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The Marketing Potential and Legal Issues of Hemp

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It might sound promising to use hemp extracts as ingredients on a certain food, but this can also pose problems for food manufacturers. The laws regarding the use of hemp require that the product adheres to the regulations imposed by the US Food and Drug Administration.

Now that the 2018 Farm Bill has been approved, hemp and its derivatives are legal in the US. This is the low-THC component of the cannabis plant that’s used in manufacturing clothing, lotions, food products, and beauty products. However, some Los Angeles based hemp attorneys are aware that there are still lots of legal and regulatory concerns surrounding the cultivation, distribution, and marketing of hemp.

High-Risk Ingredient

Investors of cannabis-based companies still view hemp as a high-risk ingredient. Marijuana and hemp are both components of the cannabis plant. However, hemp contains a very small amount of the THC, the chemical compound in cannabis that’s responsible for the psychoactive effects that it gives to the users. Anything that has more than 0.3 percent of THC is considered marijuana, but less than that is hemp.

According to industry experts, the hemp industry in the US is expected to reach $500 million by 2020 and the global market is predicted to reach $2 billion. Hemp-based foods are a growth opportunity in the industry.

Legal Pitfalls Are Tricky

The legal pitfalls in the hemp’s food and beverage industry can be especially tricky as they are expected to adhere to the stringent standards required in food production, labeling, packaging, distribution, and marketing. In some cases, some attorneys view this as an advantage, especially for those companies that are already aware of how the bureaucratic process works. On the other hand, the marriage between food and hemp brings with it a whole new level of regulation.

There are now several hemp-derived products that have been used in the food and beverage market. Reports indicate that there will be a surge in the number of investors who are exploring investment opportunities in the area. In fact, the president of one company based in Colorado has said that there’s now a wide acceptance and there’s a good chance that there will be a high uptick in the products that have fused hemp with certain foods and beverages. Among these are sports drinks, ready to drink coffee, energy bars, protein shakes, burgers, tea, water, frozen desserts etc.

Proper Labeling of Hemp-Derived Products

Among the biggest concerns that hemp manufacturers are faced with are the parameters set by the US Food and Drugs Administration. Before, most hemp products came from other countries such as China, Europe, and Canada.

Now that the US is in the game, manufacturers of hemp-derived products have to be meticulous with how they label the products. Even a simple mistake on the label could cost the company millions in lawsuits and fines. Not to mention marketing lawsuits, that are said to cost the company up to $100 million if the plaintiff wins. If the company is proven to have intentionally provided false information on the label, they could be charged with a felony that’s punishable with imprisonment.

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