If you are a Hemp processor producing cannabinoids, your growth in this expanding market will depend upon your innovation, marketing savvy, and most critically, your unwavering commitment to making the highest quality cannabinoids and not necessarily at the lowest cost.
Due to the diversity of different cannabinoids found in the industrial hemp plant, processors will continue to introduce products that hyper-concentrate the over 100 minor cannabinoids found in the hemp plant. Formulations focusing on cannabinol (CBN), cannabigerol (CBG), and other compounds and mixes will be developed for specific use cases.
Holding up investment in more equipment is the difficulty in obtaining financing and acquisition due to the illegality of these products at the federal level, i.e., CBD and all other derivatives. Many states in the U.S. have also decided that these products cannot be added to foods or sold as dietary supplements and follow the federal (FDA) rules. The ability to market CBD as a safe and effective substance is limited by how the FDA classifies it. The U.S. Congress has the authority to address these issues, and current legislation has been introduced. The Safe Banking Act of 2021, https://bit.ly/3JLNlez and the Hemp and Hemp-Derived CBD Consumer Protection and Market Stabilization Act of 2021 https://bit.ly/3GPWLUo and the Hemp Access and Consumer Safety Act. https://bit.ly/3rSDQnK
Such is the current state of affairs for the smaller manufacturers. So let’s come back to your unwavering conviction that “Quality is Job 1,” which Ford used as their slogan in the 1980s. It ran for 17 years. This was when the Japanese carmakers were making the American cars look like “Clunkers.” It was classic Darwinian evolution as the lean and technologically advantaged Japanese car companies just gobbled up global market share.
Proving Quality in the global market and here in the U.S. for Hemp processors is also a significant investment. Amazon and the large chain retailers want to know that your operations are high Quality. They insist that you have an accredited 3rd party cGMP or SQF (Safe Quality Food) certification.
It is expensive, and it needs to be budgeted to the tune of approximately $10,000 – $12,000 per year.
So essentially, $ 1,000 per month in additional overhead.
An opportunity investment.
Being a supplier to the global market will more than pay for the ongoing certification cost….way more. If you have an ingestible Cannabinoid brand made from a 3rd-party manufacturer, not having this certification will keep you out of one of the fastest-growing markets globally, not to mention your increasing revenue chances here in the U.S. It is only a matter of time when CBD and the cannabinoid markets are regulated, and laws are on the books to increase the flow of investment capital. It is then that the companies that have paid their dues in regulatory and compliance costs will reap their just rewards, and the non-compliant companies will struggle to survive as Darwinism again takes hold and only the fittest companies survive.
I write and create the nuts and bolts of cGMP and SQF compliant programs at an affordable cost to specialized hemp processors and dietary supplement manufacturers.