“We have been doing CBD formulations and full spectrum hemp oils for about four years now,” Virun CEO Philip Bromley told NutraIngredients-USA.
Farm Bill opens floodgates
Like many in the hemp/CBD space, Bromley said he has observed a huge uptick in interest since the details of the now-enacted Farm Bill started to become clear last year. This legislation removed hemp from the schedule one list of controlled substances maintained by the Drug Enforcement Administration.
Among the things that this has done is to remove most of the uncertainty about the legality of the trade in the seeds of the plant. Early on in the recent history of hemp production in the United States, say about three or four years ago, growers were reporting difficulty in obtaining adequate suppliers of seeds.
When these materials crossed state lines, they were subject to seizure by DEA. At that time, the whole plant was on the schedule one list, not just THC, its psychoactive fraction. So growers in states like Colorado were restricted to some degree to building up their acreage by saving seeds from year to year and trading them grower to grower within the state.
Now, regardless of what FDA has to say on the matter, a land-rush mentality has started to take hold, Bromley said. Brands are scrambling to lay the ground work for products containing CBD or full spectrum phytocannabinoids so that they don’t miss the window.
“The business has grown so much in the past year that we wanted to separate out that capability and make it an entity of its own,” Bromley said.
Making it make sense for the market
The new division is called Nuriv, which puzzle aficionados will immediately recognize as Virun spelled backwards. Bromley said the company was looking for something catchy to connect to CBD without having to go through an extensive trademark search.
“The way trademarks are these days, you almost have to go for a nonsense word,” he said.
The standalone division will help market Virun’s CBD capabilities in a more forthright way, he said. Not that the market was having much trouble figuring this out for itself beforehand. Bromley said he has been fielding multiple calls a week about CBD formulation. Many of the callers are first-time contacts, he said.
“I don’t know how these people find us. I guess by Google search,” he said.
Bromley said the new division will have access to the supply chain Virun has built up over the past couple of years. That includes hemp materials that have GRAS status.
“I think the future of a lot of these CBD brands will be to go the self-affirmed GRAS route. I think if the FDA were to come in and look at the products we are making for clients, their primary concern would be safety. We use materials that have good safety profiles,” he said.
Bromley said much of the expertise that Virun has built up in preparing fat soluble or otherwise hard to disperse ingredients for beverage formulations will be useful in the CBD realm. Clear beverage applications in particular can be a challenge for raw materials like a full spectrum phytocannabinoid oil, which might contain many dozens of different cannabinoids.
Shift in market toward big brands
Bromley said major—and as yet unnamed—CPG players are starting to stake a claim in the CBD space. As these kinds of companies get involved in the market, he said he expects some of the early participants to fall by the wayside.
This will be to the ultimate benefit of the market, he said. Up to now it has required a practiced eye to separate the players from the pretenders.
“You won’t see products from those kind of companies for four or five years yet, but they are coming. Up to now, so many of the people I talk to seem as if they had been a used car salesman just before they decided to get into the CBD market,” he said.