Cultivating Entrepreneurship Webinar
This webinar was about an hour long, featured 5 panelists, and discussed a wide variety of topics. You can watch the entire Webinar here, or read through this article to get a quick recap of it all!
We’ll breakdown who spoke, questions & answers throughout the webinar, and what our major takeaways were from the webinar.
5 panelists that spoke -
Marielle Weintraub - USHA Executive Director
Rend Al-Mondhiry - Law Firm of Amin Talati Wasserman
Amber LittleJohn - Minority Cannabis Business Association Executive Director
Ron Conyea - Hemp Farmer in Kentucky - Hemp Farming Organization Director
Tonya Lewis - Co-Founder & CMO of NuSachi CBD out of Nashville TN
Questions For The Cultivating Entrepreneurship Panel
First Question - We started talking about the 2018 Farm Bill - What does this mean, and does this allow anyone to grow Hemp?
Rend Al-Mondhiry took up this answer. In short, she said the 2018 Farm Bill removed products that met the definition of hemp from the controlled substance act. But, this bill still allowed the FDA to regulate these products.
But, as she points out, the FDA stance is still that CBD ingredients can’t be considered a dietary supplement because it was first studied as a drug. But, despite this position, there isn’t a lot of enforcement on these rules right now, which explains why so many CBD products are still on the market today, despite the technical FDA stance on CBD.
Second Question - All possible benefits from the Hemp Plant - What are all the opportunities in Hemp?
Tonya Lewis - Industrial hemp is thought only of as an oil, but we can use it for fiber, construction or BioFuels. One quote from Tonya, which summarized her answer very well, was that we are “Just scratching the surface when we focus only on the oil itself”
Third Question - We tackle the supply chain issue in Hemp - What is it about the supply chain that makes it so hard for small businesses to break in, and what can you do to stand out?
Tonya Lewis - One of the big issues breaking into the supply chain now is that major companies already have an established supply chain. It can take a lot of capital to start a Hemp/CBD business, things like purchasing your seeds, equipment, finding your labor, marketing dollars, etc. can all lead to a very high barrier to entry. You’ll need to be well funded in order to break into this industry, in Tonya’s opinion.
Fourth Question - Can you be a small Hemp farmer? If somebody has a small plot of land, and they want to grow Hemp, what would your advice be?
Ron Conyea - If you can do a great job, and grow a good product, he believes this could lead to contract work later on. He gave an example of growing a few acres of Hemp, partnering with other smaller farms, and slowly selling & building out your network.
Fifth Question - Key financial challenges in the Hemp & THC side of Cannabis - Given the limited access to startup capital, what financial advice would you give?
Ron Conyea - Because Hemp is a new product, you want to start with small quantities, and really make sure you have buyers in line to sell that Hemp. You’ll need to be in a specific region in the country where processors are looking for Hemp. One example is in the poultry industry, any loan approved there is 100% backed by the government, and we hope that Hemp could fall into that category as well.
Sixth Question - Government Grants/ Non-Profits - Any funding or opportunities for government programs/non-profits that can help out small business?
Ron Conyea - Crop insurance is relatively new for Hemp, but this could help with finding funding. But, he didn't know of any specific organizations that someone could use to find funding.
Rend Al-Mondhiry - She was also not aware of any specific industries that you could turn to for financial help, and she points out the stance from the FDA could be one reason why it’s hard to find funding currently.
Marielle Weintraub - She brought up the Foundation for Food and Agriculture Research, which she stated was started around 2014. If you look at who they are partnering with, why they are making these partnerships, she believes this industry could be one place small businesses could turn to for help. While she wasn’t positive if this organization was best for everyone, she also thought reaching out to all the different trade associations would also be beneficial to finding financial help.
Seventh Question - Regulations in Hemp - Can you give us a 1000 foot overview of agencies that regulate Hemp and where we stand?
Rend Al-Mondhiry - She gives a very detailed answer on this question - The USDA is responsible for regulating Hemp growth & the plant itself. But, once it’s out of the ground, other agencies could then be in charge. If your ingredient will be used in food, you should be thinking about FDA regulation.
The FDA is generally responsible for what you put in the products, like ingredients, how you manufacture it, the labeling, and the claims around it.
The federal trade commission (FTC) is a law enforcement agency, unlike the FDA. So, the consequences for not falling within their guidelines can be more expensive & more resource intensive. They are responsible for making sure any claims are truthful, accurate, and supported by appropriate evidence. If you’re making a health claim, then you’ll need scientific evidence to make that claim, like a medical trial. These trials have not really been done on a widespread basis in this industry right now.
The FTC is not thought about a lot in regards to regulating CBD, but they are just as important as the FDA when it comes to regulating CBD. Because of their labeling enforcement, and their classification as an actual law enforcement agency, the FTC is not to be taken lightly when it comes to regulation.
The final agency to consider is the Custom & Border Protection Agency.. Even though Hemp is federally legal, she has experienced some issues with suppliers who are importing a Full Spectrum Hemp product with customs.
Eighth Question - Common Regulatory Issues - What are the issues you or your peers are facing most often when facing regulatory bodies?
Tonya Lewis - Ensuring you have met state & federal agencies with your THC threshold and your labeling are important to make sure you’re meeting all regulations. Keeping things like soil tests from your farmers are critical to ensuring your final hemp extract meets the appropriate standards.
Other suggestions were registering your business with the state, keeping appropriate records, and not growing more Hemp than what you’re legally allowed to sell are other good practices to keep.
Marielle Weintraub - She reminds everyone to not be the low-hanging fruit. What she means by this is you should access the FDA & FTC warning letters that are on their site, and by reading these warning letters you can learn what they are getting in trouble for, and learn from these mistakes.
If the FDA or FTC is coming after you, you probably either labeled a product incorrectly, or made a claim. Understanding what these federal agencies are looking for should be easy because this information is made available to the public.
But, state-to-state regulations could be a big issue. Understanding where your risks really are, and who you can trust in this industry are important to avoiding intervention from these federal regulatory bodies.
She also mentions the U.S. Hemp Authority™ Seal, meaning that this seal should fall in line with what federal regulatory bodies are looking for, so this could help you avoid legal troubles.
Ron Conyea - The FDA is the elephant in the room for farmers. The wait on the FDA has been a huge problem for farmers. There are so many products that are being sold in this country that are not safe, and it’s very frustrating to wait on the FDA because it hurts the industry so much. And, until they get busy doing something about it, it can be financially dangerous getting into the Hemp industry right now.
Key Takeaways From The Cultivating Entrepreneurship Webinar
Now that you’ve read our little transcript of the webinar, we want to give you our opinion on everything discussed today.
First off, this group of panelists were amazing. You could really tell they are a part of the Hemp community, each person brought their own area of expertise, and the information discussed was all very helpful.
The key theme throughout the webinar seemed to be around regulation. They discussed regulatory bodies, what their enforcement is like, how to avoid getting in trouble with these agencies, and how expensive it could be if you do fall under their purview.
Mentioning the role the FTC plays in this regulation was a big takeaway for us from this webinar. They are an actual law enforcement agency, which can lead to serious issues if a company doesn’t follow their guidelines. And, while we’ve given the FDA a hard-time in the past, the FTC certainly hasn’t done all it can to help regulate bad actors in this space.
While the theme was centered on regulation, we also liked how there was a discussion of financial issues centered around Hemp. Because this crop is newly legal, there are a lot of major banks, insurance companies, and venture capital funding that is limited because of the gray area around legalization.
It seems like we all know this industry will be fully legalized & booming shortly, we’re just experiencing the growing pains of a new industry now. While this crop should have been legalized decades ago, this is the price we’re paying for the 100 year long war this country has had on Cannabis.
So, these 5 amazing panelists discussed Hemp regulation, Hemp funding, supply chain issues in Hemp, and other issues that everyone involved in the Hemp space are far too familiar with.
We learned a lot by watching this webinar and breaking it down, and we’re very hopeful they continue doing these.
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