FDA Moving Towards Legalizing Hemp-Derived CBD Foods, Supplements as Producers Prep Isolates

May 30, 2019 - Baystreet.ca

This week Food and Drug Administration (FDA) begins the process towards allowing the addition of the nonintoxicating cannabis compound cannabidiol(CBD) to food, beverages and dietary supplements. The federal regulator will hear from CBD producers, researchers, growers, and retailers, looking at viability of federally legalizing the industry which research firm Brightfield Group projects to become a $22 billion business by 2022. Should the hearings go positively, the FDA could soon be giving a boost to a variety of companies with CBD assets, including CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP), Charlotte’s Web Holdings (OTC:CWBHF) (CSE:CWEB), Canopy Growth Corporation (NYSE:CGC) (TSX:WEED), Curaleaf Holdings, Inc. (CSE:CURA) (OTC:CURLF), and Green Growth Brands Inc. (CSE:GGB) (OTC:GGBXF).

Ahead of the FDA’s announced set of hearings, diversified cannabis sector company CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP) announced a 5-month CBD isolate supply agreement with California-based CBD isolate distribution company, Bioscience. The whopping deal, worth an aggregate of nearly US$90 million begins later this year in November, and carries out until the end of March 2020. As per the terms of the deal, should the supply agreement be extended, the overall value balloons to over US$131 million.

The economic and medical potential for CBD is impossible to ignore. The FDA will be weighing the pros and cons of a CBD market that NPR is calling a new “Gold Rush”. The hearings follow on the heels of last year’s 2018 US Farm Bill, which essentially legalized hemp-derived CBD production across the country.

Other federal regulators are already loosening their scrutiny on CBD, with the Transport Security Administration (TSA) recently quietly changing its policy on allowing passengers to fly with some forms of CBD oil on flights. The agency updated TSA.gov to reflect new regulations that allow FDA-approved medical marijuana and products that contain hemp-derived CBD oil—marking a major departure from its previous no-exceptions policy.

“Interest continues to skyrocket,” D.C. attorney Miriam Guggenheim, co-chair of the food, drug and device practice group at Covington & Burling told CNBC. “It is mainstream, interest is mainstream. It is not fringe anymore, which doesn’t mean mainstream companies are ready to jump in. But they want to be prepared to do so once the legal landscape is clarified.”

Given the mighty claims of CBD’s somewhat magic elixir qualities in treating everything from inflammation to epilepsy, there are many interested parties waiting for the official green light before the industry truly takes off.


Thanks to its forgiving growing conditions in the more elevated sections of the state, groups like CROP Infrastructure Corp. (OTC:CRXPF) (CSE:CROP have identified Nevada as the ideal location for CBD production. With both production and extraction licenses in hand for 2019 and beyond, CROP has amassed a farmland block totaling 2,115 acres devoted to hemp CBD production.

In Nye County, through a partnership between its subsidiary Elite Ventures Group, and licensee The Hempire Company, CROP completed construction on a state-of-the-art 57,600 sq ftnursery designed to maximize CBD yields, reduce farming risk, as well as costs for the 2019 planting season. Across the entire operation, the Nye County farm also has 1,350 acres under pivot irrigation using organic growing metholdologies.

Already the facility has secured a major supply deal, with CBD isolate giant, Bioscience. The California-based company has contracts across the continental USA, Canada, and European Union for domestic grade isolate, oil and aerosol products.

“We are thrilled to be working with such an innovative group as CROP on a partnership that we hope will flourish within the progressing CBD industry,” said Richard Parker, President of Bioscience. “Having the best products on the market is what we believe makes Bioscience stand out as a reputable supplier, and without producers like CROP that would not be possible.”

Michael Yorke, CEO of CROP added, “While the monetary value of the Supply Agreement is significant for CROP and its stakeholders, the relationship we are building with the team at Bioscience is key to our continual efforts to become a key player in the CBD production space and the development of new strains of product for isolation which will complement Bioscience’s industry leading clientele and what both Bioscience and CROP believe will be in demand in 2020, 2021 and far beyond.”

The CBD isolate deal is indicative of the lucrative possibilities for the CBD market, which is driving more innovation ahead of the FDA’s potential loosening of restrictions on what can and can’t have CBD added to it.

CROP also has plans for its own products derived from CBD isolates. The company has announced plans to infuse its CannaDrink functional beverage with hemp-derived CBD, potentially coming from its Nevada-based operations and those of its licensee partners.

CROP is also developing lines of CBD capsule and tinctures. Under the company’s Hempire and Tiff CBD brands, Crop will sell hemp, CBD isolate, and related products and will be utilized for the Canna Drink beverage line.

"We believe in the nutritional spectrum and health benefits of both hemp and CBD so adding a consumer goods vertical is a logical progression as consumer data shows strong trends in plant-based foods and nutritional products,” said Michael Yorke.“We see it as a tremendous opportunity for CROP Infrastructure's branding & IP portfolio."


Beyond this latest Nevada CBD supply deal, the sector has seen innovation and increased mainstream acceptance as of late. The following developments indicate a market champing at the bit to get rolling on the new Gold Rush:

Charlotte’s Web Holdings (OTC:CWBHF) (CSE:CWEB)

Somewhat seen as pioneers in the CBD revolution, Charlotte’s Web recently reported a 66% growth in revenue in the first quarter of 2019, leading the company to reiterate its full-year revenue guidance from $120 million to $170 million. The company’s stock has been on a roll, having gained 20% in the past six months, as it began May 2019 announcing a public offering of 7 million common shares at a price of $20.00 per share for gross proceeds of approximately C$140 million. It also announced the launch of 12 all-new SKUs, focused on the fast-growing animal health CBD sector—which cannabis research firm Brightfield Group expects to reach a market size of US$1.16 billion by 2022.

Canopy Growth Corporation (NYSE:CGC) (TSX:WEED)

Through a strategic celebrity partnership deal with media mogul Martha Stewart, Canopy Growth also plans to launch a line of CBD pet products. However, the cannabis giant also has hinted towards disrupting the multibillion-dollar sleep aid market. A 2013 preclinical study in rats found that CBD appeared to increase total sleep time, and earlier studies found that humans taking CBD slept significantly more than individuals on placebo. Through its recent acquisition This Works, a skin care and sleep solutions company, Canopy Growth plans to develop a new line of CBD-infused sleep products.

Curaleaf Holdings, Inc. (CSE:CURA) (OTC:CURLF)

Not to be left out on the CBD pet product rollout, CuraleafHoldings announced the launch of its new product line, Bido, which are hemp-based CBD products for pets. CBD has been shown in initial third-party studies to support a pet’s overall wellness including the potential to help manage pain and anxiety. The Bido pet drops come in three varieties, bacon, salmon, and unflavoured “pure”, as well as Bido soft-baked bites available in apple chicken, peanut butter bacon, and honey sweet potato. Curaleaf’s human products lines are also gaining mainsteam success, through a sales deal signed with retail pharmacy chain giant, CVS Health is adding CBD products in select stores across the United States. Curaleaf executives said CVS will start offering their lotions and transdermal patches in approximately 800 stores.

Green Growth Brands Inc. (CSE:GGB) (OTC:GGBXF)

The retail gurus in charge of Green Growth Brands continue to secure distribution deals to get the company’s Seventh Sense line of botanical therapy topical CBD products on the shelves of big name retailers. Months ago, they announced a deal with shoe retailer DSW Inc. to sell CBD products in 96 locations within the US. Most recently, the company signed another deal with Abercrombie & Fitch, to sell CBD-infused bath bombs, and other body-care products in a limited number of stores. The Seventh Sense brand will also be growing its footprint in malls across America, through a deal signed with Simon Property Group, that will see a rollout kiosks and stores in 95 shopping malls, and including 108 locations.

Legal Disclaimer/Disclosure: While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our article is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment. Furthermore, it is certainly possible for errors or omissions to take place regarding the profiled company, in communications, writing and/or editing. Nothing in this publication should be considered as personalized financial advice. We are not licensed under any securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this article is not provided to any individual with a view toward their individual circumstances. Baystreet.ca has been paid a fee for CROP Infrastructure Corp. advertising from the company. There may be 3rd parties who may have shares of CROP Infrastructure Corp. and may liquidate their shares which could have a negative effect on the price of the stock. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this article as the basis for any investment decision. The owner/operator of Baystreet.ca has purchased shares of CROP Infrastructure Corp. through a private placement and does not intend on selling any shares within 72 hours of this updated publication date after such point we reserve the right to buy and sell shares in the open market, no further notice will be given. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing Baystreet.ca, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.