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NEW YORK, July 11, 2019 /PRNewswire/ -- When the United Kingdom's National Health Service (NHS) made cannabidiols (CBD) legal for medical use in November 2018, the health and wellness applications put in place for the benefit of British consumers seemed nearly boundless. With the rapid growth of the CBD product market, it's becoming more and more important that consumers avoid poor quality products from unregulated, and often unreputable, sources. This means that trusted industry producers such as StillCanna (CSE:STIL) (OTCPK:SCNNF), OrganiGram Holdings (TSXV:OGI) (NASDAQ:OGI), Canopy Growth Corp (TSX: WEED) (NYSE: CGC), Aleafia Health (TSX:ALEF) (OTCQX:ALEAF), and The Green Organic Dutchman Holdings (TSX:TGOD) (OTCQX:TGODF) are set to be forerunners in the market.
Recent reports of low-quality CBD merchandise offering little to no medicinal benefits and containing harmful pesticides have dominated headlines across the UK. The cannabis for these products is typically grown in Northern China, where it absorbs "airborne pollutants and smog-like black dust" before being processed and shipped into the European market. As the UK currently relies on imports for nearly all of its CBD needs — bringing in more CBD from China than anywhere else —British customers are currently at risk of consuming low-quality, toxic CBD products if they aren't careful about which company they buy from.
StillCanna (CSE:STIL.CN) (OTCPK:SCNNF) CEO Jason Dussault considers these low-quality products to be part of a "wild west" consumer market, wherein customers "sometimes end up buying products that contain such little CBD they have no meaningful therapeutic effect."
"People are being cheated at the expense of their health and wellbeing," he said. "Consumers are at risk due to the lack of transparency as to the origin of many questionable CBD products."
Dussault goes on to say that there simply are not sufficient quality controls placed on CBD-derived products to guarantee the public's safety.
Quality Products Come from Smart Relationships
StillCanna (STIL.CN-SCNNF) is currently making preparations to begin harvesting its proprietary hemp strain from more than 3706 acres in Poland with legacy hemp production experts Olimax that they recently acquired . That strain has an assured CBD consistency of 7+%, and StillCanna controls its product from "seed to shelf," so there's no risk of hemp contamination like there is from other, less trustworthy sources.
OrganiGram Holdings (TSX-V:OGI) (NASDAQ:OGI) is another business that's putting every effort into ensuring that it delivers only top-notch CBD-derived products. The company recently closed a deal with Eviana Health Corporation, a Serbian-based creator of organic CBD from "natural hemp strains of cannabis sativa." Because Eviana is a vertically-integrated company that sees its CBD through all stages of production, they can guarantee its quality.
For CBD customers looking to ensure they are buying quality products, it's usually a safe bet to go with the biggest name in the industry. Canopy Growth Corp (TSX: WEED) (NYSE: CGC), Canada's largest cannabis corporation, has been expanding into Europe just as consumers are in dire need of a trusted brand. Last year it partnered with Beckley Canopy Therapeutics, a drug research firm from the UK, to bring its medicinal products to Britain. Just this May, Canopy acquired Germany's C3 Cannabinoid Compound Co. in order to become the leading pharmaceutical option in the European CBD market.
Toronto-based Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) recently received a permit from Health Canada to export its medicinal cannabis to Australia, marking its first international product sale. The company's chairman, Julian Fantino, says this is just the beginning for its international expansion. Additionally, Aleafia will be bringing its commercially-proven CBD oils to the German market through a joint-venture with Acnos Pharma GmbH. With a population of 82 million, Germany—the second most populated country in Europe—promises to become a major destination for cannabidiol producers. Just last year, a Bank of Montreal report projected that the nation's medical cannabis market will reach revenues of $5 billion in 2025.
Also getting in on the German market is The Green Organic Dutchman Holdings (TSX:TGOD) (OTCQX:TGODF) whose subsidiary, HemPoland, entered into an agreement with Mediakos to distribute its premium hemp CBD brand to German pharmacies. Commenting on the deal, Nikolas Primbas, CEO of Mediakos, said that TGOD's organic certification for its brand CannabiGold will be "an important point of differentiation" from other producers, which will "resonate with German consumers".
If Germany experiences the same deluge of low-grade CBD products that UK consumers are currently dealing with, this will no doubt prove true.
More Growth in the Industry Means More Regulation Is Needed
The assurance of high-quality cultivation is more important for CBD than almost any other crop, as the hemp plant is famous for its bioaccumulation. This means that it sucks up a ton of chemicals from both the soil and the air, which—if producers aren't extremely careful—leads to a contaminated, low-quality, potentially dangerous product.
StillCanna (STIL-SCNNF) and its contemporaries are going to be taking advantage of their ability to stock Grade-A CBD on the shelves of Europe and North America by establishing themselves as brands that consumers can trust. Together, they'll be producing high-quality, high-margin CBD oils, capsules, and sprays, as well as topical creams, pharmaceuticals, nutraceuticals, and all kinds of other health products. This will put them in control of the CBD market, which the Brightfield Group estimates will become a $22 billion sector in just three years.
As more data like this becomes available, StillCanna CEO Jason Dussault's warning about the lack of quality controls on CBD-derived products seems even more prescient. Just as the UK government has yet to take action regulating the wave of substandard CBD products coming into the country from China, the Food and Drug Administration does not closely monitor the CBD market in the US, leading to an epidemic of products being mislabelled.
According to a 2017 study of 84 CBD extract products, taken from 31 different companies, the Journal of the American Medical Association found that 22 products contained less CBD than was advertised on the label. Essentially, this means that any claims of medicinal properties offered by those 22 products could not be considered reliable. A further 36 products contained more than labeled, which is not as considerable a concern, but can potentially still lead to users becoming unwittingly intoxicated.
These are shocking figures, especially considering that 7% of Americans are now taking CBD in some form, a number that could be as high as 10% by 2025. If quality controls aren't soon established to help customers differentiate trustworthy producers from untrustworthy ones, tens of thousands of people could be cheated out of the medicinal benefits that they pay for when they purchase CBD.
Consumers Need to Learn About the Right Brands to Buy From
The old mantra—location, location, location—is as true for cultivators and manufacturers of CBD-derived products as it is for anyone else. If a company is growing its hemp in a place with a lot of pollution, or a place where growers are using pesticides on their crops, those chemicals will be passed directly to the consumer.
StillCanna (STIL.CN-SCNNF) CEO Jason Dussault helpfully points consumers towards requesting third-party lab results for the products they buy, so as to ensure they aren't putting toxins into their bodies. Studying these independent reports allows buyers to get a first-hand understanding of which products offer genuine medicine benefits, and which products simply don't hold up.
"There's no putting the genie back in the bottle now," said Dussault. "Patients are increasingly using CBD oils freely for both medically documented ailments and self-diagnosed health issues. So too is anyone who just wants to make CBD a key ingredient for a healthy, holistic lifestyle."
Other partnerships yielding dependable hemp-derived products include OrganiGram Holdings' (TSXV:OGI) (NASDAQ:OGI) deal with Serbian-based Eviana, which will allow OrganiGram to feed Europe's demand for high-grade CBD. Also targeting Europe is Canopy Growth, who burst onto the scene in Britain and Germany to provide top of the line medicinal products.
Aleafia Health (TSX:ALEF) (OTCQX:ALEAF) is expanding into both Australia and Germany, the former via its own exports and the latter through a joint venture with Acnos Pharma GmbH. It's not the only one taking advantage of the increasingly hungry German market, as The Green Organic Dutchman Holdings (TSX:TGOD) (OTCQX:TGODF) is teaming with Mediakos to place its CBD brand CannabiGold in pharmacies Germany-wide.
As toxic CBD pours from China into Europe, and especially into the UK, these companies will be able to alleviate consumer demand for high-quality CBD products.
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