IOTO will leverage its experience in tobacco to serve the hemp industry (Photo courtesy of IOTO)
IOTO International, a U.S. and Brazil-based manufacturer of homogenized wrapper, cut filler and binder, has expanded its Yerba Mate, Chamomile and other herbal homogenized sheet offerings to include premium reconstituted hemp sheet.
Utilizing qualified and tested hemp flower, leaf or stem supplied by customers (or directly sourced locally by IOTO), the company is now able to offer customized manufacture of hemp sheet to the specific herbal content requirements of its clients.
“Demand for hemp smoking wrappers in the USA has increased exponentially over the last two years as brand developers have brought novel hemp cigarettes, cigars, hemp wrappers and hemp cones to the market,” said Helder Tullio, director of operations at IOTO, in a statement.
“Unfortunately, the majority of the hemp wrap available today is generic and not crafted to meet the specific smoking qualities required by brand owners.
At IOTO, we are set up to run both small-scale and high-volume production, and we are able to meet the specific formulation needs of the client.
We can help make smaller brands more viable and give them real points of differentiation.
“Given our scaled manufacturing approach, we can work with smaller initial production runs and ultimately grow with brand owners as sales volumes expand. In effect, we can help make smaller brands more viable and give them real points of differentiation from the generic hemp wrapper offerings that are in the market today.
“The IOTO hemp wrapper is a highly durable hemp sheet, and we believe our manufacturing process gives us a distinct edge over competitors and delivers a superior quality hemp sheet for clients. In addition, IOTO’s capabilities in flavor development also helps our customers meet their targeted taste profile requirements when making flavored hemp sheet.”
The Covid-19 pandemic slowed the regulatory process in 2020, creating an expected uptick in 2021.
By Chris Howard, special to VV
After CBD’s explosive growth in 2019 following the passage of the 2018 Farm Bill that legalized hemp, 2020 began navigation of a regulatory environment in flux. Burgeoning federal and state regulation, as well as increased research into consumer trends and tastes, begins outlining the future of CBD.
The Covid-19 pandemic slowed progress in the U.S. Food and Drug Administration’s (FDA) decision making around CBD, setting up 2021 as a crucial year for the industry, although it is unlikely that any FDA regulations will be finalized this year. Vapor industry veterans, who witnessed the regulatory battles with the FDA, are rightfully wary of the government’s efforts to oversee CBD, but the initial steps seem promising. It is still early days for the CBD industry, and the FDA appears willing to collaborate with the industry on many issues that are important to manufacturers and retailers alike.
As we look ahead, I offer some thoughts on the current CBD market, where regulatory efforts are and finally, what to expect as the CBD space matures.
State of the market
After CBD’s rise to prominence in 2019, last year represented more incremental growth. According to the Brightfield Group, a leading cannabis and CBD market research provider, the United States CBD market grew from $627 million in 2018 to over $4 billion in 2019, an increase of over 650 percent. In 2020, market growth slowed to 14 percent as CBD could be found in more stores and additional uncertainty caused retailers to tread carefully. Despite this recent modest growth, the Brightfield Group projects the CBD market will continue to grow from $4.7 billion in 2020 to nearly $15 billion by 2024.
Driving this growth is a mixture of increased consumer awareness and interest as well as improved access. Sales continue to increase in key market areas, especially e-commerce, creating more competition for CBD specialty stores and vape shops selling these products. C-stores were previously well positioned to capitalize on the market, but research from Technomic, a management consulting company, shows that consumers are being selective where they shop to better hand-pick CBD products.
Chris Howard
Consumer form factor preference (the types of products available containing CBD) has been another important area of analysis. Tinctures remain popular, especially with new CBD users. Lotions have become a huge source of interest for consumers with many over-the-counter topical, beauty and skin care companies investing heavily in these products. Refining offerings will be a key part of crafting common sense regulation and helping CBD companies make more confident investments in their product lines.
Regulations in 2021
It is no surprise that the FDA took significant interest in CBD as it quickly grew from an industry valued in the hundreds of millions to one worth billions. Yet, the agency has been slow to definitively rule on any regulations apart from taking a firm stance against companies making therapeutic or health claims, especially during the pandemic.
Where does that leave us now? The FDA’s studies into CBD are ongoing, both analyzing the effects of the compound as well as auditing the contents of current products, although progress has slowed due to Covid-19. Meanwhile, there remains some pressure from congress to create policy around CBD to act as a stopgap while the FDA creates long-term guidance.
I remain optimistic that the FDA will introduce a framework for the specific purpose of regulating products containing CBD that permits the marketing and sale of all form factors in the U.S. This includes food and dietary supplements, a source of much back and forth between CBD advocates and regulators. That said, it is unlikely that a rule will be finalized in 2021. I expect this to be subject to a lot of discussion this year. We will find out more based on how the Biden administration addresses CBD in the year ahead.
In the meantime, CBD companies are forced to navigate a labyrinth of state-by-state regulations. CSP and Grocery Business research indicates 46 states have created CBD laws. State laws can run directly counter to existing federal guidelines, such as those concerning food and beverage products—which are prohibited federally but which are permissible for sale within some states. The patchwork created by these various regulations continues to make national distribution of CBD products a challenge and in some cases even threatens the supply chain of hemp growers and manufacturers.
Looking ahead
While we await final FDA guidance on CBD, I see companies in this industry dealing with many of the same issues we’ve seen over the years in the vapor industry.
The cost of entry for many in the space will become increasingly burdensome once the FDA begins setting regulations, forcing many smaller CBD companies to exit the market. This is similar to what we have seen with PMTAs in vapor, where the larger companies have been far more well equipped to maintain a compliant product selection.
Although it has not been a concern yet, CBD companies should remain mindful and vigilant to ensure that they are taking the necessary steps to prevent youth use of CBD products. Taking a proactive stance now and preventing youth use will help avoid many of the issues faced by the vapor category over the past two years.
Although there are many complex considerations with CBD, it is hard not to get excited about this industry’s future. With continued strong market growth and an apparent pathway to sensible regulation from the FDA for sellers and consumers alike, the future remains bright. In 2021, I hope to see more progress from regulators as we continue to create a strong framework that will work to the benefit this industry and consumers for years to come.
Chris Howard is vice president, general counsel and chief compliance officer for E-Alternative Solutions.
Cannabis vaping needed a full-service hardware manufacturer with products designed for CBD and THC oils.
By Timothy S. Donahue
When the cannabis industry began to take off in the U.S., vaping became a popular way to consume cannabinoids. However, many of the devices used to vape nicotine products did not work as well with the more viscous cannabinoid oils, especially THC and cannabidiol (CBD). There was a massive need for high quality vaping products that were specific to the fast-growing cannabis industry.
The Blinc Group started in 2017 to provide industry-specific vaping hardware to cannabis companies in Canada, the U.S. and Europe, according to co-founder and CEO Arnaud Dumas de Rauly. The company offers off-the-shelf products that can be fully customized and creates bespoke products. Dumas de Rauly says Blinc Group isn’t a cannabis company; it’s a technology company that serves the cannabis industry. Blinc Group provides every level of service from product design and customization to compliance testing, manufacturing, shipping and logistics.
When the legal cannabis industry began to grow and more states legalized marijuana in some form, it wanted to separate itself from the nicotine vaping industry. There was little crossover between products. To Dumas de Rauly, who honed his skills in nicotine vaping hardware, it was baffling that no one was applying the knowledge gained in nicotine vaping to cannabinoids. He says that the cannabis industry today is in the same situation the nicotine vaping industry was in two or three years ago.
Arnaud Dumas de Rauly / Credit: The Blinc Group
“It’s becoming more accepted by regulators, by the general public. However, I can see the cannabis industry making some of the same mistakes that nicotine vaping had made … such as marketing to kids. That is going to bite our industry in the ass over the next couple of years, especially when all of this becomes federally legal,” said Dumas de Rauly. “We’re going to be really frowned upon if we are using cartoons on our packaging, if we don’t use proper standards.”
In regulatory matters, the cannabis industry was trying to reinvent the wheel. Instead of using manufacturing standards and regulation that had been developed in electronic nicotine-delivery systems (ENDS), the cannabis industry wanted to create its own standards. When the industry started developing its own way of analyzing product emissions, Dumas de Rauly said he had had enough.
“We already have these standards in nicotine vaping. We can already use that basis and then just add some components we’ll be testing for that are specific to the terpenes that are specific to more viscous extracts, that are specific to cannabinoids. We already have a base,” he explains. “Radioactive components, for example. It’s something that seems logical. It’s in the nicotine vaping standards. We’ve got to make sure that there are no radioactive materials in there. That’s very easy. You just translate over to cannabis. Why the heck won’t we do it? Testing for aldehydes, heavy metals is stuff we’ve already been doing in nicotine vaping for years.”
Be on the Blinc
The same couldn’t be said for the hardware. While standards and regulation could be carried over from the nicotine vaping industry, hardware needed to be specific to cannabis. Eric Newman, director of sales for Blinc Group, says the THC industry in the beginning used hardware designed for nicotine but soon shifted to specific cannabis vaping products. Newman said to get the cannabis industry comfortable developing its own hardware was an educational experience.
Credit: The Blinc Group
“Different clouds work well with different types of products. Customer experience is something that we take seriously. For us, it was coming from a product perspective and a knowledge and educational perspective as well. We needed to teach the end user that one device or one product is better than the other and why they should use one product over another.”
Newman says that more companies are moving toward open systems and that is expected to continue moving forward. He said that Blinc Group is dedicated to passing along its knowledge across all stakeholders and getting more people talking about best practices and standard operating procedures [SOPs]. “I think it’s education first then proving that what you’re educating actually works,” says Newman. “Then you open up the network to the masses.”
A good example of a hardware change to accommodate cannabis products is the move away from poly-type or plastic cartridges, according to Newman. He says Blinc Group now uses strictly glass cartridges.
“The whole market hasn’t switched to that model, and we’re pushing the market into, from a quality and safety perspective, going to all-glass type cartridges,” he says. “The next step to that process is actually happening already. We’re making full ceramic cartridges, making full glass cartridges. Except for the inner components that still have to have some metal and ceramic cores—but it’s happening in front of us where we’re seeing those type of products. Unfortunately, Blinc Group hasn’t found any that fit our model, but there’s certainly a revolution happening already, and I think Blinc Group’s ahead of the curve on it.”
Dumas de Rauly attributes much of the Blinc Group’s success to the emphasis it placed on safety and compliance throughout the EVALI crisis of 2019 and the Covid-19 pandemic. Even outside investors are starting to notice. In early January, Blinc Group successfully raised $1.5 million in bridge funding.
“Our team navigated 2019’s vape crisis helping set standards and advise regulators on testing and compliance, and last year, the company saw our best quarter yet amid the Covid-19 pandemic as the industry learned the benefits of safety and traceability,” said Dumas de Rauly. “We have shown that we are a resilient company that puts consumers first, which has made all the difference.”
In just over a year, Dumas de Rauly and his two partners managed to turn their company into a business generating approximately $1 million in revenue, adding an additional five team members in the process. By 2019, the company was grossing over $4 million in revenue and had 15 employees. In 2020, Blinc Group more than tripled its orders with more than 330 percent year-over-year growth.
The technology company seemed to have a knack for expanding in an increasingly difficult regulatory landscape. “I don’t have the exact numbers yet, but I know in terms of sales orders, we hit $14.2 million in 2020,” said Dumas de Rauly. “We have increased our team to 21 members, and we are really excited about our future in this unique and exciting industry.”
Blinc of an eye
The Blinc Group specializes in standards and quality. The company was created to help the cannabis industry comply with Canada’s robust regulatory requirements through the highest quality testing and supply chain standards. Canada legalized recreational marijuana in 2017.
Dumas de Rauly and his two Blinc Group co-founders, Givi Topchishvili and Alexander “Sasha” Aksenov, who also serves as chief innovation officer, had the collective experience needed to change nearly every aspect of how the cannabis industry was operating, from standards and other regulatory needs to lobbying, manufacturing and even sales. Topchishvili is an entrepreneur, investor and author with 30 years of market entry experience in Europe, Asia and the U.S. Aksenov has been in the cannabis vaping industry for more than seven years. He has created several ventures ranging from branding studios, record labels and media management companies to marketing agencies.
Dumas de Rauly is the scientist. He currently chairs the ISO (International) Standards Committee TC126/SC3 on Vaping Products and the CEN (European) Standards Committee TC437 on Vapor Products. He is also a member of the informal Marijuana Science and Policy Work Group managed by the Colorado Department of Revenue’s Marijuana Enforcement Division and Colorado Department of Public Health and Environment. Dumas de Rauly is also the former president of FIVAPE, the French vaping trade federation, and now serves as the organization’s secretary-general for international relations.
“As chairman of ISO standards on vaping products, I was getting a lot of friends that were coming up to me and asking me what I thought of their vaping products. And when I looked at them, I quickly saw that the products they were using were not adapted to the format of the [cannabis] extract, which is very, very viscous, oily, in some cases, really like molasses,” explains Dumas de Rauly. “I got concerned about the safety issues, started looking into it and … my partners and I decided to create the Blinc Group to bring the wealth of experience we had in nicotine vaping over to the cannabis industry.”
What sets Blinc Group apart from other cannabis industry hardware manufacturers is its involvement in every aspect of the process, from design to sales—what Dumas de Rauly calls “enterprise solutions” or consultative sales. The company doesn’t do sales on a traditional transactional basis. Every Blinc team member gets involved. “We can move along the entire vaping value chain. We have done product formulations for clients; we go through automation with filling and capping SOPs all the way down to point of sale and training,” says Dumas de Rauly. “We train our clients’ salespeople on specific hardware. We really insert ourselves throughout the entire value chain of vaping products in cannabis.”
Eric Newman
The Blinc Group may be the only cannabis industry vaping hardware manufacturer that controls its entire supply chain. This is important because when a manufacturer orders from a factory in Shenzhen, China, where most vapor hardware is produced, that company has no clue where the raw material is sourced. The factory knows but not the client. Blinc Group sources the raw material suppliers. It then tells the subcontracted factory that those factories need to use the Blinc-sourced suppliers.
“We have an entire audit trail of every single material that comes into the device. That is one very important [differentiator] and one of our biggest differentiators. It also allows us more resiliency and redundancy within our supply chain because we’re not buying just from one factory,” Dumas de Rauly says. “We have four different manufacturers we work with—or assemblers, as we call them because they don’t really manufacture. They assemble products. And when one of them is not available, we can have the same product manufactured by another one because we own all of that supply chain.”
Blinc and you’ll miss it
There is one fundamental reason for controlling the supply chain: safety. Alongside innovation, quality and integrity, Dumas de Rauly says safety is part of Blinc Group’s foundation. It’s the company’s main focus in advocacy as well. For example, recently, the company worked with the U.S. state of Colorado to implement emissions testing in vapor products.
“[Colorado is] the first state in the U.S. that is requiring emissions testing, but that just goes to show that we’re even willing to put barriers in front of our business to make sure the consumer is safe. We have pioneered the use of medical-grade stainless steel in the products instead of using the regular H59 material to avoid any leaching of lead,” Dumas de Rauly explains. “We push our analysis and the control of the supply chain specifically for these reasons. Another example: In a typical 510-threaded cartridge, you have all of the materials that come into contact with the oil inside. Each one of those materials is sent off from each supplier—and we have four suppliers for each material—to undergo testing in an international lab. And given what we find, we adjust that material to make sure that individually, every single piece one of our cartridges will not leach, for example, heavy metals.”
Blinc Group has a large presence in Canada specifically because of the company’s compliance and regulatory stance, according to Dumas de Rauly. He expects the U.S. to adopt a similar type of regulatory framework soon. “People have already started understanding the need for regulations since the EVALI vaping crisis,” he said. “I’m very confident that this year, we’re going to be focusing a lot of our attention on the U.S. market and growing our U.S. presence.”
After Canada legalized recreational marijuana, the country passed the Cannabis Act. It includes some of the most stringent rules for cannabis on compliance and regulation in the world. Batteries, for example, need to be UL 8139 certified. In the U.S., it’s only a recommendation. The certification costs a little more, and the UL process could take anywhere from three-month to six-months, says Dumas de Rauly, but it’s necessary to protect the end user.
“We were the only ones attacking that market with UL-certified products in terms of batteries. We were the only one attacking that market with FDA, CFR21 or CPG21 certifications for our raw material. That was our edge, and that’s why we made such a big impact in Canada in 2020,” says Dumas de Rauly. “As regulation is becoming a little more stringent in the U.S. and after the EVALI scare, those consumers are starting to understand that they need to be paying attention to what’s in the vaping hardware.”
Blinc Group virtual meeting
As EVALI soared in the U.S., many believed the vaping industry was dead and the disposable option was a fad. Dumas de Rauly says that, in reality, cannabis accounts for more than 30 percent of the market in some states. Some states with legal medical marijuana allow only the sale of THC vaporizers. This is because contents and strength can be easily regulated in a vaping product. The same is not true for cannabis flower products. He sees the industry growing even more rapidly in the U.S., especially if marijuana is legalized on a federal level.
“The road is going to be bumpy. There is going to be more regulation. We are pushing for more regulation because we want to make sure that our business is sustainable over the next five to 10 years,” he says. “We don’t want to see what happened to nicotine vaping happen to cannabis vaping. We’re really pushing for good stewardship for the industry. We are thought leaders in the space, and we want to be at the forefront of education and making sure that consumers get safe products.”
As the legal cannabis market grows in the U.S., Dumas de Rauly says that the Blinc Group will be growing and continuing to grab more market share as well. He says that the Blinc process is highly developed. It runs like a well-oiled machine. “We have a very strong team,” says Dumas de Rauly. “We have a strong presence. Our processes are well refined. I believe we’re going to be doing very, very good this year.”
Solari Hemp is a Colorado-based fully integrated farm-to-shelf supplier of THC-free CBD products.
By Timothy S. Donahue
Cannabidiol (CBD) is one of the fastest-growing industries on the planet. It’s motivated by the ever-growing popularity of the supplements on the global market. However, according to a Consumer Brands Association (CBA) survey, nearly four in 10 Americans incorrectly assume CBD is just another name for marijuana. The survey also found that consumers said that the quality and safety of the product were extremely important when making a CBD purchasing decision.
Solari Hemp, founded in 2018 in Longmont, Colorado, USA, is a fully integrated farm-to-shelf hemp company with on-premises growing, extracting, shipping and sales/marketing capabilities. The company sells only 100 percent THC-free CBD products. Solari Hemp maintains full control over the production/development process of its products from start to finish, according to Colin Gallagher, co-founder and CEO of Solari Hemp.
“For us, it’s about being a company that has roots in the C-store industry and understands the needs and complexities of operating with products that are in a regulatory gray area,” he says. “We want our partners to trust the team behind Solari and the people behind it; trust the brand and the quality of the product you’re getting. We test all the way through seed to shelf. We offer transparency in the testing. We are doing things the right way. It’s about being good retail partners. Our success is their success.”
Colin Gallagher / Credit: Solari Hemp
Solari means “land exposed to the sun” in Italian. As a child’s name, it can be translated to “beauty greater than the sun.” Gallagher says he and his team wanted to create a packaging design that didn’t have the in-your-face marijuana branding often associated with such products or that could be misconstrued as a pharmaceutical product. The sun became the logo. It even has a little hidden “S” in the middle.
Gallagher says he was working at Smoker Friendly International, and the CBD market was just starting to grow. The company decided it wanted to start carrying a CBD brand in its stores. Gallagher soon discovered that there was little transparency throughout the CBD supply chain, and many manufacturers could not guarantee consistent quality in their products. No product could meet the quality standards and quantities he needed. Gallagher wanted to do it better. He soon started talking with two industry colleagues and discovered they had similar ideas about what a CBD brand needs to be successful.
“We decided that we could all work together and create a new company … use our experience, our trust and established relationships within the C-store industry to create a brand and a product that had a full chain of custody from seed to shelf,” he says. “We decided to just get out there and do it ourselves.”
There is a lot of talent on the Solari team. Myorr Janha, co-founder and chief marketing officer, was previously responsible for global marketing, corporate communications and business development initiatives for Rush Communications and Simmons Design Group. With over 25 years of marketing experience managing a variety of brands spanning diverse sectors in entertainment, lifestyle and philanthropy, Janhaeads Solari’s marketing, advertising and PR strategy.
Jake Salazar, co-founder and Solari’s chief development officer, is a fifth-generation Colorado native. He was named one of the 100 most influential people in the cannabis industry by High Times magazine in 2018 and 2019 for his accomplishments over the past 12 years in cannabis genetics and the hemp business. Salazar heads genetics R&D and business development for Solari. He also helped craft the original legislation to legalize marijuana in Colorado.
Gallagher oversees the daily operations of the company. He grew up around consumer product goods and convenience retail operations and previously served as the director of operations and business development for Smoker Friendly.
Back to the farm
While many things stand out about Solari, its farming operation is the foundation of the company. In 2017 and 2018, the CBD market was experiencing shortages of wholesale CBD. Gallagher didn’t want to go through the process of creating a product and launching a product only to have a supply shortage and not be able to support sales. That’s when the company started looking for its own farms.
“We found some farmers who had farmed hemp from early 2014 and then got out of it. They’re traditional, fourth-generation Colorado farmers. We brought them in as equity partners. We really wanted to learn about the product and be leaders in the industry,” explained Gallagher. “There’s still a lot of education that needs to happen in terms of just understanding hemp [compared to marijuana]. We are trying to be a leader in the market and do things the right way, our way, and have full transparency.”
The Solari team began its first farm on just three acres to test its product. In 2018, Solari farmed 150 acres (about 6,000 plants) and continues to have the ability to expand. Like many hemp farmers, Solari did not farm in 2020 because there was an excess of hemp biomass in the market due to the Covid-19 pandemic. The company needed to step back. It was about survival.
“The pandemic put a damper on sales. We know a lot of farmers and extractors who went out of business. There are high capital costs in the extraction process, and you have to have high-yielding crops. The higher your CBD potency, the better your yields. It’s all about efficiencies and that effectively impacts your cost of goods sold,” says Gallagher, adding that farming is also expensive. “Farming is challenging. The harvesting technology, drying technology—especially when you have a large crop. You need to get it out of the ground and get it dried and ready for extraction so it doesn’t go bad.”
Hemp is like a vacuum cleaner, absorbing all that a soil has to offer, both good and bad. Gallagher says that heavy metals and pesticides on the plant or in the soil may be present in the resulting oil after the hemp is refined. The only way to avoid exposure to these contaminants is to know exactly where the hemp is grown. Solari’s seed-to-shelf process ensures its hemp adheres to the company’s high-quality standards. “Our crops are grown on our farms in Colorado without the use of any pesticides and our soil is consistently tested for heavy metals,” says Gallagher. “A reputable brand should always disclose the location [in which] the hemp was grown so a consumer has full disclosure prior to purchasing the product.”
To isolate the CBD-rich oil from the hemp plant, a multistep extraction process is used to remove fats, lipids, cannabinoids and terpenes. Different extraction methods can provide a variety of advantages; however, testing after extraction for pesticides, heavy metals and residual solvents that can be present during the extraction process is vital. “Extraction is just dialing in the equipment to get the highest yields from the crude. We consistently test all of our final products to ensure there are no harmful chemicals or contaminants present within its extracts before it is sent to a third party to be tested again,” says Gallagher. “We control the entire process. Our retail partners, and consumers too, like having that transparency. It gives us an advantage in the market because it’s a product you can trust and there’s traceability. We do third-party testing to ensure consistency and quality. We also use a CBD isolate that guarantees we have absolutely no THC in our products.”
Empire of the sun
Today, the Solari line of products is sold in 2,000 stores to 3,000 stores, including Smoker Friendly, Rutter’s Farms, Town Pump, Food Lion and numerous independent C-stores. The company offers 23 SKUs, including gummies, tinctures, soft gels and topicals (balms, roll-ons and creams).
Credit: Solari Hemp
Gallagher says that launching a brand at the end of 2019 going into 2020 was greatly impacted by the Covid-19 pandemic. In the C-store channel, it’s about face-to-face meetings, building trust in each other and building trust in the product, according to Gallagher. He says that not being able to fully develop those relationships and not being able to go to trade shows and sample the products was a nightmare.
“It was a challenge, for sure. But we adapted. For us, it is more about just being able to be fully transparent and able to deliver a high-quality but affordable product. That’s another one of our big things: affordability. In the C-stores, we don’t [expect people] to come in and pay $50, $60 for a tincture,” explains Gallagher. “It’s something that’s kind of a grab-and-go item, so our lowest-priced item is $6.99. Then it’s supporting the brand, supporting the retailer and understanding their business, and working with them to make the product successful. I think this dedication to the retailer separates us from the pack. It’s about those relationships and doing things the right way and not creating more work for our partners.”
Moving forward, Gallagher says Solari must remain innovative, whether it’s a function of product or delivery. He says the company is currently working on some new products that are expected to come on the market this year. There is so much competition in the CBD industry that Gallagher says you have to think outside the box to survive. He says that CBD beverages, for example, are a fast-growing CBD segment, and that could potentially be part of Solari’s portfolio.
“We see a huge future for the beverage industry, and that’s on our radar. If you’re going to release a new product, it’s got to be something that grabs people’s attention. I mean, at the end of the day, your product has to work, right?” Gallagher asks. “People have to believe in the product itself and then it needs to be different. If you take something that’s like a pull on the cap of a beverage and you push it down and shake it up, that’s different, right? We are trying to be innovative and thinking about things that aren’t currently on the market.”
Regulations are also coming soon for the CBD market in the U.S. The FDA has already announced proposals for the industry. Today, most CBD products are manufactured by smaller companies, and, absent consistent regulation, it is up to the individual businesses to invest in the research that protects consumers. Gallagher says he wants to see responsible regulation, and the industry needs to help decide what those regulations may entail.
“I don’t think it’ll be like the PMTAs [premarket tobacco product applications] the FDA uses with tobacco and vapor. We need input from the industry to get things done the right way. Part of that is keeping the bad actors out,” says Gallagher. “I think this administration will certainly be more friendly to cannabis in general [than it was toward tobacco and e-cigarettes]. I think there will be more regulation on the smokable side, meaning it’s something that you inhale. Anything that is like a tobacco product and used in a similar fashion and is not currently taxed … will be regulated.”
For Solari, the company remains focused on continuing to being an innovator in the industry, focused on becoming a household name. “We want to be a recognizable label,” says Gallagher. “We want Solari to be the brand that people associate with quality and trust. That’s something that will never change.”
ReStalk, Inc has entered into a licensing agreement with Sustainable Fiber Technologies (SFT) enabling the company to utilize the SFT’s suite of IP to process hemp into cellulose pulp and biopolymers. These polymers are used to make vapor product packaging, among many other items.
Credit: ReStalk
The partnership allows SFT to assist ReStalk in the developing hemp-based pulp and board products. “ReStalk is an excellent company with the foresight into both the paper and packaging arena. Their team and expertise of hemp cultivars makes ReStalk a perfect licensee for the Phoenix Process,” said Mark Lewis CEO of SFT. “Domestically, the demand for hemp pulp has never been higher, it provides a quality non-wood fiber that competes with softwood fiber.”
ReStalk’s first project with the SFT license will be building a a pulp mill capable of producing100 tons-per-day of pulp. “We’re eager to provide the infrastructure needed to stabilize this re-emerging crop,” said Lucas Hildebrand, ReStalk’s chief strategy officer. “This project will strengthen the supply chain and manufacturing of hemp’s downstream products here in the US. We’re excited to get to work and lay the foundation for a more regenerative model of production.”
As the pandemic caused by COVID-19 continues to disrupt global supply chains, the need for scalable sustainable solutions has never been more necessary, according to a press release. The mill positions ReStalk as the largest supplier of American manufactured hemp pulp.
“Consumer demand for new sources of sustainable packaging is accelerating worldwide. Along with forest-based fibers, we see tremendous interest in hemp and similar alternative agricultural fibers,” said Warren Pullen, executive vice president for Central National Gottesman, a pulp, paper, packaging, tissue and non-wovens distribution. “We believe ReStalk has the potential to successfully address unmet demand for hemp fiber and take green packaging to the next level.”
Words say a lot. It’s especially true in the rule of law. When Congress approved the recent appropriations bill to keep the government running, lawmakers also passed the “Preventing Online Sales of E-Cigarettes to Children Act,” which prohibits the United States Post Office (USPS) from shipping vaping products.
Credit Anne Onyme
While the legislation was geared towards nicotine vaping products, the law is so broadly defined that hemp businesses must also prepare to comply, according to Patricia Kovacevic, founder and president of PK Regulatory Strategy. The legislation takes effect in late March – 90 days after its published in the Federal Register. The USPS then has 120 days to issue its rules.
Speaking during a Smoke-Free Alternatives Trade Association (SFATA) webinar, Kovacevic said that the legislation states that an electronic nicotine delivery system (ENDS) is defined as any device that “delivers nicotine, flavor, or any other substance to the user inhaling from the device.”
“It’s very broadly defined. It really is any other substance. So even if you inhale, I’m being ridiculous, the air [if inhaled from] a device is still covered,” she said. “So, unfortunately, it’s very broad. That’s actually what makes it worrisome. But that also could be its flaw. [The definition being too inclusive] could be an opportunity to challenge the rule.”
According to the legislation, anyone selling vaping products must:
Register with the U.S. Attorney General
Verify age of customers using a commercially available database
Use private shipping services that collect an adult signature at the point of delivery
If selling in states that tax vaping products, sellers must register with the federal government and with the tobacco tax administrators of the states
Collect all applicable local and state taxes, and affix any required tax stamps to the products sold
Send each taxing state’s tax administrator a list of all transactions with customers in their state, including the names and addresses of each customer sold to, and the quantities and type of each product sold
Maintain records for five years of any “delivery interrupted because the carrier or service determines or has reason to believe that the person ordering the delivery is in violation of the [PACT Act]”
Both UPS and FedEx have rules against shipping traditional cigarettes and say they will extend those rules to include ENDS products. Violators can receive up to three years in prison, face steep fines and potentially lose their business.
