The future is green: hemp’s potential as a ‘super’ ingredient

Big business takes an interest in cannabidiol, despite regulatory hurdles

One of the principle obstacles to the progression of hemp and related cannabidiol products is continued industry hang-ups about the relationship to drugs. In spite of increasing legalisation of cannabis and associated products, we are still a fair way from full acceptance. In particular, there is notable disparity between various regulatory bodies over how to treat cannabidiol products; in the US, the Food and Drug Administration (FDA) has (as of October) yet to approve any cannabidiol products other than an epilepsy drug. Things grow murkier as there are various and frequently fluctuating allowances made at the state level. In general however, although such products still have to contend with a fair amount of regulatory obfuscation, the hemp and cannabidiol market is steadily gaining ground.

It was reported in September that Coca-Cola is in “serious talks” with Aurora Cannabis to create a drink using cannabidiol, likely aimed at wellness or recovery. A spokesman for Coca-Cola told BNN Bloomberg that, “along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly. No decisions have been made at this time.” The report, despite the lack of any real confirmation, gave a 16.86% boost to Aurora’s stocks and signalled that cannabidiol is no longer the sole preserve of dispensaries and smaller business; if the world’s largest beverage company is showing interest, this is now big business.

In the Whole Foods distribution network, hundreds of stores now carry Colorado-based Evo Hemp’s Hemp Bar. Evo Hemp also has a distribution deal signed with 122 H-E-B supermarkets, making its total availability reach more than 4,000 outlets across the US. According to Hemp Business Journal, the hemp industry is estimated to grow to $1.8bn in sales by 2020 on the back of hemp food, body care, and CBD-based products. With the support of big companies, in spite of the regulatory difficulties, the industry has massive growth potential.

Positioning as a superfood snack amid Australian opportunities 

In November 2017, Australia’s Food Standards Code was updated to legalise “low THC” hemp seeds for human consumption; in essence, the market was opened up to hemp food and drink producers. One such company, Hemp Foods Australia, was responsible for more than A$2m in revenue for the first half of 2018. The company produces a variety of products, perhaps likely to become foremost of which is their Organic Essential Hemp Snack Bar. The snack perhaps exemplifies the portrayal of hemp as an emerging health product, advertised as being organic, dairy and gluten free, non GMO, vegan, paleo, containing no added sugar, no artificial colours, flavours or preservatives, and containing both protein and Omega 3, 6 and 9.

“Since hemp was legalised as a food in November 2017, we have been committed to creating a convenience product that showcases hemp in all its glory and doesn’t lose any of its nutritional benefits by undergoing any heating,” says Hemp Foods Australia General Manager, Felipe Favaro on the company’s website. 

Those nutritional benefits are likely to the primary driver for hemp food products, allowing producers to target not only the health trend but also consumers with dietary restrictions or pursuing alternative diets. Rising health consciousness is one of the prevailing trends in the food industry: according to GlobalData’s Foodservice Survey 2017, 45% of global consumers ‘aim to find the healthiest food or drink options’ when eating out.  Containing nine essential amino acids and three essential fatty acids, hemp’s claims to help with cholesterol, inflammation and allergies could help position it as a superfood snack.

In addition, according to a September 2014 report from YouGov, 22% of the UK population consider themselves to have a food allergy or intolerance. Although not all hemp food products will follow the exact same formula as Hemp Foods Australia, paying attention to their positioning of the snack bar as allergen friendly as well as broadly healthy could pay dividends. Not only are those with dietary restrictions likely to be more generally interested in a product that shows ingredient attentiveness but increased sensitivities to the environmental impacts of sectors such as dairy could lead to a rise in consumers looking for options such as dairy-free. 

2018 Farm Bill promises a fertile future for hemp in the US

As mentioned, hemp occupies a strange space legally and can often be subject to varying regulations and mismatched legislature by region. In the US, hemp’s relation to marijuana has seen it federally limited in provisions for growing and distribution; at the state level there are allowances for growing the crop but under restricted conditions. For example, the 2014 Farm Bill authorised states to approve hemp cultivation but only if done so “for purposes of research conducted under an agricultural pilot program or other agricultural or academic research” and only if it is “allowed under the laws of the State in which such institution of higher education or State department of agriculture is located and such research occurs.”

However, with the FDA yet to approve any of cannabidiol’s health claims, a key product of hemp cultivation is currently in a legal grey area. The broader restrictions prevent what could be a leading crop in areas such as Minnesota from reaching its potential, in spite of the rapidly growing market for hemp-derived products. Yet that could be about to change if an upcoming version of the 2018 Farm Bill, containing language that removes hemp from the federal list of Schedule 1 controlled substances, passes. Freed from federal restrictions would legitimise hemp’s distance from its recreational cousin and open the doors for wide-scale industrialisation.

Moreover, although there is a movement to separate perceptions of hemp from cannabis, there is a chance for the ingredient to get the jump on cannabis and some of its positive attention. Although full federal cannabis legalisation is likely still some way off, a survey from ATKearney found that 78% of American consumers would try cannabis-infused products and that infused food was by far the most popular format. By offering up a legalised alternative, with shared associations of wellness, hemp product manufacturers can position themselves at the forefront of a demand that is only set to grow.