As the Green Rush gains momentum, it’s a good time to be a seller of CBD oil and other hemp-based products, especially since the signing of the 2018 Farm Bill, which legalized industrial hemp on a federal level. However, as companies are ramping up to capitalize on this marketing opportunity, there remain many questions about warehousing and shipping CBD oil and other hemp-based products.
We’ve put together this review to help you determine what’s possible and permissible right now based on our own experience as a CBD fulfillment provider, as well as recent conversations with transportation carriers and trade association officials.
More questions than answers
When it comes to marketing, packaging and shipping CBD products, some of the most important guidelines have yet to be ironed out, while others can be easy to misinterpret, including:
- Can local or state officials prohibit or restrict delivery of CBD oil and other hemp products in their areas now that CBD has been legalized on a national level?
- Do CBD and other hemp products require special parcel packaging or shipping protocols – and are these subject to change?
- Which states seem to be more CBD friendly than others – and how does this impact logistics activities such as inbound shipping, warehousing and fulfillment?
On July 12, the FDA’s Acting Chief Information Officer promised timely answers to some of these concerns, tweeting that, “[the] FDA is expediting its work to address the many questions about cannabidiol (CBD).” Here are links to recent articles from the FDA:
As CBD laws and regulations are ironed out, state by state, one thing is certain: You still have a business to run – and CBD /hemp products that you need to store, fulfill and ship as efficiently and compliantly as possible.
That’s where this Q&A comes in.
What’s exactly are CBD, hemp and cannabis? And how are they different from marijuana?
Hemp and marijuana are both part of the cannabis sativa plant. But they are actually two distinct species of that plant.
Hemp is one type of cannabis plant – one that’s known for producing very high levels of the chemical CBD, which is known (among other things) for its anti-inflammatory qualities and other healing properties.
By contrast, marijuana is another type of cannabis plant altogether – one that contains high levels of the chemical tetrahydrocannabinol, which is also known as THC. It is THC that is known for producing that well-known “high.”
Because the hemp species of cannabis plant products is so high in CBD, it’s become the main source of CBD products, including CBD oil. (Hemp does contain THC, but only in very small amounts.)
By contrast, because the marijuana species of cannabis plant is so low in CBD, it is rarely if ever used to produce CBD products.
Of course, the other big difference is, the hemp plant is now legal at the federal level, while marijuana is not.
Can all of the national U.S. parcel carriers (DHL, Fed Ex, UPS and the USPS) ship CBD oil and other hemp products?
All of them can, but as of this writing only three do.
UPS, DHL and the U.S. Postal Service all allow customers to ship CBD oils and other products provided they meet the following criteria:
- All products shipped must contain less than a 0.3% THC level (anything more is considered by the government to be marijuana, which would make shipping it illegal)
- Shippers must ensure they’re compliant with all federal, state and local laws, including those pertaining to the production, processing, distribution and sales of hemp
- Shippers must maintain compliance documentation that shows they’re compliant with the above laws for two years
DHL also requires that all hemp shipments be sent in a box that does not contain any branding or labeling that reveals what’s inside the package.
Per the latest from FedEx, CBD is a prohibited item right now.
Doesn’t the USPS also require some additional documentation?
For a while, the USPS required all companies shipping CBD oil to include a signed statement printed on their letterhead that committed them to the False Statements Act. But as of the most recent guidelines, which were released June 6, 2019, this is no longer a requirement.
If the Farm Bill says that hemp-derived CBD is now legal, why are we still hearing stories about the seizure of packages or truckloads containing hemp in some states?
Even though the Farm Bill now permits industrial hemp nationwide, it doesn’t supersede any state or local laws. And much like some local municipalities have laws prohibiting the sale of alcohol (despite its longtime legal status), some states or cities still can – and do – exercise strong restrictions against the sale or transportation of hemp within their borders.
Other states are more amenable to working with hemp businesses in general, which is something to keep in mind as you choose the most optimal locations for your CBD fulfillment operations.
From a retail perspective, how many states are actually hemp- and CBD-friendly?
According to research compiled by a major hemp retailer, approximately half of all U.S. states are hemp-friendly to some degree because they have laws in place that either allow retailers to sell hemp products or they’ve made a legal distinction between Farm Bill-compliant hemp and marijuana. Meanwhile, approximately 18 states lie somewhere in the middle, because their laws neither explicitly prohibit the retail sale of industrial hemp nor have any exemptions in place that officially say they consider hemp-derived products to be legal.
But perhaps most important to your business, eight states lie in the zone of concern because of recent law enforcement or legislative activities, including Alabama, Arizona, California, Michigan, Nevada, South Dakota, and West Virginia.
Bear in mind, however, that this landscape is constantly changing, so we encourage you to monitor the latest reports from key lobbying and industry groups such as the National Hemp Association or from leading hemp industry news outlets – or to consult one of the industry’s compliance experts.
For another perspective on the same question (one that also includes the latest on which states have embraced the legalization of hemp’s famous cousin, marijuana,), check out this interactive map from the National Cannabis Industry Association or this overview of state-by-state hemp statutes from the National Conference Of State Legislatures.
Do CBD oils and other hemp products require special material handling, parcel handling or fulfillment protocols and are these subject to change?
It depends on whether or not the CBD or hemp product you’re selling is ingestible. Currently, the FDA forbids the use of CBD in ingestible products such as food and dietary supplements. But the Hemp Industry Daily reports that the FDA has only sporadically enforced its ban, and some states have given CBD manufacturers express permission to make and sell CBD foods, drinks and dietary supplements.
Yes, it’s confusing.
In general, food-grade products need to be stored at a food-grade warehousing facility, which is a special breed of distribution center that’s subject to higher standards of maintenance and cleanliness. The facility should also have advanced systems that enable inventory management protocols like first in/first out and the ability to trace a product location in case there is a problem or recall.
As a general rule, we also recommend that companies consider adopting some of the smart practices that are often used for the shipping of high-value products – including use of tamper-proof packaging materials, and working with providers whose employees have been carefully screened and background checked. In addition, it makes sense to use a warehouse and fulfillment partner that already has experience working with CBD products, especially as the regulatory landscape continues to shift.
It also might be smart to consider housing your product with a third-party logistics provider (3PL) that can provide value-added services like product kitting and packaging. That way if federal, state or local authorities require you to make a modification to your product packaging or labeling, these 3PLs can switch your packaging out in the warehouse rather than having to ship it back to you so you can do the same.
And yes, all requirements for storing and shipping CDB oil and other CBD-infused products are indeed subject to change. This is, after all, the hemp/CBD industry.
Marketing claims and labeling compliance
The FDA is paying close attention to CBD product manufacturers that make unsubstantiated claims about treating diseases or medical conditions. In fact, in July 2019 the FDA issued a warning letter to a manufacturer for selling unapproved products on line.
As for labeling requirements for your CBD product, the proper approach depends on many factors, including container size, serving size and marketing claims. New Hope Network has a useful article on how to label your CBD product correctly.
From a logistics perspective, what else do CBD/hemp businesses need to know?
When it comes to shipping CBD oils and related products, we’ll continue to see changes as federal and state authorities define their regulatory stance. Amware Fulfillment will continue to closely monitor the landscape, and we’ll share updates with you as circumstances merit.