Can Hemp Survive The Ban? | Trade to Black

[00:00:01]Everybody, TDR Trade to Black Podcast bringing you more coverage here in Chicago at the Ignited Capital Conference. Jim Higdon from Cornbread.

[00:00:09]Good to see you.

[00:00:10]>> Shout, thanks for having me.

[00:00:11]>> We get along, everybody. This is a good thing. There's a lot of misconceptions about hemp and cannabis, but you're one of the good guys.

[00:00:18]>> I appreciate that. Like there's a lot of misconceptions and also like several different lanes in the hemp world and the corrective nature of getting rid of the bad actors is, you know, gone too far and I'm here to represent the supplement lane, the beverage lane to make sure that, you know, like interstate commerce for THC remains a viable pathway for maturing cannabis industry writ large.

[00:00:38]>> You and I had a good conversation off camera last night. We talked a lot of things about what could be in store.

[00:00:44]We're seeing that this hemp ban's probably going to take an effect in November 12th. A lot of change on the way, but there could be change come the new calendar year potentially. Do you want to elaborate off of that?

[00:00:55]>> Yeah, look, we've taken three shots on goal this year so far. We've we've we've we've missed all three of them. We still have the White House on our side. White House issued a statement earlier this month saying at a minimum they want full spectrum CBD legalized one way or another come November. So, there's still an opportunity with the White House support to get to get something done. We got one shot left. Everyone's looking.

[00:01:16]Like September 30th is kind of too late, but it's the one shot we've got. Um, and then if it goes dark in November, I've been told by multiple staff that on the Senate side that this can be worked out in the next Congress.

[00:01:33]And whether that's how quickly we can do that means a lot because if we're just in a 6-week, 2-month dark phase and and jump start back up in in in January, it's a a painful scenario to contemplate that we want to avoid, but it's not a death sentence.

[00:01:53]>> What makes you feel like next Congress someone when they read between the lines here, they could say, "Well, that's when Mitch McConnell eventually obviously retires." Is that the case and could there be a different stance on a lot of stuff when you refer to the next Congress?

[00:02:09]>> Congress is a body made up of What is it? 535 people.

[00:02:13]>> Yep.

[00:02:14]>> We have two people standing in the way of us getting us a solution here. One in the House and one in the Senate.

[00:02:21]In the next Congress, the person in the Senate will be gone.

[00:02:24]And the person in the House will not have a gavel given the Polymarket odds.

[00:02:29]>> Right.

[00:02:30]>> And so our problems, those two problems get solved in in January. Not to say we wouldn't have additional new problems in that scenario, but those two problems in all likelihood go away.

[00:02:43]>> Now, we've had this conversation a lot lately with Michael Bronstein from Attached and we trying to get an idea as to like what is going on in the hemp space right now. What is the messaging?

[00:02:52]Is every to be all everyone aligned right now? You're one of the companies within the space that has been doing things the right way. What is actually happening inside right now and the message that's going to happen in Washington? Like what are the rightful changes that need to be happen that you all can agree on something?

[00:03:07]>> Well, I mean, you know, we've all seen the BAR bill, a couple different versions of the BAR bill as as, you know, like preliminary amendments to first the farm bill and then ag props through substantial revisions in both instances. And those um revisions are ongoing and so we hope to see a BAR bill soon with a prominent Democratic co-sponsor. That would really sort of chart the path for a responsible hemp industry that's taxed appropriately and regulated appropriately and granting us access to interstate commerce, which is the next step of growth for the entire cannabis industry.

[00:03:42]And the cannabis industry needs to understand that full maturation of the industry involves interstate commerce and full descheduling, regulated like alcohol. In in my view the adult use market can't survive schedule three.

[00:03:56]Schedule three is the kill box.

[00:03:58]Tobacco and pharmaceutical companies will pick it apart.

[00:04:02]If you if it stays in schedule three, the only path forward is descheduled and regulated like alcohol and right now the hemp industry has a template to get that done so that the full cannabis industry can lay over top of that and we're working we're working to do that.

[00:04:16]>> So you think rescheduling is not enough, descheduling has to take into place. But you look at rescheduling that's been announced so far, what has that done for your side of the business and how much has that changed things in some ways?

[00:04:28]>> I mean it's moved the needle and you know changed what's like you know politics is always the art of the possible and rescheduling increases what may be possible.

[00:04:35]You know the idea that cannabis would be scheduled out of schedule one was you know completely unthinkable. I was just reminded a little while ago here that at the what was Benzinga last year in Chicago, the idea of rescheduling was was was was a crazy thought. No one would no one think about it. Now we're on the other side of that. So things move rapidly.

[00:04:57]What was unthinkable is now a done deal and we're still moving in a rapidly evolving chaotic situation and what once was impossible, you know now might not be.

[00:05:07]>> You and I again talked last night. I said to you I think there's going to be a beverage carve out eventually and you brought up the idea of supplements and supplements is actually on the radar of members or certain members of Congress as being the most important thing. Do you want to elaborate and share with our audience what you meant by that?

[00:05:25]>> Sure. So it's not just members of Congress, the White House has the you know like has listening listening very closely to Howard Kessler and his desire to to get this Medicare pilot program operational at 3 milligrams of THC per serving. So the 3 milligrams of THC per serving is the model for that supplement lane and the White House is behind it.

[00:05:47]Members of Congress are behind it. And um And that, along with the beverage lane, is what I believe is the path forward for the hemp space. Providing, again, a a roadmap for descheduling interstate commerce for the adult use cannabis industry.

[00:06:04]>> When you talk about a roadmap, have you ever thought and stopped and looked how both industries basically are going to survive? Not I want to say survive, but the hemp industry right now is under a lot of fire. You have an pending hemp ban coming up November 12th. But ideally, what is a realistic timeframe or even about more for that infrastructure look like for both industries to succeed?

[00:06:24]>> Well, I mean Contemplating what a next year looks like with rescheduling, hearings on descheduling, and hemp products in interstate commerce, it sets the stage for an omnibus cannabis legislative product that can define all of these lanes once and for all. Like, we're in a spot where this time next year we could be talking about an omnibus cannabis bill.

[00:06:52]And that's where all these lanes will get sorted out.

[00:06:55]>> What needs to change in the hemp industry? Cuz we talk about this a lot.

[00:06:58]The synthetic THCA, this is happening everywhere. Not the proper testing, not the right the labeling, all that stuff needs to change. What needs to happen on your side that you talk amongst, you know, your fellow colleagues within that side of the business as to Are there any kind of common ground or agreement that Yeah, we need to separate ourselves in some of the bad actors?

[00:07:18]>> There's definitely been some sorting in the in the um the trade associations. Uh you know, we've been associated at Cornbread with the US Hemp Roundtable since the beginning of our company. And we feel like the Hemp Roundtable has made a very positive um move in a very positive direction. We're no longer advocating for um synthetics like Delta 8. We're no longer advocating for THCA flower. Other groups are doing those things and we're letting that sorting process happen so that members of Congress can see that the supplement brands inside of the Hemp Roundtable are looking for one lane and we're not looking for smokable hemp flower. We're not looking for high dose beverages, any high dose products, you know, vape products or anything like that.

[00:08:03]We're looking for the you know, very narrow specific lanes with milligram caps that are reasonable. And so, you know, with that we feel like we can demonstrate to the greater cannabis industry that we're not a threat to their customer base because the supplement customer is not a dispensary customer. The low dose beverage customer is not a dispensary customer. And while it is certainly the case that smokable hemp products and smokable hemp companies have caused a lot of disruption in the regulated cannabis space and that has come back on us and they're threatening our customers access to products that they want need, the sorting out process is largely in inside in the inter intra cannabis industry sorting out the lanes on the smokable products.

[00:08:48]>> Yeah. I know you're going to be careful with what you're saying and how you're positioning this. I'll say it. The days of synthetic, those days are numbered and it appears that obviously with this kind of attention in Washington right now, it's at the forefront. Saying that as we travel into midterms and looking into 2027 and beyond, what does success look like for your business on what needs to be done in Washington to separate yourself, but also have a thriving business at the same time?

[00:09:14]>> I mean, you know, we've got 106 employees at Cornbread and my focus is keeping 106 employees employed through the through the rest of the year.

[00:09:21]Um that would be a success for us is to stay in business through the year. And you know, on the other side of that, working with the cannabis industry for an omnibus cannabis bill so that we can sort all this out because we are on the verge of a sea change in America where we get cannabis out out of the schedules and regulated like alcohol. What was unthinkable to me before was aligning ourselves with an industry that is threatened by us and is threatened to choke us out.

[00:09:51]We've got tobacco and big pharma kept behind you.

[00:09:56]We've got tobacco and big pharma ready to pick the entire cannabis industry apart and >> How serious is that?

[00:10:04]>> Schedule three is a real threat.

[00:10:07]Like like like you it's it's their it's it's it's it's their home court. Right?

[00:10:12]Um the only way to survive it is to deschedule it and to get into the home court of the alcohol industry.

[00:10:18]>> Can that happen? I mean It has to you're saying.

[00:10:22]>> If it if the adult use market is going to survive, it's going to survive descheduled in interstate commerce regulated like alcohol. And that's someone that's coming from someone who right now her company has been threatened by the bourbon industry specifically, but we need the bourbon industry's help to survive big pharma.

[00:10:41]So we got to pick, you know, it's a it's a you know, it's a it's a it's a [ __ ] marry, kill situation between tobacco, pharma, and alcohol. We got to pick one.

[00:10:50]>> Well, time is changing, is it not?

[00:10:53]>> You know, using using the Chicago conference last year as a mile post >> Yeah, it is. Listen, give you credit for coming here. Obviously, it's nice to see some of the dialogue and communication that's being obviously constructed and more importantly, we shall see what happens over these next few months, but all in all appreciate obviously for checking in here today and more importantly, I hope you get some progress and some dialogue here and really some more clarity as to what's going to happen, you know, in these next few months cuz they're going to be crucial.

[00:11:21]>> Appreciate it, Chad.

[00:11:22]>> All right, thanks, Jim.

[00:11:22]>> Yeah, see you next time.

[00:11:23]>> TDR's Trade to Black here in Chicago.

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