Tag Archives: medicine

CBD You in Court: Consumer Class Actions Involving Hemp-Derived CBD Products

By David J. Apfel, Nilda M. Isidro, Brendan Radke, Emily Notini, Zoe Bellars
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Consumer demand for products containing cannabidiol (CBD) is on the rise across the country, with industry experts estimating that the market for CBD products will reach $20 billion by 2024. This boom in consumer demand has outpaced the regulatory framework surrounding these products. While the 2018 Farm Bill decriminalized hemp, it left much up to individual states and preserved the FDA’s jurisdiction over dietary supplements, foods and cosmetics. The FDA has not yet issued any specific rulemaking for CBD products.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Against this background, it is not surprising that consumer class actions regarding hemp-derived CBD products are flourishing. Over the past year alone, the plaintiffs’ bar has filed approximately twenty putative class action lawsuits against manufacturers of hemp-derived CBD products. The cases are primarily in federal court in California and Florida, with additional cases in Illinois and Massachusetts. Plaintiffs challenge the marketing and advertising of a variety of CBD products, including oils, gummies, capsules, creams, pet products and more.

The cases so far follow a familiar pattern seen in prior consumer class actions, especially in the food and beverage industry. Read on to learn what plaintiffs have claimed in the CBD lawsuits, how companies are defending their products, and how best to position your hemp-derived CBD products in light of lessons learned from past litigation.

What These Lawsuits Are Claiming, and How Companies Are Defending Their Products

In most of the recent CBD lawsuits, plaintiffs claim either that: 1) product labels over- or understate the amount of CBD in the products; and/or 2) the sale of CBD products is inherently misleading to consumers because the products are purportedly illegal under federal law. Regardless of which theory underlies the claims, plaintiffs typically frame their claims as consumer fraud, false advertising, breach of warranty, unjust enrichment, and/or deceptive trade practices.

Just some of the many CBD products on the market today.

In most cases, defendants have filed motions to dismiss seeking to have the cases thrown out. In these motions, defendants argue that plaintiffs’ claims are “preempted” by the Federal Food Drug and Cosmetic Act (FDCA), and that only the federal government can enforce the FDCA. Some defendants have additionally argued that if the court is not prepared to dismiss the claims as preempted, the doctrine of “primary jurisdiction” applies. This means that the issues raised regarding CBD are for the FDA to decide, and the cases should be stayed until the FDA finalizes and issues rules on products containing hemp-derived CBD. Many defendants have also advanced dismissal arguments for lack of standing, claiming that the individuals bringing the lawsuits are trying to sue for conduct that never harmed them personally (e.g., because they never purchased a particular product), or will not harm them in the future (e.g., because plaintiffs have stated they will not buy the product again). The standing arguments often apply to particular claims or products within the lawsuit, rather than to the lawsuit as a whole.

Current Status of the Cases

Of the approximately twenty consumer class actions filed over the last year, about half remain pending:

  • Five have been stayed pursuant to motions filed by defendants;
  • Two have motions to dismiss pending;
  • One has a pending motion to vacate a default judgment against defendants;
  • One was filed earlier this month, and defendant’s deadline to respond has not yet elapsed.

FDAlogoTo date, none of the cases (currently pending or otherwise) has proceeded to discovery, and no class has yet been certified. That means that no court has yet determined that these cases are appropriate to bring as class action lawsuits, rather than as separate claims on behalf of each individual member of the putative class. This is significant, because plaintiffs’ ability to achieve class certification will likely influence whether these CBD lawsuits will continue to be filed. Consumer fraud cases like these typically do not claim any physical injury, and the monetary damages per individual plaintiff are relatively low. As such, the cases often are not worth pursuing if they cannot proceed as class actions.

Of the cases that are no longer pending, all but two were voluntarily dismissed by plaintiffs. While the motivation behind these dismissals is not always announced, approximately half of the voluntary dismissals came after defendants filed a motion to dismiss, but before the court had ruled on it. One Florida case was mediated and settled after the court denied defendant’s motion to dismiss.1 A California court spontaneously dismissed one matter (without the defendant having filed any motion) due to a procedural defect in the complaint, which plaintiffs failed to correct by the court-imposed deadline.2

Early Outcomes on Motions to Dismiss 

Of the thirteen motions to dismiss filed to date, only five have been decided. So far:

  • No court has dismissed a case based on federal preemption grounds. Courts have either deferred ruling on preemption, or denied it without prejudice to re-raising it at a later time.
  • Four courts have stayed cases based on primary jurisdiction.3
  • Only one court has denied the primary jurisdiction argument.4
  • Standing arguments have been successful in three cases,5 and deferred or denied without prejudice to later re-raising in the other two cases.6 However, the standing arguments applied only to certain products/claims, and were not dispositive of all claims in any case.

These rulings show a clear trend towards staying the cases pursuant to primary jurisdiction. In granting these stays, courts have noted that regulatory oversight of CBD ingestible products, including labeling, is currently the subject of FDA rulemaking, and that FDA is “under considerable pressure from Congress” to expedite the publication of regulations and guidance.7

Any label claims need to meet FDCA regulations and applicable FDA guidance.

Plaintiffs may be recognizing the trend towards primary jurisdiction as well, since there is now at least one case where plaintiffs agreed to a stay after defendant filed a motion to dismiss asserting, among other things, primary jurisdiction.8 But some plaintiffs are still resisting. For example, in the first case to have been stayed plaintiffs have since filed a motion to lift the stay. The motion—which was filed after the case was reassigned to a different judge—argues that primary jurisdiction does not apply, and that the FDA’s recent report to Congress suggests no CBD-specific rulemaking is forthcoming.9 The motion is pending.

Lessons Learned From Food Industry Consumer Class Actions

The motions to dismiss that have been filed to date in CBD-related class actions follow a tried and true playbook that has been developed by defense counsel in other food and beverage industry class actions. For example, the primary jurisdiction arguments that have been gaining traction in the CBD consumer class actions are very similar to primary jurisdiction arguments that were successful years earlier in cases involving the term “natural” and other food labeling matters.10

Similarly, the standing arguments that have succeeded in the early motions to dismiss CBD consumer class actions followed similar standing arguments made years earlier in food and beverage class actions.11

Work with reputable labs to ensure the potency stated on the label is accurate

The preemption arguments that have largely been deferred in CBD consumer class actions to date could become a powerful argument if and when the FDA completes its CBD rulemaking. The preemption defense has been particularly effective when the preemption arguments focus on state law claims that require defendants to omit or add language to their federally approved or mandated product labeling, or where plaintiffs otherwise seek to require something different from what federal standards mandate.12 These arguments could be particularly compelling once the FDA issues its long-anticipated rulemaking with respect to CBD products.

Until then, primary jurisdiction will likely continue to gain traction. The FDA’s comprehensive regulatory scheme over food, dietary supplement, drug, and cosmetic products, combined with the FDA’s frequently-expressed intention to issue rulemaking with respect to CBD-products, and a need for national uniformity in how such rulemaking will interface with state requirements, converge to make primary jurisdiction especially appropriate for CBD-related class actions.13

How to Best Position Your Products

Until the FDA issues its long-awaited rulemaking regarding CBD products, companies can take the following steps to best position their products to avoid litigation and/or succeed in the event litigation arises:

  • Work with reputable labs to ensure the amount of CBD stated on product labeling and advertising is accurate;
  • Ensure that the product is manufactured according to appropriate current Good Manufacturing Processes (cGMPs);
  • Ensure that any claims made on product labeling and/or in advertising are consistent with FDCA requirements and applicable FDA guidance to date – for example, if the product is a dietary supplement, avoid making express or implied claims that it can cure or prevent disease;
  • Maintain a file with appropriate substantiation to support any claims stated in product labeling and advertising;
  • Work with legal counsel to stay abreast of developments in federal and state laws applicable to hemp-derived CBD products, and how any changes might impact potential class action defenses; and
  • If a lawsuit arises, work with legal counsel to develop a strategy that not only resolves the current litigation as efficiently as possible, but also positions the company strategically for any future consumer claims that may arise.

References

  1. Final Mediation Report, Potter v. Potnetwork Holdings, Inc., 1:19-cv-24017-RNS, (S.D. Fla. July 30, 2020).
  2. Court Order, Davis v. Redwood Wellness, LLC, 2:20-cv-03273-PA-JEM (C.D. Cal. Apr. 10, 2020).
  3. Electronic Order, Ahumada v. Global Widget LLC, 1:19-cv-12005-ADB (D. Mass. Aug, 11, 2020); Memorandum and Order, Glass v. Global Widget, LLC, 2:19-cv-01906-MCE-KJN (E.D. Cal. June 15, 2020); Order Granting in Part Defendant’s Motion to Dismiss and Staying Remaining Causes of Action, Colette et al. v. CV Sciences Inc., 2:19-cv-10227-VAP-JEM (C.D. Cal. May 22, 2020); Order on Motion to Dismiss, Snyder v. Green Roads of Florida LLC, 0:19-cv-62342-AHS (S.D. Fla. Jan. 3, 2020).
  4. Order on Motion to Dismiss, Potter v. Potnetwork Holdings, Inc., 1:19-cv-24017-RNS, (S.D. Fla. Mar. 30, 2020).
  5. Order Granting in Part Defendant’s Motion to Dismiss and Staying Remaining Causes of Action, Colette et al. v. CV Sciences Inc., 2:19-cv-10227-VAP-JEM (C.D. Cal. May 22, 2020); Order on Motion to Dismiss, Potter v. Potnetwork Holdings, Inc., 1:19-cv-24017-RNS, (S.D. Fla. Mar. 30, 2020); Order on Motion to Dismiss, Snyder v. Green Roads of Florida LLC, 0:19-cv-62342-AHS (S.D. Fla. Jan. 3, 2020).
  6. Electronic Order, Ahumada v. Global Widget LLC, 1:19-cv-12005-ADB (D. Mass. Aug, 11, 2020); Memorandum and Order, Glass v. Global Widget, LLC, 2:19-cv-01906-MCE-KJN (E.D. Cal. June 15, 2020).
  7. Order on Motion to Dismiss at 12, Snyder v. Green Roads of Florida LLC, 0:19-cv-62342-AHS (S.D. Fla. Jan. 3, 2020).
  8. Minute Entry, Pfister v. Charlotte’s Web Holdings, Inc., 1:20-cv-00418 (N.D. Ill. Aug. 11, 2020).
  9. Plaintiff’s Motion to Lift Stay, Snyder v. Green Roads of Florida LLC, 0:19-cv-62342-AHS (S.D. Fla. July 13, 2020).
  10. See, e.g., Astiana v. Hain Celestial Grp., Inc., 905 F. Supp. 2d 1013 (N.D. Cal. 2012), rev’d on other grounds, 783 F.3d 753 (9th Cir. 2015); Taradejna v. Gen. Mills, Inc., 909 F. Supp. 2d 1128 (D. Minn. 2012).
  11. See Miller v. Ghirardelli, 912 F. Supp. 2d 861, 869 (N.D. Cal. 2012) (holding that the named plaintiff lacked standing where the products purchased by the putative class members were not “substantially similar” enough to those purchased by the named plaintiff); Colucci v. ZonePerfect Nutrition Co., No. 12-2907-SC, 2012 WL 6737800 (N.D. Cal. Dec. 28, 2012) (finding one of two named plaintiffs lacked standing because, even though the other named plaintiff (his fiancée) purchased the nutrition bars for him, he himself did not purchase any of the bars); Veal v. Citrus World, Inc., No. 2:12-CV-801-IPJ, 2013 WL 120761 (N.D. Ala. Jan. 8, 2013); Robinson v. Hornell Brewing Co., No. 11-2183 (JBS-JS), 2012 WL 6213777 (D.N.J. Dec. 13, 2012) (holding that there was no Article III standing because the named plaintiff had testified and stated in written discovery that he would not purchase the product in the future).
  12. See, e.g., Turek v. Gen. Mills, Inc., 662 F.3d 423 (7th Cir. 2011); Lam v. Gen. Mills, Inc., 859 F. Supp. 2d 1097 (N.D. Cal. 2012); Veal v. Citrus World, Inc., No. 2:12-CV-801-IPJ, 2013 WL 120761, at *9-10 (N.D. Ala. Jan. 8, 2013).
  13. See, e.g., Astiana v. Hain Celestial Grp., Inc., 905 F. Supp. 2d 1013 (N.D. Cal. 2012), rev’d on other grounds, 783 F.3d 753 (9th Cir. 2015); Taradejna v. Gen. Mills, Inc., 909 F. Supp. 2d 1128 (D. Minn. 2012).

Why Organic Should be the Future of CBD

By Josh Epstein
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The hemp industry is rapidly growing, but it’s no secret that it suffers from a major legitimacy problem. When manufacturers choose to certify their products and processes under a third-party agency, such as the USDA, it is a way for those companies to gain credibility with new customers.

USDA LogoThe USDA’s organic certification program is a great way to increase transparency and trust with both ingredients and processes used within the hemp industry. Organic certification is a rigorous audit program to review both manufacturing facility design and production process plans with the ultimate goal of increasing supply chain sustainability.

Investing in organic certification is a smart business decision – especially in today’s competitive CBD market. A recent Bloomberg report has shown that COVID-19 has actually accelerated organic food sales in the US due to increased demand for health-conscious foods and drinks. “Sales of organic food and drinks surged 25% during the 17-week period ended June 27,” according to Nielsen Data.

Organic certification is one way to differentiate between the thousands of seemingly identical CBD products being sold in the marketplace today. From a consumer perspective, organic certification provides both supply chain transparency and increases confidence with brands and products they already love. It also provides a form of quality assurance to skeptical consumers, especially those who avidly read product labels prior to making a purchasing decision. Members of this “label reader” demographic will consistently choose organic products for the quality and transparency it provides with pure and natural ingredients.

Not only does certification support ethical practices, it’s also good for business. According to the USDA, “Food labeling can be confusing and misleading, which is why certified organic is an important choice for consumers. Consumers are willing to pay a premium for food that carries the USDA organic seal, or that contains organic ingredients.”

Organic farming and production processes significantly contribute to increasing sustainability within the CBD industry. In general, organic farming is a growing practice for farmers across the US. According to the Pew Research Center, “There were more than 14,000 certified organic farms in the United States in 2016, according to the latest available data from the U.S. Department of Agriculture’s National Agricultural Statistics Service. This represents a 56% increase from 2011, the earliest comparable year.” The USDA has found that organic production practices can improve water quality, conserve energy, increase biodiversity and contribute to soil health. In terms of organic farming, soil ecology and water quality are both protected by farmers committing to working within regulated guidelines.

Organic certification ensures transparency and trust with a consumer-friendly approach to ingredient products. This comes on the heels of research showing that the CBD market lacks credibility. Organic CBD should be the next step all brands should take to ensure they’re adapting to changing consumer preferences.

The Brand Marketing Byte

The Hottest U.S. Cannabis Retail Brands Right Now

By Cannabis Industry Journal Staff
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The Brand Marketing Byte showcases highlights from Pioneer Intelligence’s Cannabis Brand Marketing Snapshots, featuring data-led case studies covering marketing and business development activities of U.S. licensed cannabis companies.

In this week’s Byte, we’re taking a look at the hottest retail U.S. cannabis brands right now. Using a scoring methodology that factors in a wide variety of data sets, Pioneer’s algorithm tracks brand awareness, audience growth and engagement. Using more than 80,000 relevant data points per week, they analyze business activity across social media, earned media and web-related activities.

The brands listed below have the strongest marketing performance indicators, according to Pioneer Intelligence, which includes web activity. Here are a few insights that explain why some of these companies made the cut:

  1. Cookies comes in at the eighth spot on July’s list. The brand does a lot of promotional content on their business development activity, which helps them make the news almost every week. This time around, they announced the debut of a new chain of Sativa-focused dispensaries under the brand name Lemonnade.
  2. Terrapin Care Station took the fifteenth spot in July’s list. Terrapin made headlines this month with their expansion in Michigan. Their newest brick-and-mortar location is the first medical cultivation facility to open in Grand Rapids, Michigan.
  3. Surterra Wellness had a podium finish in July, becoming the third hottest U.S. cannabis retail brand. Back in early July, they received a lot of press for launching its line of tinctures in Texas.

Here are the top 15 hottest U.S. cannabis retail brands for July 2020:

  1. Viola
  2. Stiiizy
  3. Surterra Wellness
  4. Dosist
  5. Grassroots
  6. GrowHealthy
  7. Liberty
  8. Cookies
  9. Serra
  10. gLeaf
  11. Caliva
  12. Sunday Goods
  13. Harvest
  14. Connected Cannabis Co.
  15. Terrapin Care Station

Spanish Cannabis Approved for Import to Germany

By Marguerite Arnold
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It is official. BfArM, the German version of the Food and Drug Administration and the federal agency with oversight of the national cannabis program, has approved Spanish medical cannabis imports into the country. Indeed, three German companies are now finalizing their paperwork to allow the transfer to be completed.

As Cannabis Industry Journal has learned, at least one of the companies on the Spanish side of the equation is the ever-interesting Alcaliber (Linneo Health). So far, the privately funded company has made smart, strategic business moves through a challenging transition period. With one of the few EU GMP-recognized licenses in Spain, it is a logical choice for German distributors in search of foreign-produced, but up-to-snuff product.

This is a positive and widely predicted turn of events as Germany begins to institutionalize its cannabis program at the next level. As of this fall, three producers will begin to distribute domestically grown cannabis in Germany. However, there is a clear need for a vibrant import market here and there will be for a long time to come.

Domestically grown cannabis, by design at least so far, was never intended to serve the entire base of medical cannabis patients in Germany. And Spain has been, from the beginning of the discussion, along with Portugal, Greece, Poland, Eastern Europe and of course Italy, an attractive market to produce high quality cannabis for export to (at minimum) Germany.

The European Ex Im Market Is Opening

While the Canadians still have an outsize impact on this market, that is clearly a period of time that is coming to an end. Indeed, Canadian produced cannabis is being turned down at the German border for quality issues linked to certification.

This is not a new issue. It has haunted the German market since 2017 and the beginning of the discussion about the German cultivation bid. But now it is official. Beyond Holland, and even Canada, in other words, lower cost cannabis is now entering the German market and from other European countries.

While Portugal and Denmark beat Spain to the punch, however, this is likely to be an impactful development for not only patients, but the entire price discussion. Distributors are clearly on the front lines of not only obtaining high quality cannabis (from somewhere), but meeting a price that is increasingly on the downward slide, just from the pressures of domestic production and the price structure created around the same by the German government.

Producers have been feeling the pinch, no matter where they are based, for at least the last 12 months.

The Impact On The Spanish Cannabis Discussion

It is unlikely that this development will not be duplicated by other Spanish companies vying for entry into the European and German markets. Spain has a thriving grey market cannabis economy in the form of Cannabis Clubs. It also, like Holland, has allowed a semi legitimate market as well as a distribution network to spring up around the same.

However, the times are also clearly changing. Holland is in the midst of regulating even its coffee shop cultivation economy as it becomes one of the most important exporters of medical cannabis to Germany. Expect the same trend in Spain, especially as Europe increasingly comes to the same conclusion as everywhere else. The regulated medical cannabis industry is great for economic development, especially for countries like Spain, with great weather and perhaps an overreliance on the tourism industry.

The Other European Producers Now In View
Beyond Spain, Portugal and Denmark have the right to import medical cannabis to Germany. This list is expected to continue to expand as patient numbers grow. Because of the price restraints now placed on the entire market by the German government, however, entering the country with an attractively priced product that will pass muster, not only with regulators but doctors and insurers, is now absolutely the name of the game.

And that is of course, before the recreational and CBD topic even enters the discussion – and both are clearly on the agenda now, across Europe.

Soapbox

Cannabis Is the Answer to Declining State Revenues

By Carl Silverberg, Seana Chambers
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As states grapple with flagging tax revenues and soaring unemployment as a result of the pandemic, governors and state legislators are facing a quandary. Either cut back on programs that voters like, or increase taxes to keep them funded. According to a recent assessment by iUNU, many legislatures will look to the booming business of legal cannabis as a revenue source.

“For those states that have only made incremental steps towards legalization within their jurisdiction… there’s going to be pressure to initiate, whether it’s through medical marijuana programs or the expansion into recreational,” says Martin Glass, a partner at Jenner & Block who specializes in mergers & acquisitions and securities transactions.

Martin Glass, a partner at Jenner & Block

In recent months, the average per-store retail sale of cannabis increased in legalized states – a telling change given the current state of the economy. Other facts – a loyal consumer base, proven health benefits and strong external investment – all point to a dependable industry. Mr. Glass saw this as a sign that cannabis is more stable than most believe: “The industry has proven to be quite resilient… it has absorbed the COVID-19 shock very well.”

Not only is cannabis a dependable industry, it’s also an expanding one. In 2019, global revenue rose to $15 billion, a 48% increase from the prior year. By 2020, economists expect that number to reach $20 billion. Kristin Baldwin, executive director of the Cannabis Alliance, added some perspective: “Right now, we’re at about 240,000 people employed according to the latest numbers I have. Maybe even 250,000. In King County, which is the largest county in Washington and where Seattle is, we had a 22% increase in sales in March alone.”

In the United States, the revenue from annual sales increased by nearly 40% from 2018 to 2019, rising 3.3 billion over the course of the year. This growth is expected to continue at a similar rate in the coming years, forecasted to hit $29.7 billion in revenue by 2025. These growth statistics are impressive and especially attractive as state legislatures and governors search for options to balance their budgets.

Kristin Baldwin, executive director of the Cannabis Alliance

The industry also is logging similarly impressive growth on the employment side. The cannabis industry was recently dubbed “the fastest growing job market in the country” by CNBC, leaping an estimated 110% from 2017 to 2019 and hitting six figures in real numbers during that three-year period. The industry turned in those impressive numbers while constrained to 33 states (11, if evaluated from a recreational standpoint), leaving plenty of room for growth.

Baldwin agreed. “I think employment will grow along with the sales just because you are going to need budtenders, delivery drivers, and farmers,” says Baldwin. “For example, in California, Oregon, and Washington – highly regulated systems – there’s still going to be a significant amount of growth because there’s a significant amount of demand.”

Heading into budget negotiations in 2021, states are facing huge revenue gaps. Right now, those dismissing cannabis are, as Glass says, “leaving a lot of money on the table” by failing to take advantage of a major economic resource. Not only does the industry produce tax revenue to expedite states’ recoveries, as legalization expands, the cannabis industry has the ability to provide thousands of jobs.

Still dubious? Baldwin shared this fascinating piece of information: “It’s a generational shift that’s occurring as we speak. The fastest growing consumer group in cannabis right now is women over the age of 40.”

Cannify Adds 1,500+ Products to Database

By Cannabis Industry Journal Staff
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According to a press release sent out this week, Cannify has added a new feature to their website, which allows users to check out more than 1,500 cannabis products available in the United States and save the ones that interest them.

Cannify’s mission is to “bring relevant cannabis science closer to the users, and vice versa, by extracting relevant data from hundreds of studies and making them easy to understand.” Dr. Linda Klumpers, one of the few clinical cannabinoid pharmacologists in the world, founded Cannify back in 2016. Cannify developed a science-based algorithm that helps patients learn which cannabis products are best suited for their personal needs. When patients take the Cannify quiz, it asks them in-depth questions and shows them relevant scientific literature in a personalized report. After that, they are given an overview showing which products match their reports best.

“Making your product database available is nothing new,” says Klumpers. “Making sure that it is actually useful, is a different story. The product list is easy to navigate, even for cannabis novices. Users can filter products by location, administration method, or compound: are they interested in THC, CBD, or both? It might sound so simple, but it turned out to be a rare feature on the market.”

This new addition to the Cannify platform aims to help enhance the overall utility and versatility of the system.

Cannify wants to collect, analyze and publish its data, which they hope will contribute to the advancement of cannabis research. In addition to the Cannify quiz and the product database features, the company also has plenty of educational materials, educational quizzes and customized cannabis courses available on their website.

Accelerate Your Business Growth with Great Product Packaging

By Ashlee Brayfield
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The cannabis industry is booming. Just the medical segment of the industry is expected to generate $22 billion in the next four years.

Today, 36 of the 50 states allow patients to use medical cannabis with a prescription. But there’s a lot of competition in the cannabis industry. To succeed, you must stand out from the rest with custom branded packaging for your cannabis and CBD offerings.

In fact, some of the most successful companies in the industry have built multi-billion dollar businesses based on a strong brand identity, including compelling packaging design for their cannabis and CBD products.

Here’s what you should keep in mind when designing packaging for your cannabis or CBD products:

Cannabis packaging should attract your target customers

Compelling and high-quality product packaging plays a big role in a customer choosing one cannabis or CBD product over another.

But, before you can create packaging solutions for your cannabis and CBD products, you must understand your target market, your prospective customers and the experience you want to promote.

Here are a few customer profiles for you to consider:

Luxury cannabis and CBD customers

A product is considered a luxury when the brand status is elevated in the eyes of the customer.

Luxury clients expect top quality products and packaging. And, as far as most customers are concerned, if a product is perceived as better than others – it is.

To aid in this perception, packaging options for premium products should be high quality, clean and minimal or luxe, and over-the-top.

Just some of the many CBD products on the market today.

And, the packaging should always deliver on the implied promises defined by the manufacturer or dispensary. In fact, if you want to start a cannabis dispensary, you should be thinking about the overall experience for your customers and how the products and packaging offered in your dispensary will stand out from others.

When designing packaging options for customers looking for luxury cannabis and CBD products, be sure to consider:

  1. Quality: Luxury consumers expect high-value, designer packaging that functions impeccably.
  2. Sense: Luxury product packaging should provide a heightened, tactile user-experience.
  3. Taste: Luxury product packaging should forgo the typical stereotypes associated with cannabis.

Millennial cannabis and CBD customers

Millennials are drawn to authenticity. They’re burnt out on traditional advertising, coercive marketing and carefully cultivated facades.

But they’re open to trendy design, and unique product uses and experiences. And, they’re generally receptive to following celebrity and influencer endorsements from people they perceive to have values that align with their own.

When designing packaging for Millennials, be sure to consider:

  1. Simplicity: Minimal, unadorned custom branded packaging appears authentic and trustworthy. This type of packaging represents the product within, without frills or facades.
  2. Sustainability: Millennials tend to value environmental consciousness. They value sustainable packaging that offers alternatives to plastics. You’ll get extra points if the packaging is made from renewable or plant-based materials.
  3. Limited Edition: Millennials want something not everyone can have. This is why scarcity marketing via special edition products is wildly popular.

Customers looking for relief

All medical cannabis customers have a medical need for cannabis and CBD products. A recent study found that approximately two-thirds of medical cannabis patients define chronic pain as their chief reason for treatment.

Patients looking for pain relief for medical issues will be drawn to custom branded packaging that promises what they desire, without making unsubstantiated health claims. So, an emphasis on the efficacy of your product and the relief they will enjoy will be very persuasive for that audience.

When designing packaging for customers looking for relief, be sure to consider:

  1. Medical symbols: Packaging design should make it clear that your product delivers health benefits. Some brands choose to do this through logos pairing cannabis leaves with medical symbols. But, with so many medical cannabis brands hitting the market, that concept will be quickly played out and overdone; making it hard for your brand to stand out. So, think of other ways you can convey your product’s medical value to set your brand apart.
  2. Text: Use clear, concise copy describing your product and its benefits. Pain relief should be a focal point of the package messaging.
  3. Simple design: Clean package graphics and labels with ample white space will ensure that consumers can read the product packaging and find the necessary information with ease.

Cannabis packaging should inform

The best custom branded packaging design successfully balances design and information. Custom packaging for any product must include basic product information on a custom printed label – preferably in a design that makes your product look appealing.

Effective packaging design can be simple

The overall design is an important element in the success of your products. As we emphasized in our guide on how to start a business, a strong brand identity is more important today than it has ever been.

But, medical cannabis packaging carries a heavier informational burden. Guidelines, which vary state by state, require that your packaging must include dosing information and instructions for safe use, as well as batch numbers and expiration details.

For reference, here is our handy content checklist for cannabis packaging. It is also important to be sure your packaging solutions meet state laws. If you already have packaging for your cannabis and CBD products but are struggling to increase sales, perhaps it’s time to consider rebranding your company and your packaging.

Cannabis packaging should protect the product

When choosing cannabis packaging materials, consider both appearance and function.

The best marketing and package graphics in the world won’t hold much value if the product inside isn’t properly protected.

Child-resistant packaging can look aesthetically pleasing with the right design

Keep the following protection guidelines in mind when developing your custom packaging:

  1. Proper seal: Packaging for products that are not single-use must be resealable and generally should be smell proof. Containers with lids, adhesive closures, ziplock packaging and boxes with interlocking closures are all options – which is right for your product?
  2. Child safety: Packaging must be difficult for children to open – it must be child-resistant (such as pop-top bottles that require some dexterity to open). Packages must adhere to the Poison Prevention Packaging Act.
  3. Tamper evident: Much like over-the-counter drugs, medical cannabis packaging must be designed in such a way that it is evident if the package has been tampered with.
  4. Sturdy materials: Select packaging that is sturdy enough to protect the product inside. Different products will present differing packaging requirements based on the level of protection they require.
  5. Edibles and beverages: States laws involving medical cannabis and consumable products are not created equal. In the states that do allow edibles and infused beverages, the packaging must be opaque.

With all products, it’s important to remember that the package is the first thing people will see. Great packaging design elevates your product and tells a story about who you are as a company.

But medical cannabis packaging must also work to build trust and confidence in the efficacy of your product. Use these strategies to create the best packaging for your product and cannabis customers will buy over and over again.

2020 Cannabis Quality Virtual Conference Series Agenda Announced

By Cannabis Industry Journal Staff
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The agenda for the 2020 Cannabis Quality Virtual Conference Series has been released. The announcement about the annual Cannabis Quality Conference being converted to a virtual series due to the COVID-19 pandemic was made last month. Due to a demand to provide attendees with even more content, the event has been extended a full month and is running through December. Cannabis Industry Journal is the media sponsor.

The event will begin every Tuesday at 12 pm ET, beginning on September 8 and continue through December 22. Each week will feature three educational presentations, two Tech Talks, and a panel discussion. Weekly episodes include cannabinoid research & discovery, cannabis labs, licensing applications, post-election analysis, the Canadian market, hemp quality, HACCP & GMPs, facility design, cultivation technology, safety & compliance, COVID-19’s impact and supply chain quality.

Roy Bingham, Co-Founder & CEO of BDSA, and Nic Easley, Founder and CEO of 3C Consulting , will serve as the keynote speakers on Tuesday, September 8, discussing cannabis market trends and COVID-19’s impact on the cannabis industry.

“Human connection is so important for events, and we know we’re not the only game in town. That’s why we’ve invested in a Conference Virtual Platform that can facilitate discussions, discovery, and connection that can continue whether our event is offline or online—and not end with the live streaming,” says Rick Biros, president of Innovative Publishing. “Simply, the experience other conferences are offering is not conducive to learning, staying engaged or take into consideration that you have a job to do during that week. This is why we have designed the Conference’s program with short, manageable episodes that are highly educational.”

Registration for the 2020 Cannabis Quality Virtual Conference Series is open. Keeping in mind that registrants may not be able to attend every week due to scheduling conflicts, there is an option to watch each session on demand.

Tech Talk Sponsorship

Cannabis Industry JournalCompanies that are interested in sponsoring a 10-minute technical presentation during the series can also submit their abstract through the portal. For pricing information, contact IPC Sales Director RJ Palermo.

Innovative Publishing has also converted the Food Safety Consortium to a virtual event. More information is available at Food Safety Tech.

About Cannabis Industry Journal

Cannabis Industry Journal publishes news, technology, trends, regulations, and expert opinions on cannabis safety, quality, business and cannabis sustainability. We also offer educational, career advancement and networking opportunities to the global cannabis industry. This information exchange is facilitated through ePublishing, digital and live events.

Cannabis Testing Laboratories (CTL) Becomes First ISO-Accredited Hemp Lab in Nebraska

By Cannabis Industry Journal Staff
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In a press release published last week, Cannabis Testing Laboratories (CTL) announced they have achieved ISO 17025 accreditation as part of the Nebraska Department of Agriculture requirements for cannabis labs operating in the state. CTL is a wholly-owned subsidiary of Doane University, a liberal arts college in Crete, Nebraska.

Dr. Arin Sutlief (in back) and Dr. Andrea Holmes preparing samples for cannabinoid analysis by HPLC.

According to the press release, CTL will be renting space on Doane University’s campus for its primary laboratory. Doane University is working on an effort to foster innovation where they create spaces on campus for entrepreneurial startups. Dr. Andrea Holmes, Director of Cannabis Studies and Professor of Chemistry at Doane University, is the founder of CTL.  Dr. Arin Sutlief is the director of the laboratory as well, which means CTL is led by an all-female management team.

Dr. Holmes says hemp testing should be a priority for the state’s new industry. “Being the first ISO-accredited and state approved cannabis testing laboratory in Nebraska will allow farmers, processors, vendors, and even consumers of CBD and hemp products to have local access to high-quality and reliable testing,” says Dr. Holmes. “For farmers, continuous testing is of utmost importance so they don’t grow hemp over 0.3% total THC levels, at which point hemp is categorized as marijuana, which is currently illegal in Nebraska. Consumers of CBD products will also benefit from private testing as oftentimes CBD-infused products don’t actually contain what the label says.”

Hemp weighed for sample preparation for cannabinoid analysis by HPLC.

CTL will operate independently of the university, but the lab will be a resource for faculty and students. There will be internship and experiential learning opportunities available at the lab for students. In addition to that, the lab will also help faculty that teach cannabis-related courses.

Last year, Doane University announced the launch of their Professional Cannabis Certificate Program. In June of this year, the university expanded their course offerings in cannabis, with seven courses available this fall. The addition of CTL to the Crete, Nebraska campus will benefit those new courses and provide more resources to those in the certificate program.

“I am proud to be one of the creators of a fully accredited cannabis testing lab that provides our farmers and processors reliable and quick local testing of hemp,” says Dr. Sutlief. “CTL is among the first ISO-certified cannabis testing labs in the U.S. that is a subsidiary of a university. Innovation, research, entrepreneurship and education will be the central pillars of CTL as we set ourselves apart to become leaders in cannabis testing not only in Nebraska and the Midwest but also nationally.”

The Changing Landscape of CBD in the UK

By Mike Barnes
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Reports estimate that up to 8 million people in the UK use CBD for its variety of wellness benefits. The market is currently worth £300 million, a figure which is expected to more than triple in the next five years.

Sales of CBD already outstrip those of Vitamin C at £301 million vs £119 million and given that almost 90 percent of users in the UK purchase CBD online, new investments into omnichannel and e-commerce capabilities are likely to lead to even more growth.

Yet, for all this excitement, the truth is the UK’s CBD industry is facing a bit of a roadblock.

The structure of cannabidiol (CBD), one of 400 active compounds found in cannabis.

Until this year, CBD has been in a period of regulatory uncertainty and the industry faced understandable criticism when high profile cannabis probes found that over half of the most popular CBD oils did not contain the amount of CBD promised on the label. On February 13, 2020, the Food Standards Agency (FSA) unveiled new plans to better regulate the industry and announced a deadline of March 31, 2021 for the submission of a valid application for novel food licence for businesses selling food and food supplements containing CBD in the UK. Contained in the announcement was a warning to all CBD companies that failure to comply may result in products being taken off the shelves.

Consumers are also advised by the FSA to “think carefully” about taking CBD, and not to consume more than 70mg a day, making the UK the first country in the world to set recommended limits for CBD consumption, despite no scientific basis for the 70mg recommended limit.

Whilst it is undeniable that the CBD market requires some form of regulation and standards need to be raised for CBD products, to ensure consumers are receiving safe, legal and quality products, this will be a complex and costly process. CBD companies, particularly smaller CBD brands, will need to ensure they have the necessary infrastructure, expertise and resources to meet this deadline.

The deadline is fast approaching, and no extension has been granted despite of the difficulties caused by COVID-19. This will put all businesses under pressure, as the process for applying for Novel Food status requires supplying a large amount of data from rigorous testing. For larger players, this will likely be nothing more than a costly inconvenience, but for smaller, nascent businesses, these costs may put their longevity at risk. There are hundreds of CBD start-ups which have done great work to future-proof their businesses and create safe, high-quality products. Now, instead of preserving costs to try and stay afloat during the pandemic, these businesses must put a significant amount of precious resource and funds into finalising their applications in time.

Improving end user confidence in CBD products and understanding the process from seed to shelf is crucially important in this developing industry, however, I firmly believe these regulations are suffocating the market. I fear that on April 1, 2021, many smaller firms who haven’t managed to achieve Novel Food status yet have a superior product, will suddenly find themselves unable to legally trade.

On the other hand, there is the argument that the FSA ruling may increase the importation of CBD products from firms based outside of Europe. So far, the large cannabis firms in North America, which have the budget and expertise to meet FSA standards, have held back on importing CBD products to the UK. This may well have to do with the slightly dubious legal status CBD has so far had in the UK, so it will be interesting to see whether this changes in April next year and which players will enter the market. The CBD market will continue to grow and diversify but it will be essential that this leads to increasing consumer choice rather than confusion.

In my opinion, the only way the UK will be able to fully harness the potential of CBD is to create an independent, self-sufficient industry that not only helps consumers but contributes to the wider economy through jobs, skills and investment. The pandemic has done well to put a spotlight on the huge access issues cannabis patients face in the UK, bolstering the case to ‘onshore’ the industry.

Whilst this would require a streamlining and simplification of the licensing laws around growing cannabis, the development of a UK-based industry would have endless benefits. Not only would medical cannabis patients see improved access to their medication, CBD firms would no longer have to ship oil in from the dominating wholesale nations such as Poland, Czechia and Italy, this in turn having huge economic benefits. The development of a UK industry should involve the creation of a new regulatory system specifically designed for cannabis products and preferably for a new regulatory body, similar to the Office of Medicinal Cannabis in the Netherlands, to oversee all cannabis regulation, licensing, importation and approvals. This would mean a move away from the current solution of forcing CBD products into the Novel Food category and subjecting them to inappropriate regulations which will soon begin to smother the market with unnecessary red tape.

People are increasingly turning to more natural health and wellness solutions, so as Britons become better informed about CBD products and as the market matures, demand will certainly increase. Yet with both Brexit and standardisation of cannabinoid regulations occurring in parallel, the future and scale of the CBD market is still to be determined. A huge UK market could potentially help push it in a positive direction, facilitating processes for CBD producers.

The cannabis industry is resilient and until this point, has managed to grow at an exponential rate despite regulatory uncertainty. As acceptance and demand continues to increase, so the case for an independent UK industry will strengthen and regulatory roadblocks finally overcome.