The First Drop: Is This Fully Baked

You can’t always judge the state of things by what you see at Trade Shows, but if you roll it up with the rest of the buzz from investors, media, and even the regulatory environment, it’s pretty clear that the cannabinoid compound CBD is having a moment.

Long the quiet Teller to THC’s voluble Penn, the potential of CBD as a new functional ingredient has compelled hundreds of new food and beverage brands in an effort to test the waters. No less a strategic than the Coca-Cola Co. made waves (and likely millions of bucks for daytraders) when it was reported that it had been eyeing the CBD market.

Of course, the bitter irony of the whole CBD market is that it’s being let out of the barn by none other than Mitch McConnell, the Senate Majority Leader and national buzzkill. It’s McConnell who nevertheless insisted that the most recent Farm Bill include a clause that freed up domestic hemp production – and made even more quasi-legal the CBD that can be squeezed out of it.

So what makes CBD so attractive, especially knowing that so many of the dorm room legalization conversations out there have been about the business that can be built around the buzz-imparting elements of hemp relative marijuana? After all, it’s the beer companies who have led the way on the marijuana business up until now, as they worry about getting outflanked by those seeking a new kind of inebriation.

For starters, there’s the potential that CBD, unlike so many other functional ingredients, can have short-lead efficacy. For some, it clears up muscle soreness or fights a migraine in a timely manner, creating functionality at a speed close to caffeine, salt, alcohol or probiotics. And there’s no sitting around waiting to die to try to figure out if, like antioxidants, you’ve added years to your life; there’s not a lot of time spent wondering if the ashwaganda and reishi are taking your energy to the next level or if it’s just that you’re generally drinking something healthier that’s got you feeling sprightly.

That’s not to say that CBD is only a pain reliever – or that it works as one for everyone, for that matter. In fact, the purported range of healing uses of the stuff rivals only the Fountain of Youth for potential functional effect, even while the scientific proof points remain more the stuff of legend than anything demonstrated in double-blind placebo studies.

But that uncertainty is as much of a downside as an upside: As any number of high-ORAC value antioxidant product makers will tell you, if your product is said to do too much, chances are it’s going to fall short somewhere in the market. That’s also what has hampered probiotics over the years as well – sure, you know what they’re doing in the short term, but long-term it can be harder to prove that healthy bacteria in your gut might have led you from the depths of depression.

Still, if the numbers lie sometimes, the promise of numbers doesn’t, and those numbers have been huge. Estimates for sales by 2020 are ranging between $2 and $3 billion for the CBD market overall – and if you haven’t been counting, 2020 is a little more than a year away.

I’m not going to focus on short term challenges like the need for clarity on shipping and distribution regulation. The drive in the industry is so strong right now, and the infrastructure itself so adaptable, that once supply and methodology are established, those barriers will fall. It’s as easy an experiment in national legalization as medical marijuana has been for many states – that is, a safe-looking, non-psychoactive step that still doesn’t look like Congress is handing out rolling papers.

But the bigger challenge for everyone looking to fill bottles and cans with CBD extract is that this stuff better deliver. While there’s less than complete knowledge about what it does, you know how THC makes you feel. Without that pervasive buzz, though, I worry that whatever benefit consumers anticipate deriving from CBD will prove negligible compared to the anticipation of the market. People don’t yet have enough of the studies to confirm what it does, the short-term physical effects don’t all come out the same way due to vast differences in extraction methods and dosage amounts, and there isn’t anything close to a set of best practices available to those who are trying to establish functionality.

If energy isn’t put into developing good scientific studies, consistent results, and a proposition that can be fulfilled for consumers, CBD products will join a list of homeopathic remedies that start with ginseng and stretch around the world. Think about it this way: the antioxidant benefits of coffee are legendary, and of course you love the taste. There are huge potential regenerative agriculture benefits in the hemp business, as well. But how much of a global economic force would coffee be if it didn’t have caffeine? That’s the degree of difference the industry faces.

So in the race for the cash – and make no mistake, I certainly think it’s one worth running – let’s just try to make sure we’ve mapped out a proper course.