CBD Industry Sees "Gold Rush" Amid Uncertain Regulation Retailers across the country have begun to capitalize on the rising popularity of CBD, a newly legalized form of cannabis with alleged calming and pain-relieving properties.
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'Gold Rush': Cannabidiol Industry Booms Amid Uncertain Regulation

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'Gold Rush': Cannabidiol Industry Booms Amid Uncertain Regulation

'Gold Rush': Cannabidiol Industry Booms Amid Uncertain Regulation

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RACHEL MARTIN, HOST:

CBD has become a booming business. You can get CBD added to your coffee, buy lotions or lip balm that contains it. The CBD that you're currently seeing in the store is derived from the hemp plant and doesn't have the same effects as marijuana. This week, the FDA, though, is looking into whether the industry should be regulated. Liam Niemeyer of member station WKMS reports.

(SOUNDBITE OF FILM, "SECOND ACT")

LEAH REMINI: (As Joan) They gave you an apartment? Credit cards?

LIAM NIEMEYER, BYLINE: Shea Castleberry works in a time capsule of sorts.

SHEA CASTLEBERRY: Really cool section. Prequels and sequels.

(SOUNDBITE OF PRICE SCANNER BEEPING)

NIEMEYER: DVD copies of movies, old and new, line the walls of the Family Video store he manages in the college town of Murray, Ky. While other video rental stores went bankrupt, hundreds of family video stores are still around. But movie rentals and popcorn aren't the only thing for sale.

CASTLEBERRY: And a lot of people are like, a video store selling CBD? But it really does tie in to our values, which is, you know, we're here for the community.

NIEMEYER: Castleberry says the CEO of the company found pain relief from CBD and ever since then Family Video stores have carried CBD-infused oil, gummies and lip balm, and water. He says the products not only diversify his store but could give his customers access to something he believes has health benefits. CBD retailers like Family Video are just a small fraction of this CBD investment. New Frontier Data is a Denver-based analytics firm that studies the cannabis industry. It estimates sales of CBD products could triple to more than $1.2 billion by 2022. New companies that extract and process the CBD are also betting big on this industry.

Wow. The smell is even stronger in here.

NATHANIEL PAPE: Yeah. It's present, at least. But it smells good to me, actually (laughter).

NIEMEYER: Nathaniel Pape is chief operating officer of AeroSourceH. He takes me on a tour of his warehouse that kind of smells like pot. The bleach-white laboratory in Kevil, Ky., has $3 million worth of whirring machines and freezers that are turning pungent hemp into purified CBD.

PAPE: It looks just, like, basically a fine, white powder, almost like a flour.

NIEMEYER: A kilogram of this stuff sells for around $6,000. But Pape says the profit is secondary to the help a CBD could provide to users.

PAPE: It is a gold rush, and that's fantastic and it's super exciting, but it's also a little scary because as, you know, in gold rushes, a lot of the people lose.

NIEMEYER: Some of that fear comes from the uncertainty over how the Food and Drug Administration will regulate CBD. The agency currently banned CBD in food products. But that hasn't stopped some businesses from adding it to everything, from lattes to burgers. The FDA will decide whether CBD should be regulated as a dietary supplement that can be added to food products or only accessible by prescription. Kentucky Agriculture Commissioner Ryan Quarles says he wants CBD in food products because of the boost it could give to hemp farmers.

RYAN QUARLES: We acknowledge the FDA has a wide range of what they can do with these potential products, but we ask them to not regulate this growing industry to death.

NIEMEYER: Quarles says he's not sure if hemp can completely replace the state's fading tobacco industry, but he welcomes the almost $18 million Kentucky hemp farmers made last year. For NPR News, I'm Liam Niemeyer in Murray, Ky.

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