The hemp space represents one of the most exciting, yet most volatile facets of legal cannabis. While hemp was federally legalized in 2018, certain cannabinoids such as CBD remain in a legal “gray area.” Therefore, CBD companies are operating without clear direction from the FDA. In like fashion, the industrial hemp space struggles to find its footing while we wait for hemp-derived materials to gain mainstream acceptance.
With the hemp industry constantly in flux, consumers are ultimately the ones who suffer. As there is little consistency with Good Manufacturing Practices (GMP) in hemp, poor quality hemp products pervade the marketplace.
To help you avoid such problems, we’re here to show you exactly where hemp products come from. Ideally, by learning about the hemp supply chain, you can make informed purchasing decisions.
What is the Hemp Supply Chain?
Whether it be CBD products or textiles made from hemp, the supply chain is similar. A supply chain is defined as “the entire process of making and selling commercial goods, including every stage from the supply of materials and the manufacture of goods through to their distribution and sale.” The hemp supply chain is comprised of all the people, activities, information, and resources that come between planting a seed (or plant start) and the final sale of a hemp product.
The hemp supply chain can be traced through the cultivation, processing, and sale of any hemp product on the market today. If you enjoy CBD gummies as a way to relax at the end of the day, you can trace their production through the supply chain. Similarly, lumber products, animal bedding, and textiles made from industrial hemp have undergone their own journey through the supply chain.
Handling the Product from Farm to Consumer
The hemp industry as we know it was born in a legal grey area. Today, it is often overlooked that the 2014 Farm Bill legalized hemp cultivation for “research purposes.” This legal loophole gave rise to the CBD industry in the United States. The industry as we know it today is largely built on this random patchwork of businesses that operated without regulation. While hemp was officially legalized with the 2018 Farm Bill, we are still waiting on official guidance from FDA for a national CBD industry.
The confusing history of legal hemp in the United States further speaks to the necessity of understanding the hemp supply chain.
Hemp must be grown and processed in compliance with both state laws. This means meeting requirements for THC levels and product purity. Yet, this process gets easily confused in different state markets. To illustrate, it is legal to sell full-spectrum CBD extracts in Colorado – as long as they contain less than 0.3% THC. However, full-spectrum CBD extracts are illegal in Idaho because they contain trace amounts of THC.
Thankfully, production standards are rising as hemp continues to gain momentum in the mainstream. A common practice among state regulators is to visit hemp farms and test for THC potency. In other regions, flowers and plant materials are tested for impurities such as mold and pesticides.
While GMPs are on the rise across the hemp industry, there is still a good deal of shady operators in the industry today. The internet is awash with stories of people purchasing fake, or even poisonous, CBD products. Therefore, it is always a good idea to carefully research where your hemp products come from.
Hemp Supply Chain Inputs
Inputs represent the beginning of the supply chain. Concerning hemp, inputs are associated with farm work, including the labor, materials, info, and time needed to grow crops. In essence, hemp supply chain inputs bring crops from the seed phase (or plant start) to harvest. This phase of the supply chain also includes the technology and equipment required to grow hemp on a commercial scale.
Hemp supply chain inputs include:
- Hemp seeds and plant starts
- Nutrients, amendments, soil
- Integrated Pest Management (IPM) strategy
- Garden security
- Farm equipment
- Irrigation supplies
- Cultivation software & technology
- Greenhouse infrastructure
- Employees/labor: managers, technicians, seasonal workers
Importantly, the quality standards of hemp begin at the hemp farm. The sort of care and attention farmers give their crops will be reflected in the overall quality of a finished product. This notion rings true for CBD products as well as materials made from industrial hemp.
Understanding the Hemp Supply Chain
The rest of the hemp supply chain process includes the steps required to take a hemp product to market. After raw plant material leaves a hemp farm, it often exchanges hands many times before finally being processed and sold.
Primary businesses in the hemp supply chain include:
- Transportation businesses
- 3rd party testing labs
- Storage companies
- Extraction labs
- Edibles manufacturers
- Vape companies
- Textiles producers
- Paper manufacturers
- Sales teams
While many hemp businesses operate within a single step of the supply chain, this is not always the case. This notion leads us to the topic of vertical integration.
Vertically integrated hemp businesses handle their own products from the time seeds are planted in the ground until the products are finally sold. For example, a vertically integrated CBD edibles company would grow their own hemp, extract cannabinoids, infuse edibles, package goods, and finally sell the product. Even more, they would have a marketing team to develop their brand and salespeople to get their product to market.
The hemp supply chain is generally not vertically integrated. Coupled with a lack of centralized quality control from the USDA or FDA, the number of different parties involved in the hemp supply chain can cause big problems for the consumer. Namely, because all it takes is one weak link in the chain and the consumer gets a poor product.
Seed-to-Sale Control Over Hemp Products
The hemp supply chain is a highly complex orchestration that involves many moving parts. The fact that the hemp industry is brand new and loosely regulated by individual states leaves room for poor business practices — even deceitful behavior. To circumvent many of the systemic issues with the hemp supply chain, forward-looking hemp companies are turning to vertical integration.
By controlling their products entirely from “seed to shelf,” hemp companies ensure that their customers get the best quality possible. Even more, this practice allows hemp companies to self-regulate quality control more efficiently without full guidance from the FDA and USDA.
Whether you are interested in CBD flowers or materials made from industrial hemp, the modern hemp industry is extremely intricate. In the end, going with a trusted, vertically integrated hemp brand is the best way to ensure you get your hands on high-quality products.
At High Grade Hemp Seed, we are diligent about working with hemp farmers who share our vision for quality and sustainability in the industry. We are proud to say that we sell hemp seeds to several vertically integrated hemp businesses and we are part of a growing hemp eco-system with Santa Fe Farms.