Business Solutions
Exploring CBD
CBD products represent a key market opportunity for providers of pain management offerings, but it represents completely new territory. How do HME businesses move into the CBD market?
- By David Kopf
- May 01, 2019
Many HME businesses are very familiar with the opportunities offered by pain management. A wide variety of their existing patients suffer pain management issues, and there are a variety of products — compression items, wraps, hot/cold therapy, or TENS units — that they can offer to their clients to address their pain and discomfort.
And, like any other HME category, smart pain management providers are regularly hunting for ways to broaden their revenues. The latest offering: CBD.
However, CBD isn’t like previous pain management products, and many providers aren’t sure how to proceed, given that it is new; it is related to cannabis; it’s not hard equipment; and the laws related to CBD vary from state to state.
Let’s start by defining what CBD is. CBD is one of the compounds called cannabinoids that are produced by the cannabis plant. The first cannabinoid most everyone has heard of is THC, the psychoactive component in recreational marijuana. CBD, also known as cannabidiol, is the cannabinoid often used in managing chronic pain, insomnia and anxiety.
CBD products are sold in varying dosages that might or might not contain very small percentages of THC, as well. The products range from tinctures taken under the tongue, capsules, gummies and lotions. Consumers can buy them online and, depending on what state a person lives in, they can buy it at retail establishments.
ASSESSING THE CBD MARKET
While providers might be inspecting the edge of the market, it might be akin to surveying the foothills next to a mountain range. CBD has grown widespread. according to market researchers the Brightfield Group, the global CBD market could expand to $22 billion by 2022. Another study from Cowen and Company projects the CBD market to hit roughly $16 billion by 2025. Low or high, those estimates speak to considerable market demand.
“CBD is on an unbelievable growth trajectory,” says Laura Baldwin Fuentes, R.Ph, co-founder and CEO of Green Roads. “Consumers from all walks of life are increasingly seeking out CBD products because they hear about the benefits from news reports, and get first-hand testimonials from friends and family members. This growth is only predicted to accelerate.”
“There’s such a growing interest market, because the product itself has so many benefits that it could definitely bring additional cash flow and new business and return business …,” says Victor Velazco, CBD advocate for Oliver’s Harvest (oliversharvest.com) which is produced by Coast to Coast Natural Inc.
“Everywhere you look, people are talking about it or they’re a company that’s selling it,” notes Jon Fedele, CEO and owner, PurWell LLC (purwell.com). “I just had a conversation with a Physician two days ago who said that he has, at minimum, four or five patients every day that ask him about CBD. He’s just a General Practitioner.
“So it’s a growing market. I think there’s a great opportunity for DMEs and pharmacies alike,” Fedele continues. “I think they’re poised to succeed in this market for several reasons, but most importantly because their customers know and trust their healthcare advice. They look to them to advise them on products that are going to help with their overall health and wellness.”
In terms of which patients can benefit from CBD, Fuentes says the products potentially apply to, well, everyone.
“Every human has an Endocannabinoid System which plays an important role in many brain and body functions,” she explains. “CBD supports this system, which helps keep your body in balance and is important for optimal health. So the short answer is that every person can benefit from the use of CBD products.
“We have consumers of all demographics and ages utilizing our products for various personal reasons,” Fuentes continues. “With so many different ways to use CBD ± topical, sublingual, etc. — we see people from all walks of life using CBD daily: Moms, athletes, seniors, professionals, millennials, etc. — really anyone focused on maintaining optimal health is utilizing CBD products to accomplish their goals.”
Needless to say, that’s incredible market potential. That said, it’s a market that has sat in an uncertain legal landscape for several years. The Department of Justice and the Drug Enforcement Agency considered any part of cannabis — and that includes CBD — a narcotic, but they have not enforced any laws when it comes to what is called “industrial hemp” products that include less than 0.3 percent THC, which covers most CBD products. As a result, many farmers and others further down the CBD economy have been reticent to participate in the business — until now.
CBD FROM A LEGAL PERSPECTIVE
The 2018 Farm Bill, which was passed at the very end of the 115th Congress in late December, removed industrial hemp production from the Controlled Substances Act. This gives Federal protection to both hemp farmers and CBD sellers.
That said there are still state statutes. In the 10 states where cannabis is entirely legal for medicinal and recreational use — Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont, and Washington — it is clearly legal to sell and use CBD oil, according to CBD producer Green Roads. And, in the three states that legally prohibit all cannabis-derived products — Idaho, Nebraska, and South Dakota — CBD sales remain illegal.
In addition to those states, there are 23 additional states that allow medical marijuana, including CBD. The remaining 14 states have more nuanced or narrow limitations on the sales and use of CBD or medical marijuana. Both Green Roads and the National Organization for the Reform of Marijuana Laws provide useful state-by-state resources on their web sites, greenroadsworld.com and norml.org.
So, what’s a provider interested in CBD to do? How do they make sure they’re above board?
“I would say is, the best advice for [providers] considering the sale of hemp/CBD products would be to consult with an attorney on the laws specific to their state,” Fedele says. “There are several prominent attorney firms that only do cannabis, marijuana, cannabis, hemp related legal advice and oversight.”
UNDERSTANDING CBD PRODUCT
Another issue is quality control. Providers that are interested in offering CBD need to get educated on not just CBD, but the ways CBD is manufactured.
Right now, there is not a lot of standardization. According to Jamila Mammadova, a researcher for Coast to Coast, the Federal Drug Administration does not currently do product testing, but has formative rules on CBD products that it is preparing to detail and enforce. In the meantime, retailers want to make sure that products meet their criteria, such as ensuring that the THC component is below 0.3 percent. After that they need to research vendors.
“Another thing is you want to show that there are no heavy metals, there is no microbial life and any other toxins in your extract,” she says. “Companies typically will, just privately, offer third-party lab reports and show it to consumers to guarantee that the concentration is accurate and that the extract is high quality.
“… One of the things I would recommend them to do is to use broad spectrum hemp extract with less than 0.3 percent THC or zero percent,” Mammadova continues. “The first option would be full spectrum and the second option is broad spectrum.”
Mammadova says that rather than just seek a high dosage isolate, it is better to have the full and broad spectrum varieties, because those products contain other chemicals found in the plant that work together with the CBD to increase its efficacy.
“We call that ‘entourage effect’ and it’s not just double; it actually grows exponentially,” she explains. “And there are so many studies that demonstrate that. Once you have full spectrum and broad spectrum, these chemicals start to interact with each other and they work synergistically. The result is much stronger.”
EDUCATING PATIENTS AND STAFF
Another thing to keep in mind is making sure that both clients and staff have the right understanding about CBD in terms of options, benefits and use. In that regard, Greenroads’s Fuentes underscores that providers need to implement effective external marketing messages and internal education programs to educate customers and staff, respectively.
“It’s important to lead with education when it comes to introducing CBD to your customers,” she says, adding that vendors can help in this effort. “At Green Roads we have marketing material and in-store support for almost every product. We utilize these materials to educate about CBD and the Endocannabinoid System, not just to push products. For our new business clients, we do provide a promotional marketing package to immediately engage customers.”
On the staff side, Fuentes says that it is vital to make sure that staff fully understands what CBD is, where it comes from, how it works and how it could help consumers. Here again, vendors can help.
“We provide a ‘CBD 101’ deck that includes facts and data to educate and provide product information so that your staff will feel comfortable talking about CBD and the individual products we have available,” she says. “In addition, our sales advisors are ready to guide their clients as they get started. It’s tempting for [providers] to try to ‘self-educate’ using the Internet for your resource. Unfortunately, there is a tremendous amount of incorrect information out there so it’s important to find a trusted source when learning about CBD and CBD products.”
So what’s the net-net of all this? It should be glaringly apparent to any HME provider business that there is a clear market opportunity with immediate demand, and that while it is an evolving landscape both in terms of regulation and market factors, it is probably safe to say that CBD is evolving much faster than many providers realize. The key is for smart HME professionals to tap into legal resources to ensure they comply with state and Federal requirements, and do their homework on the product side to ensure they are stocking quality items, and get started so that they can stake out some territory in this important new segment.
This article originally appeared in the May 2019 issue of HME Business.