December 2018 Magazine

CBD: A Budding Business

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Since being legalized in 2016 by a state constitutional amendment, medical marijuana is slowly becoming available to Arkansas citizens.

By Tyler Hale | Photography By David Yerby and Jamison Mosley

The years since the amendment’s passage have seen the creation of the Medical Marijuana Commission, the adoption of rules for testing and manufacturing and the issuing of cultivation licenses.

However, marijuana continues to face roadblocks to widespread use. In Arkansas, medical marijuana has not yet been grown or produced, and federal regulations still criminalize marijuana. Under federal law, cannabis, even medical marijuana, is classified as a Schedule I substance, which is defined as a drug with “no currently accepted medical use and a high potential for abuse.”

Another substance has in recent years stepped in to fill the void as patients await medical marijuana. Cannabidiol, or CBD, is becoming increasingly popular as a health and wellness product, and it is touted as having health benefits ranging from pain relief to reducing nausea.

While CBD is derived from the cannabis/hemp plant, like marijuana, it does not contain the psychoactive compound THC. (THC is the compound found in marijuana that produces the “high.”) The difference between medical marijuana and CBD is both a legal and chemical one. According to both the 2014 and 2018 Farm Bills, the legal definition of industrial hemp, which CBD would fall under, is any cannabis plant that has a THC concentration of 0.3 percent or less.

Industry leaders – from entrepreneurs to farmers – are stepping up throughout Arkansas to provide CBD as a solution for health ailments and wellness. According to Matthew Kane, president and co-founder of Complete Body Daily, the delays in Arkansas’ medical marijuana industry have opened a door for the CBD industry to expand and provide wellness options for Arkansans. “We need a solution, but medical marijuana is taking so long. CBD is the only solution for the state that we can actually provide to citizens today because of all the red tape…with the marijuana,” Kane says.

Other business owners, like Mark Roberts, a co-partner in Little Rock’s Healing Hemp, agree with Kane, adding that CBD is more market-friendly than medical marijuana.

As a result, CBD is reaching people who would likely not seek cannabinoid products. “Our idea is that people need medical marijuana. But because of the stigma, especially in the South – the Bible Belt – there’s a lot of people who would never set foot in a marijuana dispensary because it’s marijuana. We’re not screaming hemp or cannabis. We want everyone to feel welcome here,” Roberts says.

Matthew Kane

The CBD industry has risen quickly in Arkansas, going from an obscure hemp compound to a product that is advertised on roadside billboards. Kane estimates that the Arkansas industry took off in the last 15 months and began picking up more steam around six months ago. Now, CBD products are readily available in Arkansas, at specialty stores like Healing Hemp and Complete Body Daily, as well as pharmacies and even gas stations.

“I don’t want to call it a trend, but it’s the fastest growing thing in health and wellness,” Kane says. “It’s the money driver that is bringing attention to hemp.”

Currently, there is no hemp production in Arkansas, although producers have been able to apply for grow licenses with the state plant board. As a result, CBD products are being sourced out of state. According to Roberts, most of Healing Hemp’s products are sourced from states that have established cannabis industries, including Oregon, Colorado and California.

Arkansas farmers are looking to change the hemp and CBD industry once grow licenses are issued. Jody Hardin, a fifth-generation Arkansas farmer, is one such farmer who has applied for a grow license. Once the licenses are issued, Hardin expects hemp production to “blow up” across the state.

But hemp production won’t be limited to CBD. According to Hardin, farmers across the state will likely focus on different types of hemp production. Northwest Arkansas will be the epicenter for hemp production for medical purposes, such as CBD, Hardin says, while the south, southeast, southwest and central parts of the state will likely focus on hemp fiber production. He attributes the focus to differences in soil conditions based on established farming practices.

“I think the state is going to be divided based on geography and soil. The plant naturally eats up all the toxins in the soil,” Hardin says. “Down in south Arkansas, where commercial crops have been grown for so many years, there’s going to be a lot of heavy metals that would be rejected in the medical market.”

Roberts adds that the conditions that help rice thrive in Arkansas will work against hemp for medicinal purposes. Like a bonsai tree, hemp plants grown for medicinal purposes prefer to soak up water, he says. “Hemp and marijuana both don’t want to sit in water. They both would rather the water pass through them,” Roberts says.

Before farmers can begin growing hemp on a large scale, the state will need infrastructure to handle the unique needs of hemp. The essential infrastructure needs, according to Jason Martin, CEO of Tree of Life Seeds, will be processing facilities and a strong labor force.

Jason Martin

“We don’t have a single person growing. So, from that standpoint, there’s not a lot of reason to have an infrastructure. But to ramp up, we have to have an infrastructure,” he says. “We have to have folks come along and make a $5, 10, 15 million investment into that kind of processing facility investment in this state.
“Arkansas is going to have to have processing. That’s going to have to be in place for farmers to have a place to take their crops once they’ve grown it,” Martin adds.

While the costs for processing equipment can vary based on its size, it remains an expensive business proposition. Hardin was recently sourcing extraction equipment for hemp and notes that “it’s very expensive equipment, very high-tech.”

The second infrastructure need will be a labor force that can tend to and harvest the hemp. Hemp grown for medicinal purposes is tended and harvested by hand, according to both Roberts and Martin, while hemp grown for fiber can be mechanically harvested.

This creates a new job market for agricultural workers but also a problem for farmers, who have to handle the additional overhead.

Despite the difficulties facing the CBD industry, it is looking bright for the pioneers of this burgeoning field in Arkansas. With the passage of the 2018 Farm Bill and hemp grow licenses, the CBD industry watchers are predicting that CBD retailers and hemp producers will have a strong future in the state.

“People are going to be telling their friends; little old ladies at the bridge club will be telling their friends. It’s already happening,” Hardin says.

“I truly believe that the people that are investing in CBD are going to do a lot better than the people that are investing in medical marijuana in the state of Arkansas. I think it’s going to be a much bigger industry,” Kane says.

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