STATEN ISLAND, N.Y. — While major manufacturers of health supplements and food additives have for the most part stayed away from the cannabidiol (CBD) industry, due to a lack of state and federal guidelines, Emerald Organics CEO Ian Parker decided to take matters into his own hands.
“The ‘old guard’ manufactures stayed away, and the market was flooded with immature contract manufactures with no understanding of compliance or standards,” said Parker. “We have our own (CBD) extraction team, so we know the product we’re selling.”
Emerald Organic originated as specializing in organic meats, but in January announced a merger with Pura Vida Health, a health and wellness company that uses CBD in their products. In the process, the company added harvesting and production elements to its operation to gain complete control of the CBD they process and sell.
CBD is a property of cannabis, which in its legal form is derived from the hemp plant, a member of the cannabis family and cousin to the marijuana plant.
In theory, by vertically integrating the company and establishing what Parker described as its own set of production guidelines, it should make for a smoother transition if and/or when, clear-cut federal and state regulations force inexperienced manufacturers out of the industry.
“(CBD) products that don’t do what they say they’re gonna do will eventually exit the market,” said Parker.
WHERE THE LAW STANDS
CBD currently is legal to sell and consume in New York, but under FDA guidelines it’s illegal to add it to anything else, like food.
Earlier this year, New York City health department officials began cracking down on local bakeries selling CBD products, according to a Vox report.
In Albany, lawmakers have passed their own bill to regulate CBD products, which awaits final approval, revisions or denial from Gov. Andrew Cuomo.
Other states, such as California, have meanwhile adopted their own sets of CBD regulations.
The legislation in New York would in part mandate that CBD products identify on the packaging where the hemp was grown, and require a scannable code to show consumers third-party testing results.
The confusion felt by New York business owners is reason enough for the state to clarify what they can and cannot sell, said state Sen. Diane Savino (D-North Shore/Brooklyn).
“Since everyone seems to be selling it, and they’re not supposed to be, it’s creating havoc,” said Savino.
IMPACT ON LOCAL FARMERS
In October, a federal bill to legalize the farming of hemp plants under USDA guidelines took effect.
The bill, however, didn’t address the extraction and sale of CBD from the hemp plant, a cousin to the marijuana plant that’s used for clothing, plastic, paper and CBD. Hemp contains minute levels of THC, which is the property in marijuana that elicits the feeling of being high.
That being said, farmers already producing hemp in New York are keeping a close eye on new legislation proposed in Albany.
Upstate farmer Allan Gandelman, president of trade organization New York Cannabis Growers & Processors Coalition, has said new regulations would help New York growers, according to an Albany Business Review report.
“If we do this right, and we protect New York farmers and we protect New York processors,” Gandelman said. “You’re talking about injecting hundreds of millions of dollars into the upstate rural economy, just this year alone.”
Savino concurs, saying “it’s important for the farming industry in New York.”
By 2021, hemp-relates sales in the U.S. are projected to triple to about $2 billion.