[ad_1]
Just below rows of energy and kombucha drinks at Westside Market, a deli in the Chelsea neighborhood of Manhattan, sit a few glass bottles of Vybes. The drink, which comes in flavors like strawberry lavender and blood orange lime, is made with cannabidiol, more commonly known as CBD.
But a lack of federal rules and a mishmash of state regulations have made it impossible for Vybes to be distributed by a national retailer, like Target or Walmart. That has hindered the potential growth for the drink, said Jonathan Eppers, who left the technology industry to create Vybes in 2018.
“For the first two years, we were riding a rocket ship,” Mr. Eppers said. “But the patchwork of laws and regulations around the space has made it tough to grow our business.”
A little more than six years ago, CBD, the nonintoxicating component that is derived from cannabis or hemp, was poised to be the next big “it” ingredient, part of a wave of beverages and foods that were promoted as having healthful benefits or providing relaxation. Start-ups flooded the market with products, many promising to soothe stressed-out and anxious consumers.
At its apex around 2018, CBD was everywhere, appearing in water, chocolate bars, tinctures, gummies and skin serums. Consumers could buy athleisure apparel infused with CBD oil and feed their nervous pups CBD chews and snacks. Big corporations even jumped in. Molson Coors teamed up with a Canadian cannabis firm to create a line of CBD-infused drinks. Constellation Brands, the maker of Modelo beer, made a $4 billion investment in a publicly traded cannabis company. Ben & Jerry’s began looking into creating CBD-infused ice cream.
In the last couple of years, however, the industry has stalled out. Molson Coors ended its joint venture, and Constellation has written down more than a $1 billion of its cannabis investments. Large companies have shelved plans for CBD products, and hundreds of start-ups have either shut down, shifted to other ingredients or simply tempered their growth projections.
Hopes for resuscitation of the market through efforts by the industry to put federal regulation of CBD into a new farm bill were dashed when Congress passed an extension of the 2018 version of the bill in the fall.
Also contributing to the precipitous fall of the industry is the simple fact that many people are befuddled by what CBD is, whether it is legal and if it will get them high.
The compound comes from the cannabis plant. Cannabis plants that contain high levels of tetrahydrocannabinol, or THC, are marijuana and can get users high. Cannabis plants with lower levels of THC are known as hemp.
Five years ago, Congress legalized hemp-based CBD, though CBD made with higher levels of THC remained illegal at the federal level. But the Food and Drug Administration has declined to create rules allowing CBD to be used in dietary supplements or conventional foods. The agency said that a new regulatory pathway for CBD must be created and that there was not enough evidence to determine how much of it could be consumed and for how long. (The F.D.A. has approved one drug that contains CBD and is used to treat some epileptic seizures.)
Like marijuana, which remains illegal at the federal level, CBD has been legalized by many states, creating a morass of varying rules and problems for manufacturers.
“I saw the writing on the wall in late 2019 and 2020. It was going to take a lot longer for federal regulations to be established around CBD,” said Ben Witte, who founded Recess in 2018 as a line of sparkling water containing CBD. Today, those drinks make up less than 10 percent of his revenue. He focuses instead on mocktails and Recess Mood, a line of non-CBD relaxation drinks.
Even before hemp-based CBD was legalized, stores and online retailers were flooded with products containing it. But none of them had been approved by the F.D.A., and some touted outrageous and unsubstantiated claims that the infused products could do everything from treating Alzheimer’s disease to curing cancer.
The F.D.A. began issuing warning letters to manufacturers and retailers for selling unapproved CBD products or making unsupported claims around the products. In 2020, the F.D.A. found in a sampling of products that 18 percent contained significantly less CBD than indicated on the packaging while 37 percent had significantly more.
“I think the bigger question here is why do you need to have it in food at all?” said Dr. Peter Lurie, president and executive director of the watchdog group Center for Science in the Public Interest. “What is the purpose? What is it that this ingredient is actually doing for you?”
He added, “These companies have managed to create a belief that society needs these products when there’s no evidence that says CBD treats anything more than the rare epileptic syndrome it has been approved for.”
As questions about the compound rose, state regulators began pulling CBD products off store shelves and confiscating products. Companies also ran into obstacles selling or advertising online.
“My account on Meta is forever banned from making any advertising after I posted once under our company’s page about our CBD products and it was flagged,” said Clarice Coppolino, head of branding and product development for Vital Leaf, which makes CBD chocolate, skin care and tinctures.
The Covid-19 pandemic also took a toll on the industry. While sales in the early weeks and months of the pandemic soared as nervous consumers sought relief through CBD-infused products, the interest among large companies and investors fell off.
“Covid clearly shifted consumer packaged goods companies away from the CBD space and what was possible there to focusing on simply meeting food demand,” said Carmen Brace, a consultant who worked with companies that sell consumer packaged goods.
Amid heavy industry lobbying, some states began legalizing hemp in various products. In 2021, for instance, California passed legislation that allowed hemp-derived CBD in any food, beverage and dietary supplement sold in the state. Other states legalized CBD with restrictions on the types of products it could be used in, the amounts and where the hemp had to be grown.
Mr. Eppers started Vybes after trying CBD oil to relieve the stress and anxiety he felt while working in the tech industry. The product drew a following in its first two years, but around 2020 California regulators began to pull the drinks off shelves. So Mr. Eppers banded with other CBD manufacturers to push laws allowing the product in the state.
But the confusing hodgepodge of rules has hindered Vybes’ growth. “We make a drink that a lot of consumers want, but the big chains won’t touch it,” Mr. Eppers said.
For now, Vybes, made with 25 milligrams of hemp CBD, has found a home in smaller regional and independent grocers around the country, Mr. Eppers said.
“When I got into this category in 2018, the sky was the limit,” he said. “Nobody starts a business to hit a low ceiling.”
[ad_2]
