The cannabidiol (CBD) sector has probably given regulatory authorities a ton of headaches. Only a year old, the industry is now worth millions in sales, and experts predict it could hit $20 billion by 2026. The chemical is extracted from hemp, a variety of cannabis that has minuscule levels of THC, a chemical that makes marijuana users high. The plant was outlawed for decades, and it was only the 2018 Farm Bill that freed it from prohibition and allowed farmers to grow the crop.
Although there’s limited scientific evidence, users claim that CBD is a potent medicine, perfectly capable of managing a host of ailments ranging from high blood pressure to chronic pain.
However, the sector’s meteoric rise was also its undoing in a way. The industry grew so fast that regulatory authorities were left playing catch up, resulting in a sector filled with thousands of unregulated products claiming untold medical benefits.
Consumers in New York, however, can rest a little easier after Governor Andrew Cuomo signed a new law that sellers believe will defend customers from dangerous products by helping them make informed decisions and purchases.
Passed last December, the legislation would require hemp businesses to test their products. Hemp growers, processors, retailers and companies that are planning to sell hemp extracts will have to acquire a state permit to conduct their business.
The law hands over management of hemp cultivation to the Department of Agriculture and Market, and the Department of Health will be in charge of hemp extracts. According to a Department of Agriculture spokesman, the bill doesn’t affect licensed hemp growers immediately, nor does it alter the state policy that outlawed the addition of CBD to food and beverages.
Jessica Naissant, a shop owner who sells locally manufactured CBD products like oils, soaps and lotions supports the new law 100%. She says that consumers need to know that the CBD products they buy are safe and from credible sources.
Her shop stocks products that have been independently verified by a third-party lab, and they all come with a certificate of analysis that shows how much CBD is infused into the products.
Some players have argued that the cost of securing permits and third-party tests will act as a barrier to entry against small businesses. The Governor’s office has stated that the cost of securing state permits hasn’t yet been decided. Furthermore, the Governor states that the state of New York is planning to hold a hemp summit to discuss priorities and policies regarding the CBD industry, most likely in January.
Experts are of the view that CBD companies like MCTC Holdings Inc. (OTC: MCTC) and Grapefruit Boulevard Investments Inc. (OTCQB: IGNG) would like to see more states following the lead of New York State so that consumers and manufacturers know the specific rules under which the industry is operating.
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