As research broke over the past two weeks that cannabis products including CBD, cannabinoid acids and even synthetic cannabis compounds may prevent or treat COVID-19 infections, excitement among hemp entrepreneurs spread.

Interest in the seemingly stagnant hemp biomass, CBD and CBG markets soared to highs not seen in three years. Prices are on the rise again and hemp producers are fielding calls from a slew of interested parties hoping to cash in on the news.

Considering the ups and downs the hemp industry has struggled through since it became a legal commodity in December 2018, it’s easy to understand the enthusiasm.

It’s good to see positive COVID-19 headlines for once, especially when they are about cannabis.

But is it too early for hemp entrepreneurs to profit from research that hasn’t yet been tested in human clinical trials?

And what are the compliance and legal risks for cannabinoid product makers peddling products as COVID cures?

Researchers and industry leaders have urged caution among consumers and industry alike.

“Science is not the result of one or two studies. It’s a long process based on peer review and the opportunity for replication of results,” said Hemp Industries Association executive director Jody McGinness.

“As much as we are encouraged by studies that open up people’s eyes to the possibilities, we want to caution anybody against extrapolating from the results of early studies to any type of claims about the efficacy of cannabinoids.”

Industry ramping up anyway

For Bend, Oregon-based hemp producer Wesley Ray, Oregon State University’s study showing cannabinoid acids can prevent COVID-19 from entering human cells has validated his own work growing and processing CBDA and CBGA over the past few years.

Since news broke about the research, Ray and his partner Shannon Little have been inundated with calls and emails from retailers, formulators, distributors, recreational marijuana businesses, and even government entities, looking for raw material, crumble and tinctures to produce white label products and more.

“And then you have the bigger companies that are wanting to do some pretty crazy numbers (like) 25 kilos every two weeks,” Ray said.

He’s selling CBGa and CBDa crumbles in bulk for $2,900 per kilo or $5,000 per single kilo.

“The prices on that are obviously up. And if farmers are smart, they would hold back their biomass and not just liquidate it,” Ray said.

“I would put $20 a pound on my CBG biomass right now, just because I know how many pounds are going to go in to make a kilo and I know the input costs, and I don’t think the lab should be the only one making margins.”

Prices haven’t seemed to go up across the board yet in response to recent research results, but it’s still early and the interest is clear, according to Julie Lerner, the founder and CEO of Denver-based commodity selling platform PanXchange.

“There is no doubt that demand and inquiries are picking up for several processors in the country, but so far activity has been mostly directed toward CBDA and CBGA products,” Lerner told Hemp Industry Daily in an email.

“Demand has not yet picked up in biomass; our January prices are on par with December. However, a late-month rally pushed winterized crude prices up $5/kg this month.”

Compliance matters

The research findings supporting the role of cannabis in human health “moves the scientific conversation forward” and show the industry is one step closer to “unlocking the many benefits of cannabis,” said Asa Waldstein, principal of Boulder, Colorado-based Supplement Advisory Group, which advises herbal products and cannabis entrepreneurs on federal compliance.

That said, “it is a prohibited act to promote non-drug products as a cure for any disease or virus,” Waldstein cautioned in an email to Hemp Industry Daily.

“I urge companies to fight the urge to exploit this news to sell products.”

As has been the case with all other claims that have prompted the U.S. Food and Drug Administration and the U.S. Federal Trade Commission to sanction cannabis product manufacturers, anything on a commercial website or social media is considered marketing, he pointed out.

“Although unadvisable, if a company must risk posting about (cannabinoid and COVID research), they should ensure there is no mention of their product or company in the post or blog,” Waldstein said.

“This includes removing any shopping cart-linked call to actions and product pictures.”

Waldstein added that FDA and FTC authorities consider the “reasonable consumer takeaway,” which means if consumers think a company’s blog or post is about its products, the authorities do, too.

“I asked a top FTC official about ‘educational’ blogs on commercial websites. He responded, ‘What is the purpose of posting an educational blog on a commercial website, if not to sell products?’” Waldstein said.

“This further demonstrates the authority’s position when posting about disease therapies on a supplement site.”

And with the number of “cringe-worthy product claims” aiming to cash in on scientists’ research, companies promoting COVID research with links to products should consider FDA and FTC enforcement “a given,” Waldstein said.

Waldstein pointed to 25 COVID-related warning letters that the FTC sent earlier this month, showing the regulator’s “renewed dedication” to stopping companies from making misleading claims.

“The FDA/FTC makes examples of companies not following the rules, especially in areas they want to highlight,” he explained in an email.

“I predict we should see a batch of CBDA and COVID warning letters coming out in the next couple of months.”

Universities could push back, too

It’s not just government compliance companies need to consider.

Cannabis entrepreneurs that are openly promoting products in the name of university research may also be violating intellectual property laws provided to researchers, said Jay Noller, director of the Global Hemp Innovation Center at Oregon State University.

“There’s this presumption that because it was published, it’s theirs to use,” Noller told Hemp Industry Daily.

“International and U.S. patent law is such that to not check in with the publisher or that institution, we’ve seen that in other industries where the presumption leads to downstream reaches for violation of that IP.”

Even in cases of publicly financed research, scientists and universities have IP rights on findings that can produce results such as inventions, scholarly publications, new plant varieties, confidential information and more – even if they are proof-of-concept or laboratory-scale prototypes that require additional research and development before they can be commercialized.

Hemp entrepreneurs therefore need to do due diligence that they aren’t violating prior IP, Noller said.

Perhaps because the makers of the only CBD drug sanctioned by the FDA, Epidiolex, aren’t in headlines suing over-the-counter CBD makers, some cannabis operators may assume they are safe to market their own CBD products.

But that’s a risky assumption, Noller said, pointing out that such cases can take years to build, as in the seven-year patent battle over smart phones between Apple and Samsung.

Further, cannabis companies should consider that investment in research could yield faster industry development than investments in marketing, Noller said.

“We saw that for three years: branding, marketing. And then you have one science paper come out on a very, very limited budget. …That’s how it’s going to work.”

“So I think we’ve we’ve been able to demonstrate, if not shame, the industry into its disproportionate attention to fantasy versus reality, and that’s truth in science.”

Laura Drotleff can be reached at laura.drotleff@hempindustrydaily.com

(This is the first of a series focused on planning for best cultivation practices for hemp and marijuana growers. Look for additional stories on handling young plants, stocking up on supplies, fertigation and other topics throughout the year.)

Outdoor hemp and marijuana growers are getting ready to get their crops in the ground in the coming weeks, but before they sow seeds or plant clones or seedlings, it’s important to get a good start with proper soil testing, conditioning and preparation.

Crop yield and performance is impacted by field selection and soil preparation, making where and how cultivators grow just as important as what they grow.

And generally, because marijuana and hemp crops are such similar crops, the same soil health practices work for both.

“I think the difference in THC and hemp when it comes to production and soil prep is really the market value,” said Skip Newcomb, farm director at East Fork Cultivars in Takilma, Oregon, a producer that grows both hemp and lower-THC marijuana for CBD production.

“That’s the big difference for us is, we put more into it, knowing that we’re going to get that out of it, but essentially it’s the same exact plant – it grows the same, it looks the same, although I would say THC genetics sometimes do have a little more vigor.”

Soil type

Growers – especially those who produce other crops – may be tempted to pick their worst field to produce hemp or marijuana, because they may consider it risky crop.

But choosing a flat field is key to good yield at harvest, especially if mechanical harvesters will need to navigate that terrain, said Eric Singular, director of development and communications with International Hemp, a hemp genetics company in Denver.

Young plants need enough moisture when they’re first planted to ensure that seeds can germinate and emerge – but once crops are established, too much moisture can be detrimental.

Cannabis doesn’t like “wet feet,” which is to say it doesn’t like to sit in water, so one of the first things growers need to assess is their soil type in the field and the drainage situation.

Ideally, growers will have porous, loamy soil, but hemp and marijuana can grow in any type of soil, as long as it has proper drainage, according to Scott Propheter, a farmer and CBD executive in North Carolina.

“I’ve seen fantastic crops grown on straight red clay. I’ve seen fantastic crops grown on extremely sandy soils. But I think the basic principle that that applies across all of them is, they were well-drained fields,” Propheter said.

Testing, testing

The first step growers need to take to get ready for growing season is order soil tests, which can reveal information such as soil alkalinity, nutritional imbalances and contaminants like heavy metals and pesticides.

Many growers test soils after crops are harvested in the fall, so they can take steps to add any necessary amendments or plant cover crops before the winter, according to Singular.

Late winter to early spring, when fields are staring to dry out, is also a good time to test soil. But be sure to account for enough time to order soil amendments and have them delivered, as this can take some time depending on the location of the grow.

According to Singular, test fields in the spring when the temperature is around 40 degrees Fahrenheit to determine soil temperature.

In southern regions of the U.S., some hemp growers learned the hard way in 2020 that direct sowing seeds in the ground when the soil temperature is 80 to 90 degrees Fahrenheit means that the seeds won’t germinate, “because the seeds just bake in the ground,” Singular says.

Testing for contaminants such as residual pesticides and heavy metals is important for flower, biomass and grain crops – especially for growers pursuing U.S. Department of Agriculture organic certification for hemp or a comparable local certification for marijuana – although some states don’t require it, even though they test crops for contaminants after harvest, said Newcomb.

Noel Garcia, chief operating officer and head crop production consultant with TPS Lab in Edinburg, Texas, said he advises growers to test for heavy metals before they plant anywhere.

“I can’t stress enough how important a soil test is,” Garcia said.

“Hemp is a huge bio-accumulator, meaning it accumulates heavy metals, and a lot of times people would totally disregard that before they even considerate planting or even worse before they even consider buying a piece of property.”

He said there are some areas in Texas and other parts of the country that have high levels of arsenic or cadmium; growers may not realize that until they harvest and try to sell.

“Then the processor will send a sample to the lab and test for heavy metals … and come to find out you’re very high in arsenic and cadmium, and now you lost your entire crop, and you won’t be able to sell it.”

Weed-free fields

Planting in “clean” fields is another key success strategy, though there are few herbicides, if any, that are registered for use on hemp through the U.S. Environmental Protection Agency – and none cleared for use on marijuana crops – so growers don’t have the option to “burn down” weeds with chemicals, like farmers do before planting traditional crops, to ensure a clean field before planting.

Growers can naturally mitigate weeds by planting as early as possible, to let the plants get established before weeds start growing.

“As soon as the soil temperatures get warm, if weeds are growing in the field, that means the crop could be growing in the field,” Singular said.

“If you’re getting in the ground right when those soil temperatures are starting to go north of 40 degrees, you’re going to beat the weeds, and that is by far the most environmentally friendly way to manage your weeds, just getting in early and getting that canopy established,” Singular said.

For grain and fiber hemp varieties, growers can also try planting 5 to 10 more pounds of seed per acre than they need to cut out room for the weeds to grow.

Laura Drotleff can be reached at [email protected]

An expanding tissue-culture laboratory with locations in Washington and Canada has entered into a joint venture with Australis Capital, a U.S. spinoff of Canadian marijuana producer Aurora Cannabis.

3 Rivers Biotech Inc., an agricultural technology company that specializes in commercial-scale micropropagation for marijuana, hemp and traditional crops including vegetables and fruit, will own 85% of the joint venture focused on marketing plant tissue culture offerings, to Australis Capital’s 15% ownership.

Under terms of the agreement, 3 Rivers will provide access to its “intellectual property and services, products and solutions” for Australis Capital clients, including future offerings such as tissue culture-based autoflower genetics and pest control, pathogen testing and genetic fingerprinting innovations.

In turn, Australis will contribute sales and marketing capabilities, and new opportunities through its industry network, according to a company statement.

Through its partnership with JRT Nurseries, a greenhouse operation and tissue culture lab in Mount Vernon, Washington, 3 Rivers can ship plants globally, and it is in the process of expanding its capacity in Washington, California and “other jurisdictions.”

“By teaming up with AUSA, we believe we will be able to access new sales and marketing channels and rapidly expand our global footprint for (plant tissue culture) of cannabis, hemp and traditional crops,” said Robert Allen, CEO of 3 Rivers.

With this joint venture and other U.S. investments, Australis Capital is building a foothold in the market.

The company is working to close a transaction to acquire 51% of ALPS, a horticultural crops consultancy, with the option to acquire the rest if completed, along with the acquisition of Green Therapeutics LLC, a multi-state marijuana producer with operations in Nevada, Missouri and Oklahoma.

Australis Capital trades on the Canadian Securities Exchange as AUSA and on the over the counter QB market as AUSAF.

Minor cannabinoids have been gathering interest among growers and extractors over the past year, with research on CBG, CBN, CBC and THC-V showing unique health benefits for consumers.

But are consumers even aware of these molecules and is there demand in the marketplace? And are there genetics available that can yield enough of these minor cannabinoids to make them worth the investment?

Jonathan Vaught, CEO and founder of Front Range Biosciences, a hemp and cannabis genetics producer in Lafayette, Colorado, said that although consumer awareness and interest is still in the early stages, the genetics are coming online for growers to begin producing hemp for minor cannabinoids.

His company is launching a new line of THC-V genetics in collaboration with partners in the marijuana space in California and Colorado as well as working on developing THC-V genetics along with genetics that are dominant in other minor cannabinoids.

Hemp Industry Daily caught up with Vaught to discuss his viewpoints on the future of minor cannabinoids.

How does THC-V differ from other minor cannabinoids?

THC-V is a separate molecule than THC or CBD. It’s very closely related structurally to THC – it’s just got a different side chain on it, so it makes it a different molecule than THC – either delta-9 or delta-8 or other cannabinoids.

That being said, THC-V has been rarely observed … and it’s generally produced at fairly low levels because, for multiple reasons, biologically, it’s a mutation in the pathway that allows it to produce THC-V.

Most plants that do have this mutation generally don’t produce very much, and when they do – if they’re bred to produce that much – then the plants are generally fairly poor performing. They don’t produce very good weight, they don’t produce high overall cannabinoids and terpenes, they’re just generally not very easy plants to grow and produce.

With the technology that we’ve developed, we are now unlocking that. There’s a variety that’s producing 20% plus total cannabinoids and it’s close to 1:1 THC-V to THC. That’s why the first launch, with our partners out in California, are taking this to market in the regulated cannabis space there.

So that’s just Step One – biologically, it makes more sense for high THC-V to be in the cannabis bucket. We are working on helping develop hemp-compliant versions, as well, but because of the biology, it is more challenging.

We’re discovering things about the genome and about how this plant works, from an underlying biology perspective, that will enable us to directly develop hemp-compliant versions of high-THC-V-producing plants as well.

What excites you most about THC-V, for both consumers and the industry?

We see THC-V as such an interesting cannabinoid. People are reporting really exciting characteristics – things like appetite suppression, stimulant qualities and a less-intoxicating type of experience.

This is a really exciting new ingredient from a consumer-product perspective because it really can begin to change the landscape of the type of experiences that are available to consumers through cannabis.

By improving not only the total amount of THC-V that gets produced in the plant but also some of the other characteristics – high terpenes and total cannabinoids – it produces more weight and more flower, and it’s more vigorous.

Those are all the things that are going to make it easier for growers to produce this and introduce it in the supply chain.

So, you combine that with the excitement on the consumer-product side and the opportunity for brands and consumer cannabis products to be available that provide customers new experiences – that combination is what is so exciting here.

And I think we’re honestly just getting started.

How aware would you say consumers are about THC-V and other minor cannabinoids, and do you feel that the market for minor cannabinoids has improved over the past year?

In general, it’s been somewhat elusive to growers and breeders and in the supply chain, so you just don’t see a lot of THC-V products out in the market yet – consumers generally don’t know much about it.

There’s a fair amount to learn about it from a consumer education and total market perspective, but it’s the same for other cannabinoids, too.

You could say the same thing about CBD six or seven years ago. … All that changed once it was discovered that there’s a real medical benefit, and now CBD is a whole industry.

Growers have been excited about some of the minor cannabinoids, but they’ve held back because the genetics haven’t been there or they weren’t sure of the demand. Is it safe to go ahead and start growing for minors now?

The underlying philosophy is the same for all cannabis growers. A lot of companies learned this the hard way, but, generally speaking, before you grow something, you want to know where that crop is going to go, right? What is your market for the end-use product? Is it a flower crop? Is it a CBG crop? Is it a THC crop?

If you look at it through the lens of traditional agriculture and other crops and other supply chains, it really is about, is there a market, who’s going to buy it, and what are the reasons they’re going to buy it for? And that’s why growers should be growing things.

How do minor cannabinoids fit within the growing wellness category?

I think there’s a huge opportunity.

It’s a big trend on the consumer side but also from the medical research side that we can be healthier as a society and as people if we eat better, if we take things that are more preventative in terms of wellness versus waiting to have a real problem and then trying to treat it.

We know that the endocannabinoid receptor system is throughout almost every major organ system in our body, and we know that it’s involved in a number of different physiologic processes that are happening in our bodies that either affect disease or wellness.

Combine that with the fact that there are well over 130 unique cannabinoids produced in this plant – maybe even more at this point – and some we haven’t even discovered.

Also, cannabinoids have been generally safe compounds. There are no reported examples of extreme adverse events or deaths, and there are limited clinical studies. But in the ones that are out there, cannabinoids seem to be fairly safe.

So all that together is the recipe for an incredibly exciting area of growth in the wellness sector.

How could companies developing synthetic cannabinoids affect the market for naturally occurring minor cannabinoids?

I think there’s room for both in the supply chain.

If you’re talking about an active pharmaceutical ingredient that needs to be 99% pure, there may be applications where synthetic biology is the right way to support that supply chain.

Whereas, if you look at a full-spectrum or a broad-spectrum extract, that’s more of a wellness product.

You don’t want a pure compound. You’re looking for the combination of cannabinoids, flavonoids and terpenes – and the other amazing things that are found in this plant – all together in a consumable package.

This interview has been edited for length and clarity.

Laura Drotleff can be reached at [email protected]