Hemp-derived cannabidiol (CBD) seems to be landing on shelves everywhere, but marketing and safety standards associated with over-the-counter CBD products remain open-ended.
Without regulation from the U.S. Food and Drug Administration (FDA), consumers often don’t know the quality of the CBD products they’re buying. But hemp-related CBD companies may have an opportunity to make their brands stand out to ecologically conscious consumers through organic certification from the U.S. Department of Agriculture (USDA).
According to the USDA, consumer demand for organically produced goods has shown double-digit growth during most years since the 1990s, providing potential market incentives for U.S. farmers across a broad range of products. Since the Agricultural Improvement Act of 2018 (the 2018 Farm Bill), that broad range of products also includes hemp.
An increasing number of consumers would rather buy an organic product than a non-organic product if they’re next to each other and their prices aren’t outstandingly different, according to Kim Stuck, the CEO of Allay Consulting, which she founded in 2017 to help guide companies through the hazards of cannabis and hemp industries by navigating compliance pitfalls and ensuring best practices. With offices in Portland and Denver, one of the services Allay Consulting provides is steering hemp cultivation and manufacturing operations through the process of USDA organic certification.
Providing its services in all 50 states, the majority of Allay Consulting’s clients come from hemp-related companies, Stuck said. Unlike cannabis a psilocybin, which are not federally legal, hemp and its derivatives, including CBD products, lend themselves to organic certification because the USDA recognizes hemp as a crop that can be an organic crop, she said.
A former regulator in the wholesale food and restaurant industry, Stuck entered the cannabis and hemp space in 2014, when she took on a role as a public health investigator specializing in cannabis and hemp in the Denver Department of Public Health and Environment. She inspected cultivation facilities, infused-product facilities and dispensaries, and created regulations, shelf-stability approvals of products and reliable source investigations.
In addition to serving on several industry advisory boards, Stuck has been a member of ASTM International’s cannabis standards committee since its 2017 inception.
Here, Stuck shares more about why hemp-related companies may want to explore USDA organic certification and what they need to know before they do.
Editor’s Note: This interview has been edited for style, length and clarity.
Tony Lange: How did the hemp compliance consulting marketplace take shape following the 2018 Farm Bill?
Kim Stuck: Well, it got a lot busier, to say the least. When I was a regulator in Denver, I audited and inspected CBD companies. I was already into the hemp industry before I even started consulting. When it comes to the FDA, Occupational Safety and Health Administration (OSHA), fire-code compliance and those kinds of things, CBD and tetrahydrocannabinol (THC) have very similar sets of regulations. They have the same kind of issues, the same processes most of the time and things like that. We already were working with CBD clients at that point. Really, we just got a lot busier because a lot of people went, “Oh my gosh, we can actually do this. Hemp is legal now, let’s go for it.” And a lot of people who are in the hemp industry maybe didn’t previously own businesses, or businesses that were regulated this way, because hemp is very highly regulated.
TL: How can organic certification for hemp cultivation and manufacturing help CBD companies build out their customer bases?
KS: In the hemp industry, I don’t know if people know this all the time, but it’s not only the plants that have to be USDA organic, but the manufacturing facilities also have to have a USDA organic certification as well, in order to have a product like a tincture or an edible be certified organic. I think a lot of consumers would rather buy those products … and it helps the overall brand of the company because usually companies that want to be organic are also taking care of the planet more. So, there are so many ways that organic certification can affect the way that a company is viewed by consumers.
Also, we all know organic products are more expensive because it does cost more money to be at that organic level in your manufacturing and in your cultivation. There is always a little bit of a price tag associated with that.
TL: Organic cultivation practices include compliance with pesticide and fertilizer standards, but what does the extraction or manufacturing certification side of the hemp industry entail to be considered organic?
KS: I can’t go through all of them because it would take forever, but mainly it’s a lot of cleaning and sanitizing standards. It’s also testing of ingredients before being used and making sure there aren’t contaminants. If you’re buying CBD oil, or even flour or sugar, you need to test those components to make sure that there aren’t any contaminants or toxins in those things. And then also the facility has to be built and things have to be implemented in a certain way to prevent cross-contamination between organic and non-organic ingredients. Even equipment and oils used in the machines have certain standards. There’s a lot to think about with organic certification. Your staff also has to be trained a very particular way. You have to keep logs and documentation about everything, batch number systems; it really can get very complicated, but once it’s implemented and you’re used to it, it’s just like a normal day every day.
TL: Is it a difficult process for hemp-related companies to become organic certified?
KS: It can be, yes, because there’s a lot of training. Each accredited certifying body—they’re the people who come in and do the actual certification audit for you—all of them are a little different and require different things. They do give you guidance documents to follow, things you have to do or change in your facility, but a lot of that can be really difficult to understand. And I think that’s where compliance consultants can be useful, when it comes to navigating certain standards. And then compliance consultants can move forward and write all of the documentation and standard operating procures (SOPs) for training staff to exactly the standard that an accredited certifying body would want to see.
So, it can be very complicated. There are around 60 documents that have to be written and in place at a facility before organic certification can even happen. And a lot of people aren’t aware of the heavy lift when it comes to those SOPs and documentation, and then the training on top of that. But for the most part, once everything is implemented, it’s very easy.
TL: Is that “heavy lift” one of the key points that hemp company executives need to know before they pursue the necessary paths to becoming USDA organic certified?
KS: Yes, it’s that understanding that there’s a workload up front and that this is not something that’s going to happen overnight. Usually, we have to change a lot of things and rewrite a lot of SOPs. And it is a lot of paperwork and filling things out and then submitting them. So, just realizing that there is a heavy lift to be able to become organic certified. But it’s totally doable. It’s not like completely out of the realm of possibility. I’m not trying to scare people off, but it is definitely a little bit of a workload.
TL: Do you have a ballpark estimate for what percentage of hemp-related companies in the U.S. are currently USDA organic certified?
KS: I actually don’t. It’s not a lot. When it comes to hemp cultivations, there’s a lot more, I would say like maybe 30% of cultivations are USDA organic. But when it comes to manufacturers, that’s actually kind of a new thing to the industry. The USDA has allowed that since the 2018 Farm Bill was passed, but a lot of manufacturers don’t even know that they can get it.
TL: State departments of agriculture have lists of approved pesticides for hemp, but some of those approved pesticides are not considered USDA organic, correct?
KS: That is 100% correct. Even if an agricultural department says, “Hey, this is approved to be used on cannabis or hemp plants,” that does not mean that that pesticide is organic. They are not talking about organic standards at all. That’s just them allowing that pesticide to be used. So, that’s another thing that hemp companies have to go through is checking everything in their facility, all their fertilizers, you know, they have to test their water even to make sure there’s no contaminants. Then you can get organic certification once all of your pesticides and fertilizers and chemicals in the facility are checked off. Even certain sanitizers can’t be used in an organic facility versus inorganic.
TL: Once a hemp-related company is USDA organic certified, does that alleviate any of its compliance concerns?
KS: Usually if you’re following organic certification, if something does become contaminated, you notice it very quickly and can handle it in house, instead of something going out and then you having to do a recall and tarnish your name in that way.
Organic certification will help overall with regulatory issues, but it doesn’t mean that the FDA or the USDA is going to come visit you less often. They have regular inspections, but usually, and this is coming from an ex-regulator, if I would walk into a facility I’m about to investigate or audit and it’s USDA organic certified, I know right away that this is probably going to be an easier audit. I know that there are things that are in place that are going to protect people, and I maybe won’t dig as deeply as I normally would. And that is always a good thing. It just puts a regulator at ease when a company is already going above and beyond.
TL: If the FDA approves CBD as an over-the-counter dietary supplement, would companies that are USDA organic certified have a leg up in compliance and their ability to grow their brands in the marketplace?
KS: Well, I think it’s a little too early to tell, but in my personal opinion, any certification that’s above and beyond the regulations that are already in place is going to give you a leg up. If they say, “Hey, only these certain types of products are allowed,” there is an argument to say, “Hey, our company has really gone out of our way. We got these certifications, and so is there a way that we can work this out?” There’s always an argument to be made for any company that’s going above and beyond, especially when it comes to consumer safety. It always looks good. I think even in the legislation period and when rules are being written and made, keeping that in mind is always good.