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The bioengineering of cannabis

Genetic modification could enable industrial-scale production of cannabinoids that have pharmaceutical potential.

    Elie Dolgin

    Elie Dolgin is a science journalist in Somerville, Massachusetts.

    You can also search for this author in PubMed Google Scholar

    Researchers monitor cannabis propagated using plant tissue-culture techniques at Ebbu in Evergreen, Colorado. Credit: Helen H. Richardson/The Denver Post/Getty

    Cannabis is the only plant known to produce tetrahydrocannabinol (THC), but it remains an imperfect vessel for producing the chemical on an industrial scale. The psychoactive substance is normally found only in small outgrowths from the plant known as trichomes, which means that its stalk, stems and leaves are wasted biomass.

    Genetic engineering could provide more efficient alternatives. Some researchers and biotechnology companies are aspiring to replace cannabis plants with microorganisms that have been genetically enhanced to spit out THC, the non–psychoactive compound cannabidiol (CBD) and myriad other cannabinoids of pharmaceutical interest. Others are aiming to modify chemical synthesis in the cannabis plant by genetically altering its cells to make the desired molecules from shoot to tip, thereby boosting yield.

    Part of Nature Outlook: Cannabis

    Either way, the goal is the same: to produce cannabinoids more cheaply, efficiently and reliably than by conventional plant cultivation in greenhouses or farmers’ fields. Further benefits of microbial synthesis include the ability to mass-produce rare cannabinoids that are usually present in plants in only trace amounts — or even molecules not found in nature. Transgenic plants can also be engineered for superior resistance to pests and environmental stresses.

    Commercial interest in these strategies is picking up. In 2018, for example, Canopy Growth Corporation in Smiths Falls, Canada — the largest legal cannabis company in the world — paid more than US$300 million in cash and shares to acquire Ebbu, a small company in Evergreen, Colorado, that had developed one of the earliest platforms for manipulating the cannabis genome with the gene-editing system CRISPR–Cas9. And in April, Zenabis, a cannabis producer based in Vancouver, Canada, agreed to purchase 36 tonnes of almost-pure, bacterial-made CBD from medical-cannabis company Farmako in Frankfurt, Germany — the first deal of its kind for biosynthetic cannabinoids.

    David Kideckel, a cannabis analyst with financial-services company AltaCorp Capital in Toronto, Canada, describes genetic engineering as a “disrupter” that promises to take a centuries-old agricultural practice into the biotechnology era, with the resulting ripples being felt throughout the cannabis sector worldwide. When it comes to producing cannabis extracts, plants could be supplanted by microbes, and a greater range of cannabinoids could become available for use in medical and recreational products.

    If that happens, the iconic cannabis leaf would no longer accurately represent where the active ingredients come from. Instead, a stainless steel bioreactor might be more apt.

    Cooking up cannabinoids

    Part of the appeal of ditching greenhouses for bioreactors boils down to cost. Currently, 1 kilogram of high-quality CBD extracted from plants sells for a wholesale price of more than $5,000. A deal in 2018 between Ginkgo Bioworks, a synthetic-biology company in Boston, Massachusetts, and Cronos Group, a Toronto-based cannabis producer, outlines a plan to manufacture pure CBD and other cannabinoids for less than $1,000 per kg in yeast.

    Biomanufacturing also offers a level of consistency that is impossible to replicate in plants, which, like most agricultural commodities, are subjected to the weather, pests and other environmental uncertainties. Laboratory-based production is also better for the environment because less energy is needed to run a bioreactor than to power the grow lights and ventilation fans of an indoor cannabis-growing operation. The water pollution and land destruction that is associated with outdoor cannabis cultivation can also be avoided.

    Perhaps the biggest advantage of cooking up cannabinoids in fermenters, however, is the ability to brew copious amounts of lesser-known cannabinoids that are usually found only in trace amounts in cannabis plants.

    “People are so focused on the big two — THC and CBD — that we’re sort of forgetting that there are potentially other really useful compounds in the plant,” says Tony Farina, chief scientific officer at synthetic biology company Librede in Carlsbad, California. “That’s the direction for which we should really be using this biosynthesis platform.”

    Cronos has singled out a few molecules of particular interest. These include cannabichromene, a rare cannabinoid that is thought to have anti-inflammatory properties, and cannabigerol (CBG) — a chemical precursor to THC and CBD with the potential to protect cannabis plants from damage-inducing molecules inside cells. High on the company’s list is also an appetite-suppressing variant of THC called tetrahydrocannabivarin (THCV). This cannabinoid has medical potential in people who are affected by compulsive overeating disorders, and THCV could appeal to recreational users of cannabis who enjoy the drug’s intoxicating effects but would rather avoid its hunger-inducing properties.

    “It offers the same euphoric effect as THC, but without the munchies,” says Cronos chief executive Mike Gorenstein.

    At least 18 companies are racing to produce cannabinoids in yeast, bacteria or algae. Although each industry player has a proprietary approach, all are variations on the basic playbook described earlier this year by synthetic biologist Jay Keasling at the University of California, Berkeley (X. Luo et al. Nature 567, 123–126; 2019).

    Crystals of purified cannabidiol oil. Credit: Helen H. Richardson/The Denver Post/Getty

    Keasling and his colleagues introduced a series of genetic changes into the yeast Saccharomyces cerevisiae. By tweaking some yeast genes, and inserting others from bacteria and the cannabis plant, the team created an organism capable of carrying out all the chemical reactions that are involved in cannabinoid production. Feeding the yeast a simple sugar generated low amounts of inactive THC or CBD, which can be converted into their active forms by heating.

    Because the enzymes in the cannabinoid pathway are “a little sloppy”, as Keasling puts it, the team could also introduce fatty acids that the yeast would incorporate into cannabinoids. This spawned variants of THC and CBD that are not found in nature. “We created entirely new molecules that might be better therapeutics,” Keasling says.

    At the yields reported, however, Keasling’s platform is not ready for prime time. Dramatic improvements in both the yeast’s efficiency and the fermentation protocol are needed for the biosynthetic approach to be cost-competitive with plant-extracted cannabinoids. Demetrix in Emeryville, California — a company co-founded by Keasling that has secured more than $60 million in funding, making it the best-financed start-up company devoted to lab-based cannabinoid production — is developing the technology further. Demetrix chief executive Jeff Ubersax says that his team has increased the cannabinoid yield by “several orders of magnitude”.

    But many companies made similar claims to Nature that, without verifiable data, cannot be substantiated. Even if they are true, getting something to work in the lab does not guarantee success in a manufacturing plant, says Stephen Payne, chief executive of Maku Technologies, a start-up in Durham, North Carolina. Maku is focusing on making rare, natural cannabinoids in yeast. “Throughout my time in the synthetic-biology industry, I’ve seen things work on a small scale that have no chance of reaching industrial levels,” Payne says.

    Catalysing success

    Turning yeast into miniature cannabinoid factories poses considerable challenges. Although Keasling’s protocol involves 16 genetic modifications, the overall efficiency of the procedure came down to a single bottleneck.

    The log-jam involved an enzyme that is needed for CBG production. Researchers characterized the enzyme, known as a prenyltransferase, around a decade ago in a strain of medical cannabis. Initially, Keasling tried to use that cannabis-derived enzyme in yeast, but it didn’t work: the yeast produced no CBG.

    After rummaging through gene-expression databases, however, Keasling found an alternative prenyltransferase that was encoded by another variety of cannabis. He introduced this into the yeast and all the pieces fell into place to make CBG and its derivatives.

    Some researchers faced the same enzymatic challenge in S. cerevisiae and elected to switch to alternative organisms. Bioengineer Oliver Kayser and his colleagues at the Technical University of Dortmund in Germany turned to a species of yeast called Komagataella phaffii (B. Zirpel et al. J. Biotechnol. 259, 204–212; 2017).

    Others have sworn off yeast completely. Vikramaditya Yadav, a chemical engineer at the University of British Columbia in Vancouver, has moved to working in bacteria instead. He is collaborating with a Vancouver-based company called InMed Pharmaceuticals to produce cannabinoids in Escherichia coli.

    One advantage of bacteria over other cell-based systems, says Yadav, is that they don’t attach sugars to the proteins that they produce in the same way as yeast and other organisms with an enclosed nucleus do. Those sugar adornments can limit the activity of enzymes that are crucial to the cannabinoid pathway — at least in K. phaffii, as Kayser’s team has shown (B. Zirpel et al. J. Biotechnol. 284, 17–26; 2018) — which leads to lower yields.

    Bacteria also naturally secrete the cannabinoids that they produce into the surrounding medium, from which they can be extracted easily. This phenomenon provides speed and cost advantages because it enables continuous manufacturing, whereas organisms that retain their chemical bounty inside cells must be ‘cracked’ open as part of a batch-production system. Yeast do not typically secrete proteins, but researchers at Librede and elsewhere claim to have engineered this function into the organism.

    A further challenge for using either yeast or E. coli is the toxicity of cannabinoids. Such molecules evolved in plants as a defence mechanism against insects, microorganisms and other biological threats. This means that the chemicals that researchers desire are often deadly to the organisms that have been engineered to make them.

    At Farmako, which announced in July that its biosynthesis research team would be spun off to form a new biotechnology company, scientists therefore turned to Zymomonas mobilis, a bacterium used in tequila production. According to molecular biologist and Farmako co-founder Patrick Schmitt, who is expected to lead the spin-out company, this microorganism is immune to cannabinoid toxicity — although it’s not clear why. Meanwhile, researchers at Renew Biopharma in San Diego, California, are working in Chlamydomonas reinhardtii, a green alga that compartmentalizes its cannabinoid synthesis in chloroplasts. In so doing, the rest of the cell is shielded from the toxic molecules.

    As well as the biological advantages, cannabinoid production in an unconventional organism such as an alga makes good business sense because the approach is proprietary, says Michael Mendez, founder and chief executive at Renew Biopharma. “Intellectual property will rule the day in this space,” he says. And as Jeremy de Beer, a law professor at the University of Ottawa who has studied cannabis patents, points out: “We’re in sort of an intellectual-property gold rush.”

    Already, the US Patent and Trademark Office has protected Librede’s use of yeast to synthesize cannabinoids from sugars. Other patents have followed, including one that was granted to Teewinot Life Sciences in Tampa, Florida, for a bioreactor designed to grow cannabinoid-producing microorganisms. Legal battles might not be far behind (see ‘Pot’s patent predicament’). “It will not be a surprise at all, as revenues from cannabis sales pick up, that you see similar increases in patent-related enforcement,” says Stephen Hash, a patent attorney at Baker Botts in Austin, Texas. “It will go hand in hand.”

    Pot’s patent predicament

    Under federal law in the United States, the cultivation of cannabis is strictly prohibited. But that hasn’t stopped the growth of the country’s cannabis industry, which has been operating in a quasi-legal fashion since individual states began to allow the sale of cannabis for medical and recreational use more than 20 years ago. Nor has it stopped the US Patent and Trademark Office from granting intellectual-property licences for cannabis breeding and production.

    One such patent sent shockwaves through the industry. Granted in 2015 to a company called Biotech Institute in Westlake Village, California, it covers a range of cannabis varieties with appreciable levels of tetrahydrocannabinol and cannabidiol.

    The sweeping nature of the patent’s claims concerned many cannabis breeders, who feared that it could stifle innovation and biological diversity in the fledgling cannabis sector. They also worried that artisanal marijuana production, which is driven by consumers’ needs and tastes, could be supplanted by an age of corporate cannabis.

    Other broad patents have followed, as have legal disputes. In 2018, for example, two Colorado-based firms were embroiled in a lawsuit over whether one company’s liquid formulation of hemp-derived cannabidiol infringed on the patent claims of the other. It was the first high-profile patent challenge in the sector. The case is ongoing.

    The issue in that lawsuit, and in others, is whether the patent is novel — and therefore worthy of protection — or an obvious development in light of prior art. Because of cannabis’s long history of hidden cultivation, breeders have not chronicled their varieties in the public sphere. Consequently, patent examiners had little information on which to base decisions on whether cannabis-related technologies are new and non-obvious. That lack of a paper trail also makes it hard to mount a proper challenge to a patent.

    Beth Schechter hoped to change that. As executive director of the non-profit organization Open Cannabis Project (OCP), Schechter and her team built a public record of chemical and genetic profiles of hundreds of existing cannabis varieties that were submitted by members of the community. The goal was to provide evidence to show that some patents are obvious and therefore invalid, she says, and “if nothing else, to at least prevent similar patents like those going forward”.

    But the project might end up having unintended consequences. Although touted as a way to protect the rights of small farmers, it folded in May after a video emerged of OCP co-founder Mowgli Holmes pitching to investors the idea of an in-house breeding programme at Phylos Bioscience, a cannabis-science company in Portland, Oregon, that he co-founded and now leads as chief executive. For many, it confirmed their fears: that OCP was a front for Phylos to amass cannabis data for financial gain.

    According to Holmes, Phylos was only seeking to publish data through the OCP, and “None of the customer data had any value to a plant breeding program.” Yet the damage was already done.

    “Making data public is good because it enlarges the public domain and it speeds up science,” Holmes maintains. But in the emergent cannabis industry, secrecy and intellectual property continue to define battle lines.

    Firmly planted

    Rather than trying to force the production of cannabinoids in microorganisms, some companies are sticking with cannabis plants, but using biotechnology tools to give the crop a boost.

    Trait Biosciences in Toronto has genetically engineered cannabis to enable it to produce cannabinoids throughout the plant, not just in the trichomes, to increase the yield that each plant provides. The company also added enzymes that made the cannabinoids less toxic and made the usually oily molecules soluble in water.

    “That was a side benefit that we soon realized was perhaps as important, if not more important, than the yield boost,” says Richard Sayre, Trait’s chief science officer. “Now that they’re water soluble, we can essentially press the plant just like they do with sugar cane to squeeze the juice out and recover the cannabinoids.”

    Water solubility also opens up the possibility of creating new kinds of cannabis-infused beverages or edible products. “It’s tasteless and odourless, so it can be blended in a variety of applications,” Sayre explains.

    More from Nature Outlooks

    At Ebbu, director of genetic research Robert Roscow has filed patents that cover methods for manipulating cannabinoid synthesis in plants. He uses CRISPR–Cas9 gene editing to delete certain enzymes in the cannabinoid-synthesis pathway that are involved in THC production. This has enabled him to generate cannabis plants that produce only CBD. And by targeting enzymes that are involved in both THC and CBD synthesis, he has produced plants that secrete only CBG.

    Some skilled cannabis growers have created plants rich in minor cannabinoids such as CBG or THCV through selective breeding alone, but that can be a laborious and difficult process. “Modification through genetic engineering is probably the most straightforward way to get a desired phenotype,” says Igor Kovalchuk, a plant biotechnologist at the University of Lethbridge, Canada, and co-founder of cannabis-genomics company InPlanta Biotechnology, also in Lethbridge.

    Genetic engineering is also a powerful tool for probing the function of cannabis genes — information that can then be fed back into a more conventional breeding programme. But beyond the lab, Kovalchuk says, “I don’t believe that genetically engineered cannabis has a future for years to come.”

    One obstacle remains consumers’ skittishness about genetically modified crops, which could carry over to a distrust of microorganism-based biosynthesis. “People like their weed, and they will care if their cannabinoids are coming from a genetically modified yeast or a field-grown plant,” says Jordan Zager, co-founder and chief executive of Dewey Scientific, a cannabis biotechnology company in Pullman, Washington.

    The technological provenance of cannabinoids might not matter as much to the pharmaceutical sector, where consumers tend to be less averse to genetic engineering. But according to Ethan Russo, director of research and development at the International Cannabis and Cannabinoids Institute in Prague, biochemically derived cannabinoids, even when mixed and matched into therapeutic formulations, will probably never equal the botanical synergy of the hundreds of molecules that are found in cannabis.

    The existence of this ‘entourage’ effect is not universally accepted. But to Russo, “The plant is nature’s design for this panoply of chemicals”.

    Nature 572, S5-S7 (2019)

    This article is part of Nature Outlook: Cannabis, an editorially independent supplement produced with the financial support of third parties. About this content.

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    • Dr. Kerklaan Therapeutics
    • Sensitiva
    • Canna-Pet

    Key insights

    Ever wondered which U.S. state is the most popular location for hemp? Want to know the most common hemp CBD extraction method? Are brands ensuring safety and transparency at every level? How popular are minor cannabinoids such as CBG, CBC, and delta-8? Are CBD companies self-regulating in an unregulated industry? Our analysis of 520 of the biggest CBD companies, representing over 20,000 products, answers these questions and more.

    Summary of key insights:

    • Third-Party Testing: 90% of companies test their CBD products through an accredited third-party lab, showing a transparent industry, despite lack of scrutiny
    • Hemp Source: Colorado is the most common location for sourcing hemp; surprisingly, only 5% of companies source their hemp from California
      • 89% of companies fully disclose their hemp source and cultivation practices
      • 8% of companies import their hemp from international hemp farms
      • 43% of companies fail to provide information on which extraction method is used for their products
      • 10% of companies sell delta-8 THC products
      • 1% of companies offer delta-10 and THC-O products

      1. Top U.S. states for hemp source

      Hemp source refers to which location a CBD company sources its hemp plants and how they’re grown and under what conditions.

      Roughly 30% (153) of CBD companies sourced their hemp from farms located in Colorado, 13% (68) sourced it from Oregon, and 5% (25) sourced it from Kentucky. None of these states hitting the top 3 is particularly shocking. Colorado and Kentucky legalized hemp farming in 2014, establishing successful, long-standing hemp pilot programs. Oregon joined them a year later in 2015.

      Surprisingly, only 5% (25) sourced their hemp from California, a state with over 550 registered growers operating in near-perfect hemp growing and cultivation conditions.

      Colorado, Oregon, Kentucky, and California are the most common locations for growing hemp, for use in CBD products, in the United States.

      The most common hemp source locations chosen by CBD companies include:
      • Colorado = 153 (30%)
      • Oregon = 68 (13%)
      • Kentucky = 25 (5%)
      • California = 25 (5%)
      • New York = 9
      • Vermont = 5
      • Montana = 4
      • Wisconsin = 4
      • North Carolina = 4
      • Tennessee = 4
      • Florida = 3
      • South Carolina = 3
      • Pennsylvania = 2
      • Minnesota = 2
      • Hawaii = 1
      • Arizona = 1
      Why does the hemp source matter and how does it affect your CBD product’s quality?

      Hemp source matters because it indicates the safety and quality of your CBD products. Domestically grown U.S. hemp is the optimal choice. Why? All legal U.S. hemp farms operate under strict federal and state regulations which oversee hemp cultivation and production. These regulations are governed by the USDA in line with the 2018 Farm Bill and designed to uphold safety and quality standards across the entire hemp farming industry, resulting in pure, clean, and uncontaminated CBD products.

      However, not every country has the same regulatory oversight regarding safe, quality hemp production. A lack of stringent regulations means internationally imported hemp might carry harmful contaminants and more THC than legally permitted. In other words, the hemp used in your CBD products could do more harm than good.

      Are some U.S. states better hemp source locations than others?

      Yes, despite comprehensive federal regulations governing hemp, some U.S. states are better than others regarding hemp cultivation and production.

      Colorado and Oregon, for example, have established long-standing hemp programs since 2014 and 2015, respectively. This means Coloradan and Oregonian hemp farms have adhered to strict regulations and perfected their cultivation practices for 6-7 years, which is why both U.S. states are considered two of the most popular hemp source locations.

      However, the state a CBD company’s hemp is grown isn’t the only thing you should take into account. Certifications from legitimate regulatory agencies (federal or independent) are also incredibly important. Certifications prove hemp farmers follow strict guidelines ensuring safety and quality throughout their entire cultivation, production, and manufacturing process.

      Why should CBD companies know and disclose the source of their hemp?

      CBD companies should know and disclose the source of their hemp for safety, quality control, and transparency reasons. Many companies source their hemp from white-label suppliers with very little control over its quality. Knowing the origin of the hemp ensures quality control and improves transparency between the company and consumers. This promotes trust, transparency, and openness.

      Percentage of CBD companies not disclosing their hemp source:

      Thankfully, only 11% (57) of CBD companies fail to disclose their hemp source. 19% (11) of these 57 CBD companies primarily sell CBD drinks and beverages, which indicates a lack of transparency in this market. Interestingly, almost all of these CBD drinks and beverage companies also fail to disclose their extraction methods and third-party testing results.

      2. Percentage of companies using imported hemp

      Only 8% (39) of the CBD companies we analyzed import their hemp from international hemp farms, with Europe being the preferred choice.

      The most popular European locations are Holland (5), Lithuania (4), Switzerland (4) and Spain (4), followed by Scandinavia (3). Surprisingly, Italy and France aren’t chosen as hemp sources despite being touted as two of the best European locations to grow and cultivate hemp for industrial and commercial purposes. The remaining 7 companies source their hemp from European hemp farms without providing an exact location. Do they get their hemp from white-label companies with less control over the quality? We’re not sure, but it’s easy to assume that’s the case.

      3. Percentage of companies third-party testing their products

      Nearly 90% (465) of all CBD companies third-party test their products and post the Certificates of Analysis on their websites. This is really impressive and not only showcases an industry willing to take the appropriate safety measures for its customers but also upholds the right standards.

      Nearly 90% of CBD companies third-party test their products while only 6% don’t offer proof of testing.

      What is third-party testing exactly?

      Third-party testing refers to the testing of CBD products performed by accredited, independent laboratories specializing in cannabis analysis. Laboratories commonly test for cannabinoids and terpenes in the hemp extract, as well as the presence of any contaminants such as heavy metals, residual solvents, and mycotoxins. Once testing is complete, Certificates of Analysis (COAs) are issued verifying the results. All legit companies post COAs publicly as proof of testing and for your reference.

      Why is third-party testing important for the CBD industry?

      Despite progress in the CBD industry, it remains largely unregulated, resulting in shady companies producing bogus products filled with harmful contaminants.

      Third-party testing acts as a microscope into the products you purchase and lets you know what’s in them, eliminating concerns over their safety. The credibility of the lab carrying out the product testing is also essential and what separates a semi-safe product from one that’s almost-guaranteed fit for consumption.

      There’s a risk of impurities being present in products that companies won’t know about unless they run a full panel test that checks for pesticides, residual solvents, heavy metals, and other impurities.

      Eric Tam, Senior Chemist at Anresco Labs

      “At a minimum, labs should follow guidelines by the Bureau of Cannabis Control (BCC) to ensure the testing method is reliable and consistent across the industry. The certification of the laboratory is also important. In California, the minimum requirement is to be ISO certified. We also participate in other performance test studies to ensure our services are passing performance test samples (blind samples), to see how close we are to meeting the industry standards,” he continues.

      What do you do if a CBD company has no COAs?

      If a CBD company has no publicly available lab reports posted on its website, don’t immediately think it’s a scam company selling shady products. While it’s good practice to post them on the website, it’s not mandatory. We recommend emailing a member of the company’s customer service team and request them. All legitimate companies are happy to oblige. If the customer service team fails to reply with the COAs, move onto another company.

      4. The most common CBD products on offer

      The most common CBD product offered is CBD oil. Nearly 72% (372) of companies sell some type of CBD oil. This isn’t surprising. The CBD oil market generated $962.7 million in 2020 and is predicted to grow to $5.3 billion by 2025.

      The second-most popular CBD product offered is CBD topicals followed by CBD capsules. Just under 65% (334) of the companies we looked at sell some type of CBD topical product, while 43% (224) sell CBD capsules. Again, this isn’t a shock. CBD topical sales exceeded $703 million in 2019 and are predicted to hit $4.5 billion by 2025 (second to CBD oils).

      The most common CBD topical products are specialized CBD face creams, CBD sport sticks, and CBD bath bombs, most of which carry additional ingredients marketed for pain relief. The most common type of CBD capsule is soft gels carrying anywhere between 15-25 mg of CBD per soft gel.

      The most common CBD product categories include:
      • Oils and tinctures = 372 (72%)
      • Topicals = 334 (65%)
      • Capsules = 219 (42%)
      • Gummies = 209 (40%)
      • Vape pens and juice = 91
      • Drinks and beverages = 86
      • Flower and prerolls = 69
      • Beauty and skincare = 63
      • Concentrates = 54
      • Vaporizers = 30
      • Chocolates = 30
      • Candy = 14
      • Transdermal = 14
      • Supplements = 13
      • Suppositories = 8
      • Intimate = 7
      • Inhalers = 3
      • Candles = 2

      5. The most common hemp extraction method

      By far, the most common hemp extraction method is carbon dioxide (CO2) extraction. A whopping 42% (217) of CBD companies utilize CO2 as their primary extraction method, promising consistently clean and safe CBD hemp extracts. Ethanol came in second with 11% (56) of CBD companies using it to create CBD hemp extracts.

      Why is CO2 the most popular extraction method?

      CO2 extraction is known as the safest, cleanest, and most versatile method of extracting valuable plant compounds from hemp plants. CBD companies and producers using CO2 enjoy higher yields, reduced extraction times, and lower energy output, and lower overall costs, resulting in an efficient, environmentally friendly extraction process.

      Percentage of companies that don’t provide extraction method information

      The extraction method refers to the way a CBD company or producer extracts all the valuable plant compounds from hemp plants.

      Unfortunately, 43% (221) of CBD companies fail to provide information on which extraction method is used for their products. This figure is concerning.

      Complete transparency is hypercritical in the CBD industry. There is no federal regulation in the space, which allows a lot of bad actors in the CBD market to thrive. These brands mislead customers on the quality of their product and/or they make inappropriate claims about curing diseases. This makes the CBD business extremely challenging for the reputable companies in the space, and we constantly have to communicate our commitment to transparency and product integrity in everything we do.

      Melissa Davis, Head of Education at Elixinol

      6. Percentage of CBD companies offering pet CBD

      According to Brightfield Group, consumers in the CBD market spent just shy of $426 million on pet products in 2020 and predict sales to reach $629 million by the end of 2021.

      Therefore, it’s not a big shock to discover over 30% of CBD companies sell CBD products for pets, many of which are specifically targeted at dogs, cats, and horses. Some common CBD pet products include oils, capsules, edible treats, and topicals.

      7. Percentage of CBD companies offering delta-8 THC products

      Delta-8 THC is the newest phenomenon in the cannabis industry, often touted as the next big cannabinoid since delta-9. According to New Frontier Data, delta-8 sales reached upwards of $10 million across the US in 2020. The reason for this jump in sales? It’s federally legal and many states still allow the purchase, use, possession, sale, and distribution of delta-8 products.

      However, despite growing interest in delta-8 THC, only 10% (69) of companies sell delta-8 THC products including delta-8 distillates, delta-8 carts, delta-8 gummies, and delta-8 flower.

      Considering delta-8’s exponential market growth in the U.S., this is somewhat surprising. However, the rise in delta-8 restrictions across 19 U.S. states is most likely contributing to this low number. Many online and in-store delta-8 vendors operating in newly restricted states ceased selling delta-8 products in 2021.

      What’s the percentage of CBD companies selling delta-10 THC?

      Like delta-8, the market for delta-10 THC products is widening as their popularity begins to increase. Currently, only 1% of CBD companies sell delta-10 THC products.

      What’s the percentage of CBD companies selling THC-O products?

      Similar to delta-8 and delta-10, THC-O is an up and coming THC variant with a lot of potential in the cannabis market. However, since it’s a relatively new cannabinoid, only 4 (1%) of companies sell THC-O products.

      8. Minor cannabinoids making their presence known

      The hemp-derived products market isn’t just about CBD anymore. Several minor cannabinoids are enjoying the spotlight.

      Just under 20% (100) sell cannabigerol (CBG) products including CBG flower, CBG distillates, and CBG oils (usually paired with CBD). Likewise, just over 12% (63) of companies sell CBN products and 4% (10) sell cannabichromene (CBC) products.

      CBG, CBN, and Delta-8 THC are the most popular minor cannabinoids offered by CBD companies.

      The proliferation of minor cannabinoid products isn’t shocking. Research suggests CBG could be a stronger pain-reliever than THC and a more effective neuroprotectant than CBD. Similarly, CBC could potentially reduce arthritic pain and inflammation.

      CBN’s benefits, on the other hand, aren’t as well known. Many believe it possesses potent sedative qualities similar to THC but the research is old and somewhat limited. Anecdotally, CBN users claim it’s the most effective cannabinoid out there. Some are even replacing conventional benzodiazepines with daily CBN doses.

      9. Maximum potency available

      The highest CBD product potency we found is a 20,000 mg CBD isolate tincture from CBD Lion that costs $714.99. Each drop of oil carries approximately 33.3 mg of CBD (166.7 mg per serving). No other company offers this potency.

      The maximum potency level offered by CBD companies is about 2,100mg (average) per product.

      The second highest CBD product potency is CBD Harmony’s 18,920 mg full-spectrum CBD oil that costs $1,000. Overall, only 3% (14) of companies offer CBD potencies above 10,000mg per product. On average, the maximum CBD potency level offered by companies is about 2,100mg per product.

      10. The price of CBD isn’t as high as you think

      The price of CBD products is generally not as expensive as you think.

      The majority of companies price their CBD products between $0.06-$0.10 per mg of CBD.

      Over 70% (381) of CBD companies don’t price their products any higher than $0.15 per mg of CBD. Only 13% (67) price their products between $0.16-$0.20 per mg of CBD and a mere 6% (30) price their products at $0.21-$0.25 per mg of CBD.

      The most common price range is $0.06-$0.10 per mg of CBD (38% of CBD companies). On the lowest end of the scale, 7% (34) of CBD companies price their products below $0.05 per mg of CBD.

      11. Percentage of CBD companies that are certified USDA Organic

      The USDA Organic certification is one of the most well-respected and highly sought-after labels any CBD company can obtain. It verifies that a CBD company is adhering to strict guidelines set out by the USDA National Organic Program.

      To be given the USDA Organic stamp of approval, CBD companies must demonstrate the protection of natural resources, use of approved substances, and conservation of biodiversity.

      Since the USDA Organic certification is very difficult to obtain, especially in the CBD and cannabis industries, only 5% (25) of the CBD companies we analyzed are certified USDA Organic.

      Some of the CBD companies that offer USDA certified organic product(s) include:
      • Charlotte’s Web
      • Joy Organics
      • Lazarus Naturals
      • Aspen Green
      • TheraOne
      • Toast
      • Cornbread Hemp
      • NuLeaf Naturals
      • R+R Medicinals
      • Humplucid
      • Sunsoil
      • RE Botanicals
      • Ojai Energetics
      • Cloud Water
      • NuuMe
      • HempFusion
      • 43 CBD
      • Harvey’s
      Insights from a certified USDA Organic CBD company

      We reached out to R+R Medicinals, a CBD company with a long-standing USDA Organic certification, and asked its founder and head honcho why being certified USDA Organic is essential in the CBD industry.

      We’ve been using USDA Certified Organic hemp since 2019. We’re proud that nine of our products now bear the USDA Organic logo, and are actively working on certifying the rest of our line wherever possible.

      Dave Baugh, Founder and CEO of R+R Medicinals

      “Our number one driver for accountability is our customers. They are our top priority. Every decision we make as a company revolves around their sentiments, feedback, input, and needs. As a totally bootstrapped and employee-owned company, this ‘true north’ of our customers is a unique alignment for our brand compared to others, as we do not serve a board of venture capitalists or public shareholders. Our mantra of ‘treat our customers like our own mothers’ is true and bleeds through to every aspect of our company,” he finishes.

      A company claiming it’s organic isn’t the same as being USDA certified organic

      While some CBD companies claim to be “100% organic” in their website and marketing literature, this doesn’t mean they’ve been given the USDA certified organic stamp of approval. It simply means they’ve sourced their hemp or additional ingredients from farms or producers adhering to organic practices.

      For you to recognize a USDA-certified organic CBD company, we recommend looking for the official USDA Organic seal. Most companies will use this seal on their website and products.

      If a CBD company claims to be USDA certified organic without displaying this seal, it’s probably not certified organic.

      12. Celebrity CBD isn’t always the most transparent CBD

      Celebrity-owned CBD companies aren’t always the most transparent. Mike Tyson’s Dwiink and Ivan Moody’s Moody’s Medicinals are shining examples of this. Both companies fail to provide information on their hemp sources and extraction methods. Worse, there are no publicly available third-party test results, which is the ultimate cardinal sin within the CBD industry.

      Other examples of poor transparency among celebrity CBD brands include RVD CBD and Tommy Chong’s CBD. Neither company provides an exact hemp source or extraction method.

      Self-regulation in an unregulated industry

      It’s no secret the CBD industry is largely unregulated. A federally governed regulatory network doesn’t exist. This had led to an increase in shady companies selling poor, contaminated, and unsafe products to unsuspecting customers.

      As a result, consumers, CBD companies, and independent hemp authorities are forced to regulate the industry through education, testing, certifications, correct labeling, open communication, accountability, and responsible hemp source choices, The US Hemp Authority, for example, offers a comprehensive certification program designed to legitimize the industry, add credibility to CBD companies, and ensure strict standards are being met.

      Closing thoughts: The CBD industry is doing well despite lack of regulatory oversight

      Despite a lack of regulatory oversight, the CBD industry is doing better than we expected. Many of the CBD companies we examined are transparent with their hemp source, third-party testing, extraction method, three things that are important for consumers to know.

      Minor cannabinoids such as CBG, CBN, and delta-8 are taking center stage too, indicating an industry thriving on innovation and fresh ideas. We expect more CBD brands will produce minor cannabinoid-based products in the future.

      It’s also great to see more CBD companies receiving the USDA Organic certification. Not only does this show a willingness to uphold the very best safety standards and comply with federal guidelines but it also legitimizes the industry as a whole. As more companies become USDA Organic, a standard will be set for others to follow.


      How we gathered the list of CBD companies

      We gathered our list through various different sources to get a well-rounded pool of U.S. and European CBD companies. Sources included market research, our own independent research, and social media.

      We started with databases from legitimate hemp and CBD organizations such as US Hemp Authority, National Cannabis Industry Association (NCIA), and Hemp Industries Association (HIA). These databases show CBD companies certified by each organization, indicating legitimacy, credibility, and an adherence to strict safety and quality standards. We then used our own Oracle review database, companies that have contacted us via email, and search engines.

      How many individual products do these companies represent?

      The number of individual CBD products these companies represent is approximately 20,000.

      How were the average prices calculated?

      We took the top three selling CBD product categories (oils, capsules, gummies), picked one product from each, and averaged out the price per milligram (mg). If a company didn’t sell oils, capsules, or gummies, we averaged out the price based on the products they had e.g. beverages or concentrates.

      USDA Organic

      USDA Organic certificates are given to specific CBD products rather than an entire CBD company. A CBD company displaying USDA Organic seals on its website also doesn’t indicate all products are certified organic. Companies such as Lazarus Naturals, Charlotte’s Web, and Aspen Green all display the USDA Organic logo properly by associating it to specific certified products.