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

Want to know the best time to plant hemp in the Midwest? Or what cultivar consistently produces a crop below 0.3% THC?

Researchers in the Midwest have successfully pooled that information despite the pandemic, creating a database designed to give farmers an idea of what to expect from their hemp cultivars in 2021 and beyond.

Last summer, researchers at the University of Illinois and the University of Wisconsin-Madison invited growers in their states to submit certain information about their crop for the database in exchange for a discount on cannabinoid sampling.

The result is the Midwestern Hemp Database, which also includes participants from Michigan State University, Purdue University and growers in their respective states.

“We wanted to work together to stop working in silos all the time and share information across the region, not just within our own state, and figure out what’s working and what’s not for our growers,” said Phillip Alberti, educator for commercial agriculture at the University of Illinois Extension.

“Also very importantly, what sources of genetics, what varieties out there might be more suited to their environment for performance issues or ultimately (THC) compliance, which of these varieties are going to produce a compliant crop.”

First-ever data sharing

The database includes information on:

• When a particular cultivar was planted.
• When it started flowering.
• When it was harvested.
• A cultivar’s CBD and THC profile.

Collectively, the data also provides growers an idea of how high CBD levels can get before the plants exceed 0.3% THC, for example, or what soil type is being used most (silt loam), and what planting method is most popular (transplants from seed).

Alberti said the database also helps get a picture of when is the best time to test plants for THC.

“Because that ultimately determines compliance,” he said. “What is kind of the peak window that growers can expect they’re going to be busier, that they really need to be paying attention to cannabinoid levels.”

Alberti said growers pay $30 for cannabinoid testing – about half the normal cost – per sample at Rock River Laboratory, Inc., in Watertown, Wisconsin.

“Cannabinoid profiling is very expensive,” he said. “It’s kind of the scariest thing growers have to deal with because in order to harvest their material, they have to show compliance.”

Success through the pandemic

Covid-19 restricted agriculture officials’ ability to collect data from the field last year, so having growers submit their own information was a good way to get data despite the pandemic, said Shelby Ellison, an associate professor of horticulture at the University of Wisconsin-Madison.

“It was great that we were able to get participation across the number of different states,” she said.

Paul Grethey Jr., owner of Simple Livin’ Farms in Groveland, Illinois, was among the growers who shared information for the database last year.

“What’s really cool about the hemp database is now you can actually compare what you grew against what other farmers grew, compare your soils, your nutrients…and you can see what’s going yield best in your type of soil,” he said.

The universities plan to continue collecting data again this year and hope to add participants from other states.

Ellison advises farmers not to focus on one factor when analyzing the database, but instead look for the bigger picture.

“Really look at the trends that you’re observing to inform you for both agronomic practices and cultivar decisions for the next year.”

Ivan Moreno can be reached at [email protected]

Hemp farmers getting federal pandemic assistance will see those payments frozen because of the changed administration.

The U.S. Department of Agriculture says that payments under the latest round of the Coronavirus Food Assistance Program are on hold “until further notice” — though interested farmers can continue applying through Feb. 26.

The latest round of coronavirus relief for farmers went live Jan. 15. Like the previous rounds, it was designed to provide additional direct assistance for agricultural producers who continue to face market disruptions and associated costs.

The payments are on hold under a directive from the White House to pause Trump-era programs for review. USDA said that help is on the way but did not elaborate.

“In the coming days, USDA and the Biden Administration intend to take additional steps to bring relief and support to all parts of food and agriculture during the coronavirus pandemic, including by ensuring producers have access to the capital, risk management tools, disaster assistance, and other federal resources,” the note said.

Also last week, the department suspended past-due debt collections and foreclosures for distressed borrowers under the Farm Storage Facility Loan and the Direct Farm Loan programs administered by the Farm Service Agency.

The USDA did not elaborate on when debt collections might resume, though it told farmers the extension “is expected to continue while the national COVID-19 disaster declaration is in place.”

It was not clear how many hemp producers would be affected by either suspension.

Biden nominee to lead the USDA, Iowan Tom Vilsack, was scheduled to appear Tuesday for a confirmation hearing in the Senate.