Loading summary
Transcript38 lines
- [00:01]
A
From unsolved mysteries to unexplained phenomena, from comedy gold to relationship fails, Amazon Music's got the most ad free top podcasts included with Prime. Because the only thing that should interrupt your listening is, well, nothing. Download the Amazon Music app today. Marketing is hard, but I'll tell you a little secret. It doesn't have to be. Let me point something out. You're listening to a podcast right now, and it's great. You love the host. You seek it out and download it. You listen to it while driving, working out, cooking, even going to the bathroom. Podcasts are a pretty close companion. And this is a podcast ad. Did I get your attention? You can reach great listeners like yourself with podcast advertising from Libsyn Ads. Choose from hundreds of top podcasts offering host endorsements, or run a pre produced ad like this one across thousands of shows. To reach your target audience in their favorite podcasts with Libsyn ad ads, go to Libsynads.com that's L I B S Y N ads.com today.
- [01:05]
B
Over the past decade, many of you have seen or heard about the growth of the hemp industry. But did you know that it is a crop that is deeply ingrained into the history of Kentucky? First planted in Danville in 1775, Kentucky led the country in hemp production. During the 1800s and early 1900s. Even our most famous senator here, Henry Clay, grew hemp on his farm in Lexington. So after decades though, of decline and criminalization of hemp at the state and federal level, slowly but surely, the hemp industry is now making a comeback. Hemp has provided economic opportunity for people and farmers in Kentucky, but it's facing some real challenges at the federal level right now. Today, on this Devil's Cut edition of Truth in the Barrel, we're talking with Carrie Hinkle, Director of National Policy at Bayou City Hemp, to talk about what's going on in the industry. Carrie, welcome.
- [02:07]
C
Hey, Amy, thanks for having me. It's a pleasure to be here. And I'll tell you, it's never a slow day in this crazy world of hemp. So excited to see where we go with this.
- [02:15]
B
Well, actually, I think it's really important for people to just get the sense of what is hemp anyway and why should we care? I know it's really important for Kentucky and we'll talk about that. But like, what is it anyway? Does it help people?
- [02:32]
C
That it does. And you know, I've been in this industry now since before the 2018 farm bill was signed. And I've Seen it mature from when I used to work in a CBD shop and I would sell gross oil to my customers and say, you know, if it tastes bad, it works good kind of thing to where. Now we've evolved into all kinds of form factors and supplement categories and that I can get hemp drinks, hemp topicals, capsules. You name it, hemp's got it. And the idea is that hemp is a supplement that helps people, usually with sleep, anxiety, pain, all kinds of ailments. And it's just a natural alternative for a lot of folks. And when you talk about beverages, it might be an alternative to other substances. It might be like alcohol. When you talk about a tablet, it might be, you know, instead of taking a Xanax to sleep, I might take a CBD capsule or maybe I use a cream on my back after I get done playing basketball.
- [03:29]
B
Does it. Does it relax you? What does it do for you?
- [03:32]
C
Yeah, it depends on the format you take. Right. So if I rub a cream on my elbow, I'm not going to feel less relaxed. Right. And so the complexity of the different form factors is also why we've struggled to get regulation at the federal level that I'm sure we'll touch on. But the general idea is, yes, wellness, anxiety relief, stress relief, all of these are components of cbd, which is the primary, primary ingredient in hemp products. And also the thc, you got to have both to have some kind of desired effect.
- [04:02]
B
Okay. And this is a crop that was really important for Kentucky, and there was some regulation that was tried to happen at the federal level around 2018 in the farm Bill. And can you talk a little bit about that, why regulation is so important and what was done in 2018 and kind of bring us to where we're at today?
- [04:28]
C
Yeah. So actually, in 2014, we had a pilot program in the Farm Bill, which allowed some states, like Kentucky, to. To do a test with, through colleges and universities of doing trials. And can we plant it? What results from it? It's kind of dipping our toe in the water. And then 2018, they completely descheduled hemp. As long as it was under 0.3% of Delta 9 THC in the field, you could grow this crop. And Kentucky is important with tobacco farmers, too. We had a lot of tobacco farmers switch over to grow hemp. And that's Primarily why Mitch McConnell was one of the biggest champions of this, and he's flipped that switch.
- [05:04]
B
Now, Carrie, what is descheduling mean for those of us that don't follow this yeah, yeah.
- [05:10]
C
And I've been doing it so long. Forgive me, sometimes I say these words like they're common knowledge. And so I'm glad you're giving me the breaks here. So right now, you know, marijuana is a Schedule 1 drug. So it is looked at in the same vein as heroin or other harmful narcotics, and that it would have no deemed medical benefit. Well, hemp, again, in the field, at under 0.3%, was still a Schedule 1 drug in 2018 until the farm Bill was signed. And so by descheduling it, you open up interstate commerce so that you can ship products across the country, you open up research opportunities, and really, you've created what's now a $28 billion industry, thanks to the definition of hemp in the 2018 farm bill. And it's been an interesting, like, free market experience experiment. And that, you know, the way that that bill was written, you can manipulate products to have different amounts of THC in them. And so we've seen some products have way too high of limits, and states have come in to regulate those milligram limits, to regulate the packaging, the testing, the manufacturing standard. States like Kentucky have really stepped up, absent federal regulation. And, you know, again, you'll have different things like a beverage or a topical or a tincture that are going to do different things. And so we've all seen over seven, eight years now, like, what a market maturity looks like to have descheduled THC. And we're coming around to this idea that really 5 milligram beverages are really freaking popular. Actually, today on January 27th, United center in Chicago just announced that they're going to carry 5 milligram hemp THC beverages. So the largest arena in the country today announced they're going to start carrying these products. And we're going to see that develop more and more across the country, I think so, Carrie.
- [07:00]
B
So what happened is we have this new market, you get rid of the scheduling, you have this new market for Kentucky for farmers, growing promising market, promising industry, but at the federal level, not fully regulated. Can you talk about that a little bit?
- [07:25]
C
Yeah, it's really tricky, Especially the company I work for. We're a manufacturer, so we create our own products, labels, etc. And so right now, ever since the 2018 farm bill passed, like the day after, the FDA commissioner at the time said, we do not have the ability to regulate hemp products. You know, under the current DSHEA law, which is responsible for regulating dietary supplements, they have a narrow view of certain form factors that can be considered A dietary supplement. But as we've touched on, hip products have so many different form factors that Congress hasn't been able to properly regulate this product. And so absent that federal regulation, a few politicians like Senator McConnell have decided to use a few bad actors and try to throw the entire baby out with the bathwater. And so right now we are facing a November 13 ban date. And so this year, on November 13, if absent an extension or regulatory bills that are being proposed that I'm happy to get into, this industry is going to go away, but it's not going to, you know, be, it's not like consumers are going to stop getting their hands on these products. It's really just going to funnel black market and you know, drug people that are never going to check IDs and make sure they're making the products the right way, like this is truly on and going to hurt good operators in the space. And it's in part due to FDA not regulating and in part because Congress never told FDA how to regulate it.
- [08:52]
B
It's like this idea of when you go and you buy something, I believe in America we should know what we're buying. We should know. We should. And we have some laws on this for things that you buy, you go and you buy a can of Coke and you know, okay, there's this much sugar in here, there's this much of other things and that's kind of, that's government regulation. But from what I hear from you is there's, there's not that happening right now. And so when you talk about there are a few bad actors out there, what does that mean?
- [09:31]
C
There has been some self regulatory from the industry. Right. Like I have my can here. We have all the ingredients listed, we have third party testing. There's a QR code on the product. So you use your phone, use a QR code, it'll take you to a testing landing page that shows you it's been tested for heavy metals and microbials and all the things you don't want in your product. Right. So we do those third party independent testing and labeling standards because we want to be good actors. The bad actors are a lot of them are actually coming in from China too. It's very unfortunate because hemp has been a very unique American success story, especially on the manufacturing side. You know, we have 100 employees and we're creating manufacturing jobs. And to see that go away is really disheartening. And absent that, you're just going to get more products that look like Oreos or skittles that have thousands of milligrams of THC that are clearly appealing to children and again, I've heard them called like stonios. Right. That kind of thing. This industry does not want, because we want to be in the United center where the Blackhawks and the Bulls play. We want to be in those big mainstream retail markets. And if they continue to shine light on the bad actors rather than the 90% of us doing it the right way, like it's really tricky to navigate. So if we could just get a few baselines at the federal level that don't wipe out this industry and instead have a clear level headed approach to this. Now that's asking a lot of Congress to have a clear level headed approach. But you know, my job and well,
- [11:06]
B
a lot of people want to think of regulation as bad for business. That's not necessarily true. You can't have a thriving business if people don't trust the product. And so I feel like this is really important and I'm curious as to why in this last year. Right. It was last year in which the funding bill for the federal government included some language to basically get rid of this entire industry. Like, why did that happen?
- [11:41]
C
Yeah, you know, it's, it's rare I go to DC once a month to work the Hill on this topic. And it's, it's rare. Like when I go into an office, I, I lead with like I'm here to make it harder to sell my products. Right. Most companies don't go to D.C. and say, make it harder for me to sell my product. But that's what we as an industry have been asking for. And so you know why this happened. You know, Senator McConnell will point to the bad actors that we've covered. I would point to. There's plenty of good actors too. Way more in fact, you know, I, I, I'm not much of a tinfoil hat guy, Amy, but you know, and I understand that this is a bourbon podcast, but you know, they, he has
- [12:18]
B
given, well, we drink bourbon sometimes.
- [12:21]
C
Yes, yes.
- [12:22]
B
That doesn't mean we are experts in
- [12:24]
C
it, but I will happily enjoy, you know, a glass of Woodford as well. You know, just as much as the next Kentuckian. But you know, they have given a lot of money to the senator and discus is one of the trade associations. When the ban went through that they represent the bourbon industry, they released a one pager in support of it. So, you know, tariffs and declining consumer trends are things that they may not be able to control, but competition is one of them. And you know, we're speaking in January. Folks are drinking less in part because I can go to Liquor Barn and get a 5 milligram beverage, drink it, have a good night's sleep and wake up not hungover. That's a pretty cool feeling to know. And so, you know, some of that is just direct competition. Some of it, again, is appropriately trying to weed out some of these bad actors that we as an industry would agree. Let's get rid of. Rid of them as well.
- [13:15]
B
There's just, you would think you would be able to weed out the bad actors without throwing the rest of the good actors over the side of the boat. Are there any lawmakers right now, Kerry, that have been supportive of what you're talking about?
- [13:34]
C
Yeah. So right now there's a few bills in Congress that are going to help address this issue. So one, we have Jim Baird from Indiana and Angie Craig from Minnesota. They have a House bill. And then Klobuchar and Senator Rand Paul have a Senate bill. And they would extend this band date instead of November 13th of this year, they would kick it two extra years down the road to 2028. And the reason we need that extension is to then address the regulatory issues. And that would be done by Congressman Morgan Griffith, who's from Virginia, and his counterpart on that is Mark Vesey from Texas. And so that bill is going to sit in the Energy and Commerce Committee, which is the perfect committee as they have jurisdiction over the FDA. It is a 57 page bill that is quite long for a discussion draft in Congress. Right. Most discussion drafts are a few pages. This is 57 pages long. And it speaks to the complexity of how you deal with USDA covering the plant and the farm side. What does FDA do on topicals and tinctures? What does TTB do with beverages? And are we selling them like how we sell alcohol and the labeling and manufacturing, all of these things are very complex. And so that's why we need the extension is because we then need time for the gears of Congress to grind as we've been trying for seven years to get this. I don't think we'll get it done in seven months. And so by getting the extension, it then allows Congress to work through some of these nuance issues and appropriately regulate us. Every weekend when I go to my Total Wine in Lexington, there's another shelf that's got THC beverages there, right? And you go to Liquor Barn and All Party Mart in every store. And that's just unique to Kentucky because our beverages right now are restricted to Only liquor store sales and other states like Minnesota, they allow for on premise consumption at the bar. And so, you know, you can do one where you get a wristband and if you've been served alcohol, you only get alcohol. And if you've been served a THC beverage, you only get that. And there's insurance. And this is an industry that's being propped up in real time and kind of, I mentioned that free market experience, like that's what we're seeing right now as we play out and we're kind of writing the rules as we go along. But the consumer demand is there. And I just think, I hate to use the phrase too big to fail, but as more and more people get used to taking these drinks and get used to the familiarity of these products, the last thing they want is government overreach and saying what they can and can't do. And so we're really adults.
- [16:04]
B
And I think I've seen these beverages at various sporting events that I have attended. To be honest, I have not partaken in one. But is there a, an age? Do you have to be 21 to purchase these?
- [16:20]
C
Yeah, yeah. Again, and that's where some of the state ranks have come in. Right. So yes, state by State, all 21 for the most part. And it really speaks to the issue of when the 2018 farm bill passed, they legalized it in the field and then they never figured out what to do on the finished goods. And absent that, states have had to step up, companies have had to self regulate, and we're all kind of playing this game of who's responsible and who's not and how do you figure out who's trustworthy and who's not? And early on it was really tricky. I would say in the seven years since this all kind of started, we've really honed in on what products consumers want, how to do it and manufacture it properly. And now we just need the federal government to catch up to where the industry's at.
- [17:03]
B
Kerry, what part of the federal government's going to do this? Is it, is it the FDA that does this?
- [17:09]
C
Yeah, for some of the form factors. So that's the topical. So you know that's the FDC Act. Right. That's what Morgan Griffiths bill would cover. So yes, FDA would be responsible for the primary regulatory issues of it, but there's also aspect here with Griffiths Bill that's important, especially in a Republican Congress, is that it does keep intact states rights. And so, you know, when we speak with like Senator Bozeman, who's chair of the Ag Committee and his state of Arkansas has banned him and he wants Arkansas to have hemp banned. And you know, having that states rights aspect is going to be important here because we're just going to have to navigate as, you know, as alcohol sales are. Right. In some states you can buy it cold, some, some states the liquor store can't be connected to the grocery store or some, you know, there's these weird nuances. I'm from Indiana originally. You couldn't buy alcohol on Sundays. Right. And so it's going to be a little bit like that. Right. Where each state is going to be a little different. We're going to have dry counties, wet counties, that kind of stuff. Right. It's okay for the states to figure it out. They're better at the day to day regulatory, but it's about the federal government just propping up some basic guidelines that we can all agree on and then letting the states kind of handle some of the measures.
- [18:16]
B
I gotcha.
- [18:17]
C
So.
- [18:17]
B
And in the cases of alcohol, there are some rules states seem to be able to have out there in terms of purchasing, when they can purchase what stores, all that. Even when you go and you buy a bottle of bourbon, you know, in Indiana it might be restricted in certain counties or you know, even in Kentucky you might not be able to get it in certain areas.
- [18:40]
C
Yeah, you know, it's, it's, you know, relevant to 100 years where prohibition with alcohol was broken. Right. And we needed to have some standards that caught up to people making the stuff in their basement. And you know, absent the federal government doing anything here, like federal manufacturing, labeling and testing guidelines, companies have stepped up and states have stepped up. But again like all of this goes away if we don't change what McConnell put in that continuing resolution. And right now it's even, it's a little in the weeds, the lack of a pun for you. But you know, in the, in the bill it says that you cannot have 0.4 milligrams of THC in your product. You cannot exceed that, but you also cannot manufacture outside of the plant. Well, in order for me as a manufacturer to extract my CBD and then strip away the thc, Amy, I have to manufacture outside of the plant. So even if I got to this made up product that Mitch McConnell wants me to get to, I have to break the law by manufacturing outside of the plant. So it doesn't make any sense to, to real life business and farming implications. And it's really short sighted. And especially our farming partners, they are Buying seeds right now and they don't know if what they plant in the ground is going to be legal in six months. And so our farmers are going to be the ones that get help. You know, hurt the worst on this if we can't get this extension and then some kind of regulatory solution down the road.
- [20:02]
B
Are you hopeful right now for this extension? Are you hopeful for the, the industry? You think we're going to get through this?
- [20:09]
C
I mean, we have to, right? I like to joke, Congress has ADHD and they only look at the shiny thing that's right in front of them. And so, you know, thanks to McConnell and Andy Harris from, from Maryland, who was his House counterpart on this, we are that shiny thing. So each day we're getting new co sponsors on the, on the Baird and Craig extension. On the House side. Right now our biggest challenge is finding a Senate Republican other than Rand Paul that's going to really stick their neck out for us. And so that's our challenge as an industry, is finding some, some more allies on that side of the aisle. But again, it just doesn't feel like it makes a lot of sense to throw away a $28 billion American made industry. It feels like there's a better way here. I wish you were in office now. It'd be great to work with you now.
- [20:56]
B
Well, awesome to talk with you. I really learned a lot about this. I've known a little bit about hemp years, but it's, I think a lot of listeners have heard of it and maybe seen the, the cans, you know, in the grocery store or whatever. But it's really great to talk with you.
- [21:13]
C
Yeah, never a slow day. If we would have had the conversation a week from now, we probably would have had a whole different thing to talk about. So. But it was great and I really appreciate you having me on, Amy.
- [21:21]
B
Well, awesome. Well, cheers to you and to your community and we'll, we'll keep working to get the word out.
- [21:28]
C
Okay, cheers. We'll see you.
- [21:29]
B
All right.