CANNAINVESTOR Magazine October / November 2016 - Page 95

The Growing of Industrial Hemp and the CBD Industry

Industrial hemp is cannabis, but in the United States, it is legally defined as a cannabis plant that has less than .3 percent THC. Until February 2014, when President Obama signed the Farm Bill into law, the growing of industrial hemp in the U.S. was illegal. The Farm Bill allowed the growing of industrial hemp for research and development purposes in states that had a regulatory process typically under a state’s department of agriculture.

While the Farm Bill did not allow the commercial sale of industrial hemp or any of its byproducts, many state-licensed growers of industrial hemp in states including Colorado, Kentucky and Tennessee have ignored the illegality of commercially selling products derived from industrial hemp. Many of these industrial hemp growers are selling seeds. Others are extracting the cannabinoid, CBD from the flower and trim, primarily for the medical market. While not approved by the Food and Drug Administration (FDA), CBD is acknowledged as having many benefits, including as an anti-inflammatory and a neuroprotectant.

While illegal under Federal law, many growers and processors of industrial hemp are commercially selling CBD, hemp oil, and other products derived from industrial hemp not only in their state but across state lines. The common justification is that selling products derived from hemp, including CBD, is not an enforcement priority for the Drug Enforcement Administration (DEA) because CBD is not a psychoactive substance.

Companies Focused on Cannabis Research

There are many companies who researching cannabis despite the legal and operational challenges they encounter. In many cases the goal is the development of a compound that could be approved as a medicine by a government regulator, such as the U.S. Food and Drug Administration (FDA). The country that leads the way in this field is Israel,where research has been underway for decades.

Research is occurring in three different areas

First, research is underway on the plant itself. This includes plant genetics, breeding of various strains or varieties with desired characteristics, and cultivation techniques. Much of this research can result in a product or service that can generate revenues relatively quickly.

Secondly, basic scientific research is underway to better understand the various cannabinoids, terpenes and other substances of the cannabis plant and their effect on the human body. Much of this research is basic science and is university-based, without any envisioned commercialization or business model.