The cannabis and hemp industries are experiencing rapid growth, and the regulation of hemp-derived products, such as Delta-8 THC, has become a hot topic. Pablo Zuanic, a respected equity analyst focusing on the cannabis and psychedelics sectors and a speaker at the upcoming Benzinga Cannabis Capital conference, recently offered insights into the future of hemp derivatives. He believes that these products are becoming an established part of the industry, driven by evolving state regulations and increasing market share.
Hemp-derived products have gained immense popularity, leading to a highly fragmented market with numerous players across the supply chain. Zuanic emphasizes the widespread presence of hemp derivatives in the U.S. market: “Hemp derivatives are here to stay.” He describes the hemp industry as “a very democratic industry, a very competitive capitalist industry” due to its diverse participants, including farmers, processors, and manufacturers.
While the 2018 Farm Bill did not initially anticipate the widespread adoption of hemp-derived products like Delta-8 THC, Zuanic acknowledges their significant role. He highlights the unexpected growth of the hemp derivatives market, stating: “It’s not a small little loophole. It’s a big thing. It’s a big industry.”
As hemp-derived products continue to thrive, Zuanic underscores the increasing need for regulatory oversight. He points to the current patchwork of state regulations, with some states striving to implement stricter controls on the production and sale of hemp products. For example, Florida’s governor vetoed a ban on hemp derivatives, but the state still enforces regulations related to testing and packaging.
Zuanic emphasizes the regulatory disparity between the hemp and cannabis industries, creating an uneven playing field. He points out how cannabis businesses face far stricter federal and state regulations: “It’s not a level playing field with the cannabis industry.” However, Zuanic remains optimistic, believing that as regulation evolves, both industries can coexist in a more regulated environment. He predicts that over the next four years, regulations will be established to allow for harmonious coexistence between the two sectors.
With the market for hemp-derived products maturing, it is clear that these products will continue to play a significant role in the cannabis space. Zuanic’s insights offer a realistic view of the industry’s future, where hemp derivatives are more tightly regulated but remain an important market segment. His thoughts on hemp and cannabis regulation will likely spark discussions among industry leaders at the upcoming Benzinga Cannabis Capital Conference in Chicago on October 8-9, exploring how the two markets can evolve together.
