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CBD: Overseas Distribution and Misrepresentation in the American Market

In recent years, CBD's exponential rise to prominence has become a global movement. The in-demand cannabinoid has led countries around the world to re-examine their existing legal framework surrounding the cannabis plant and work to enter the market. Among those countries working to establish leadership in the CBD industry is China. Despite the country’s strict prohibitions regarding the cultivation and consumption of marijuana, China has positioned itself as a key player working to capitalize on the CBD boom.

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CBD: Overseas Distribution and Misrepresentation in the American Market March 17, 2020
CBD: Overseas Distribution and Misrepresentation in the American Market

While China has a long history of growing cannabis for textile production and utilizing the plant in traditional medicine practices, the formation of the People’s Republic of China in 1949 led to stringent restrictions banning the growth of cannabis regardless of the plants' THC ratio. This included its sister plant, hemp. In 1985, the cultivation of hemp was made illegal, and it wasn't until 2010 that authorities allowed for the outright restriction to be lifted in certain regions, such as in Heilongjiang and Yunnan specifically. These two provinces (of China's 34 regions) have been able to successfully loosen such regulations and permit the cultivation of industrial hemp, encouraging neighboring areas to work towards adapting similar policies. In 2017, Hanma Investment Group became the first company to receive authorization to extract cannabidiol oil, paving the way for others to seek licenses and begin processing hemp for CBD purposes.

In the years that have followed, China has emerged as Asia's largest cultivator and exporter of hemp, accounting for nearly half of the world’s hemp production. However, while there is an underlying tone of optimism regarding the growth of the industry globally, the complicated nature of how CBD is regulated has raised concerns regarding quality and transparency, especially in the United States. In the American market specifically, the misrepresentation of CBD products remains an ongoing issue, with this problem extending to the products being imported from major suppliers such as China.

The U.S. Food and Drug Administration has noted that most CBD products being sold in the country are unregulated and untested, leading to an increase in warnings being issued by the agency to retailers. Currently, CBD falls under a legal grey area in the U.S., making it that much more important for the consumer to conduct their own research when purchasing products. As reported, the FDA's own testing efforts have found that some products do not have the amount of CBD they claim to contain, while others contain toxic metals or pesticides. According to reports, products being imported from China have been found to be largely GMO and contaminated by heavy metals and pollutants. Although it is possible to remove these contaminants and turn the product into pure CBD isolate, the lack of transparency in this process continues to contribute to confusion, uncertainty and possible health risks for the consumer.

Due to the regulatory inconsistencies in enforcement, testing, abundance of cheaply made products and cloudy marketing guidelines, it has become that much more difficult for consumers to navigate making safe CBD purchases. Ultimately, as international distribution increases and the industry continues to grow worldwide, the demand will also increase for clearer legal pathways, cleaner environments and safer agricultural practices.

https://www.grandviewresearch.com/industry-analysis/cannabidiol-cbd-market

https://www.advisory.com/daily-briefing/2019/12/03/cbd

https://www.globenewswire.com/news-release/2020/01/08/1967669/0/en/The-Chinese-Cannabis-Market-and-the-Growth-of-CBD.html

https://www.nytimes.com/2019/05/04/world/asia/china-cannabis-cbd.html

http://www.globaltimes.cn/content/1159846.shtml

https://radiichina.com/cbd-hemp-cannabis-industry-china/

https://www.caixinglobal.com/2019-12-03/exclusive-cbd-oil-sold-on-chinas-e-commerce-platforms-raises-regulation-concerns-101489843.html

https://www.nytimes.com/2019/05/04/world/asia/china-cannabis-cbd.html

https://www.wsj.com/articles/china-lets-its-cannabis-industry-bloom-but-says-no-to-marijuana-11573567906

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CBD: Overseas Distribution and Misrepresentation in the American Market
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In recent years, CBD's exponential rise to prominence has become a global movement. The in-demand cannabinoid has led countries around the world to re-examine their existing legal framework surrounding the cannabis plant and work to enter the market. Among those countries working to establish leadership in the CBD industry is China. Despite the country’s strict prohibitions regarding the cultivation and consumption of marijuana, China has positioned itself as a key player working to capitalize on the CBD boom.
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