illegal substance under federal law.

The 2018 Farm Bill amended the control substances act, said Phal, but it did not change the FDA's authority to regulate food and drugs and their ingredients that go into food and drugs.

As long as THC content is lower than 0.3%, a product will meet the definition of hemp, only if it has been produced by approved means in US states where it has become legal. Phal said there could be new legislation in place in time for the 2020 growing season, but discussions are ongoing.

She said the 2014 Farm Bill permitted the cultivation of hemp, ‘pursuant to State plans’. The problem for manufacturers is that not every state developed a plan for hemp and that causes a problem as the hemp is therefore classed as marijuana and becomes illegal to sell, grow or transport.

Along with hemp, CBD is the most well-known cannabinoid and is sold throughout the US in food, dietary supplements and cosmetics with claims of health benefits in certain drugs.

CBD is not psychoactive and is not a controlled legal substance because it has less than 0.3% THC. Under the 2018 Farm Bill, once you put a cannabis-derivative in a food or cosmetic, you come under the purview of the FDA, said Phal, which will continue to regulate all use of cannabis or cannabis derivatives.

So, she asked, can you add these substances to a food or dietary supplement? The answer on the FDA's Q&A website is ‘no’.

In addition, many States have their own laws so potential producers need to be careful where they market or sell their products.

The market view

Christopher Quintos, a consultant at Euromonitor International, has been watching this emerging market closely.

From the market perspective, Quintos agreed that the use of CBD in foods is a shifting, dynamic market, but everything depends on legislation.

What is the size of the market and what are the trends?

Hemp/CBD: is it snake oil or nature’s miracle? Nobody really knows​,” said Quintos. “But it does appear to be the next green goldrush and it’s a fast growing industry.​”

According to Quintos, there are four things influencing the market:

  1. Regulation around food and supplements, as it is most popular way for consumers to consume these products.
  2. Wider availability of CBD products, at present they are only available through specialized channels.
  3. Health benefits of CBD for relieving pain and stress.
  4. Will cannabis become federally legal in the future?

Quintos said 26% of CBD products are edibles and technically illegal. But they are very popular and the FDA could crackdown on them.

What is driving the trend?

According to Euromonitor’s research, many consumers are searching for preventable solutions to illnesses without seeking professional help. The demand is pushing up the market but it’s not clear how consumers are using CBD. Recreational sales are driving the cannabis market.

Quintos said research shows a clear trend in the use of CBD is from ‘clean lifers’, the so-called young Millennials and Gen-Zers who are saying no to tobacco and alcohol and are the vape generation looking for natural alternatives to cut loose.

He also revealed that edible consumption is popular among older or female consumers and gummy candies and chocolate are the most popular edible choice.

Edibles will be pivotal to the growth of the US cannabis/hemp/CBD market​,” Quintos predicted, and micro-dosing will be the way they are consumed. He also said, to appeal to a mass market they have to taste nice: flavors are key, as well as the buzz.

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