Editors Note: An earlier, unedited draft version of this story was briefly posted online before being corrected. We regret any confusion to our readers.

CBD hemp seedlings grow in the summer of 2016 in Vermont. by Monica Donovan for Heady Vermont

CBD hemp seedlings grow in the spring of 2016 in northern Vermont. by Monica Donovan for Heady Vermont

BURLINGTON, Vt. — Of the 100,000 hectares dedicated to hemp cultivation worldwide, Vermont farmers registered with the Vermont Department of Agriculture’s Hemp Registry planted 60 acres this year. Hemp has been proven to possess countless practical applications, too numerous for one article to cover with granularity. Hemp stalks can be converted into fiber for textiles. Hemp seed can be sold for pressing into hemp seed oil and biodiesel. Hemp hurds, or “core,” may be converted into a construction material known as Hempcrete. Hempcrete is a chemical-free, carbon negative building material safer for the environment. Most of the hemp being grown in Vermont is being grown for biomass, but demand on the nutraceutical market for cannabidiol (CBD), a non-psychotropic phytocannabinoid found in certain hemp varieties, is growing among Vermont hemp farmers who plan to dedicate additional field acreage for growing more valuable high-CBD hemp varieties. 

Introducing Cannabidiol (CBD)

Of the 66 known cannabinoids found in the cannabis sativa plant, cannabidiol (CBD) is the second most abundant behind Δ9-tetrahydrocannabinol (THC). CBD is usually found in greater abundance in higher-THC cannabis varieties, but in recent years selective breeding programs have stabilized high-CBD, low-THC cultivars expressing a genetic inhibitor that suppresses THC below the legal delineation of 0.3% THC for hemp. Such varieties meet the legal definition for hemp under Section 7606 of the 2014 Farm Bill, which is why high CBD hemp strains containing less than 0.3% THC have more valuable genetics.

Hemp Research

Another major impact of the 2014 Farm Bill was Section 7606, allowing institutions of higher education and state departments of agriculture to grow hemp for research and pilot program purposes. The University of Vermont is one of these

The state’s hemp research is overseen by Dr. Heather Darby, who works out of UVM Extension Northwest Crops and Soil Program. It is not known which agricultural and economic metrics will be published when reporting for Darby’s Hemp Trials are published by the end of the year. The analysis of biological science data in conjunction with economic crop data taken from farmers to arrive at a macro view of statewide hemp crop value, average hemp crop value per acre and cost per acre, among other metrics, would aid research, inform farm planning, and guide public policy. 

CBD Interest Explodes – A Flash In The Pan?

A major catalyst in the CBD rush was the public awareness generated by CNN Chief Medical Correspondent Dr. Sanjay Gupta. Gupta reported on Charlotte’s Web, a high-CBD hemp strain developed by the Stanley Brothers in Colorado, whose full plant CBD extracts have been shown to reduce seizures in persons suffering from a conventional treatment-resistant form of epilepsy. 

“If it wasn’t for the Stanley Brothers helping kids and the research they’ve done out in Colorado with Charlotte’s Web, I don’t think we’d be talking right now,” says hemp farmer Morgan Laurent of Organic CBD, LLC, located in Holland, VT.

Retail Operations Manager Chris Copley of Champlain Valley Dispensary and Southern Vermont Wellness calls it “CBD everything – from toothpaste to face wash. I just went to the Marijuana Business Conference & Expo and we ask ourselves, what’s real here? How much do we want to invest and put on our shelves?” 

When asked about whether the explosion in demand for CBD is a flash in the pan, both Copley and Laurent are in complete agreement – “CBD is not a fad.”

Feds Know CBD Has Therapeutic Value 

U.S. Patent 66030507 named “Cannabinoids as antioxidants and neuroprotectants,” is a medical patent awarded to the U.S. Department of Health and Human Services. In addition to having patented medical value as an antioxidant and neuroprotectant, medical research shows CBD has therapeutic value as an anti-inflammatory. Project CBD, a company whose website describes them as “California-based nonprofit dedicated to promoting and publicizing research into the medical uses of cannabidiol (CBD) and other components of the cannabis plant,” lists 51 known conditions from acne and anxiety to ischemic stroke that studies show CBD helps treat. 

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Letter from outgoing VT Attorney General, William Sorrell assuring the legality of Charlotte’s Web and other CBD products in Vermont

The body of medical evidence supporting CBD’s therapeutic value is growing. A query of the term “cannabidiol” on the Pubmed database hosted by the US National Library of Medicine National Institutes of Health yields 1680 search results. 98 of the 1680 results are for clinical trials and 234 are for peer reviews. 175 new entries were added to the Pubmed database in 2016 alone, up 49% from 114 in 2014.  

Copley believes CBD may improve athletic performance and is growing in popularity with a variety of athletes. “Football players can’t take THC but may take CBD as an anti-inflammatory and neuroprotectant. Marathon runners and MMA fighters use CBD for serious inflammation reduction.” Copley recommends Mary’s Nutritionals brand of CBD products for persons suffering from inflammation. “Your body can’t heal when it’s inflamed and your body can’t heal when it is not getting proper nutrition,” says Copley.

Laurent has completely sold out of his CBD rosin supply this year. “A buyer located down in Massachusetts just bought up all my rosin for making edibles,” he says. Most of Laurent’s retail customers learn about him and his hemp products through word of mouth. Neighbors take his CBD tincture to aid with sleeping and for joint pains. “I’ve got one neighbor who broke his ankle a couple years ago who takes a quarter teaspoon of my CBD oil daily. The pain goes away, and you’re not stoned. Many people use cannabis but don’t like to be stoned all day.”

The “Entourage Effect”

Many botanical experts believe CBD is more effective when derived from whole plant extracts because it preserves the cannabinoids and terpene profile to produce an “entourage effect.” Hemp terpenes and cannabinoids may work together for improved efficacy when taken together over taken separately.

Copley says, “When a patient with a medical card takes THC and CBD together, the effect is greater than those who do stand alone CBD. It behooves them to find a low-THC, high-CBD strain. That’s the pinnacle if a patient can do that.” 

CBD Market Strength

According to the Hemp Business Journal’s market overview in the “CBD Report,” CBD is a fast-rising market segment:

”Hemp CBD market rose from a market that was barely noticeable a few years ago to $90 million in consumer sales for hemp-based CBD products in 2015. Projections to date for 2016 indicate that the total CBD market is poised to grow 27 percent to reach $115 million across channels,” not counting dispensary sales. As sales of CBD products continue to increase, HBJ forecasts the entire U.S. CBD market will increase to $2.1 billion by 2020 and that $450 million of those sales will be from hemp-based sources, and the rest from marijuana sources.”

CBD Market Risks

Hemp farmers face risk apart from crop pathogens and Vermont’s weather – the risk of Uncertainty. The lack of standardized lab testing methodology brings uncertainty to the hemp market. Genetic diversity among seed found produced by one female hemp plant can contains genetic uncertainty. “The problem with growing from seed, you cannot guarantee every plant will be the same. Genetic difference is too much, and you don’t want to risk Ag Department taking sample which tests above 0.3% but with growing from cuttings, you get exactly what the mother plant is,” says Laurent.

Uncertainty with CBD prices caused by rising supplies and processing capacity can also produce erratic price fluctuation. The “CBD Price Index” report published by electronic commodities facility Seed CX cites CBD prices down 27% since July. Production costs may rise when new regulations are introduced, and the FDA could recognize CBD as a medicine next year. A medicine designation may put hemp cultivators and processors under very strict regulations, introducing higher compliance costs while shrinking the market by limiting access to persons with a doctor’s prescription.  The 1972 listing of “Marihuana” as a Schedule I Controlled Substance having no medical value may prevent the FDA from regulating CBD as a drug.  Rescheduling cannabis may change that. The United Kingdom recognized CBD as medicine in October.  Come December, CBD will be unavailable for purchase through retail sales channels in the UK, creating a run on UK CBD products. 

According to Copley, regulation is underway which forbids product labeling from mentioning CBD. Mary’s Nutritionals is changing their labeling to say hemp oil.  When asked to identity the regulatory authority behind the new labeling restriction, Copley could not say for certain. “The industry is getting heat from different government agencies because people have been making unqualified medicinal claims like ‘this will heal you.’ Agencies are figuring out how to regulate it or not regulate it.”

Organic, Localvore CBD

Champlain Valley Dispensary wants to locally source Vermont CBD for sale alongside their full line of branded CBD hemp products like Reiley’s Hemp Vet for dogs and cats, and Mary’s Nutritionals for CBD customers without a medical card.  The Champlain Valley Dispensary and it’s sister medical marijuana dispensary in Brattleboro, Southern Valley Wellness (SVW) operate the CVD Shop and SVW Shop, businesses different from the nonprofit medical marijuana dispensaries that share similar names. Unlike the dispensaries, which can only be accessed by registered medical marijuana cardholders, those two shops are open to all members of the public and focus on CBD products and education.

Said Copley, “We’ve opened these stores because we see the greater vision and believe in educating and providing people with wider access to CBD and have a full line of CBD products – tinctures, transdermals, capsules, salves, gum, lip balm. One of our hottest selling new items is the CBD cartridge vape pen from the O-pen brand.” says Copley.  

“We have a letter written by AG Sorrel allowing us to sell CBD-only products, which can be a grey area in many states and prevent hemp products from hitting the market. CBD has to be hemp derived containing below .3% THC which we test for in our Milton lab. We have not used hemp grown in Vermont yet, but we’re talking to local hemp growers for partnering and doing the extraction here.”   

Copley continues, “The hardest thing is getting organically grown hemp oil. A lot of it is grown overseas in Europe and Asia and imported. A lot of that stuff doesn’t test out with the proper range of cannabinoids it advertises and it’s harder to verify the quality of the growing conditions. We call our standards ‘best practices’ because Vermont can not yet issue “organic” standards; however, we take our plant cultivation beyond the standards set for most organic Ag products in the state.”

On his operation, Laurent uses organic fertilizers by North Country Organics on his 20-acre hemp field. He fertilizes with a custom blend of cow and fish manure, kelp, and diluted unsulphured molasses to feed the beneficial microorganisms living in the rhizosphere.

Copley knows that other Vermonters are certainly interested in getting into the CBD game, as they frequently receive calls and emails from members of the public asking if the shop can test a homemade product, to which Copley must decline due to the risk of a product having too much THC and therefore being illegal in the CVD Shop:

“Even if it’s 1% THC in their product that’s an illegal product and can’t be in the CVD Shop or SVW Shop, so when people call us asking if we can test, and then sell, their homemade CBD products, we’ve got to say no as there’s a chance they won’t test under the .3% threshold.”

Vermont’s Climate Favorable for Hemp:

When asked how Vermont’s hemp growing climate compares to northern California, Laurent states “In northern California, it costs more to grow because of water. Vermont is a better natural growing climate for hemp. In California they have sand and have to irrigate and add food to the soil. But in Vermont we have good soil. We are in the mountains where there is plenty of water and lots of green. I have clay four feet down full of minerals.” Describing the size of his hemp plants, Laurent says, “Some of my plants are as tall as me and as wide as a small car.” 

Lab Testing

According to Copley, one of the major issues hindering the growth of the CBD industry is that some people who want to get in the hemp business aren’t testing their products properly, and that the companies doing the testing are mostly self-regulated.

“Unfortunately, I’ve heard too much about testing being a ‘pay-to-play’ kind of operation in other places where unscrupulous testing facilities out there manipulate results by technique (such as over-drying buds), or even straight up falsifying reports. We’re not about rigging our results and are there to help people. There are many people who want to get into this game whose hemp products aren’t testing properly. Some CBD is not even detectible in their products and unfortunately, there are some snake-oil salespeople and shaman out there with no lab testing backing their products.

Copley says testing methodologies vary from one lab to the next:  “We do whole plant extractions and test the whole plant, unlike just the aerial parts high up on the plant which contain higher amounts and load results. We test other products and plants based off our internal standards, but other businesses and dispensaries have their own different procedures. “

Morgan Laurent recounts the Vermont Department of Agriculture visit his facility this season.  “It’s important anything leaving property is below 0.3% THC.”

Laurent says that he uses ProVerde Labs, a Massachusetts-based company, for testing his CBD product batches.  “ProVerde Labs is very good, very accurate”. Still, he also appreciates the need for further standardization between testing facilities and recognizes the challenges in regulating the testing agencies themselves, saying, “you can send a sample to 3 different labs and get back 3 different results”. 

Copley says that he hopes that the Vermont Department of Agriculture will eventually be able to test both hemp and marijuana for quality, as well as issue organic certifications, but due to federal restrictions, are not able at this time. “Third party certification is something that is under development. Charlotte’s Web is the only one with organic certification out there.”

Decline to Comment

Heady Vermont reached out to Green Mountain CBD, a hemp product company founded in Hardwick which VPR’s John Kalish recently reported received a $250,000 investment from Will Raap, founder of Gardeners’ Supply and Alan Newman, founder of Magic Hat and Seventh Generation, to be interviewed for this story. Green Mountain CBD CEO Alejandro Bergad politely declined to speak to Heady Vermont about his background and business; however, in the comment section of that VPR piece, Bergad did shed insight into his specific Colorado hemp experience that he and his partners have brought to the Northeast Kingdom via a response in teh comment section:

“To reiterate I worked as the chief [sic] ag officer at a 45 person VC backed company while in Colorado. I established their breeding program, worked extensively on business development, and helped a company from the ground up grow 50,000 pounds of hemp for CBD production.”

Conclusion

Opportunity abounds for Vermont registered hemp farmers, but with the potential rewards comes a great deal of risk. Uncertainty permeates the hemp industry, caused by price fluctuation in the market for CBD, regulatory changes to hemp product labeling, and the hunt for lab testing standards to ensure honest and accurate test results that benefit hemp product consumers and producers alike. Vermont Cannabis: Heady Vermont Watermark

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