Hermosa Beach company hopes to redefine CBD market
by Ryan McDonald
When Josh Standifer was a kid, his mother would periodically summon him to her room using the noise made from banging a ladle against a soup can. A series of compounding health problems frequently left her unable to care for herself, and Standifer was taking care of his mother from a young age, which often meant assisting her with a dizzying array of pills and medicines.
Today, Standifer said his mother is no longer dependent on most of her prescriptions, able to shed the pharmaceutical weight through Cannabidiol, or CBD, which he said “transformed her life.” His mother’s story is one of the reasons why Standifer helped form Earth Medicine, a Hermosa Beach-based company that hopes to transform the market for CBD.
“We’d like to see this on shelves throughout the United States. We’d like to see this in medicine cabinet across the United States,” Standifer said.
Earth Medicine launched in February, and confronts a business landscape that is simultaneously wide open and narrowly constrained. CBD is one of the naturally occurring compounds in marijuana, which means that, until recently, there were limited opportunities to test and distribute products containing it. And regulatory burdens remain, even in California, where recreational marijuana is legal. But CBD is also rapidly gaining popularity as a treatment for a host of medical issues.
CBD is distinct from THC, the chemical compound in cannabis most commonly associated with the “high” that is responsible for marijuana being classified as a Schedule I Controlled Substance by the federal government. According to a report from the World Health Organization, CBD “exhibits no effects indicative of any abuse or dependence potential.” As a result, it is finding proponents among people who might be searching for alternatives to traditional pharmaceuticals, but aren’t looking to reenact an episode of “Scooby Doo.”
CBD is also buoyed by a gradual shift taking place in healthcare, under which remedies such as yoga or meditation, which might have been greeted with rolled eyes in the past, are inching closer to the medical mainstream. Dr. Luis Pacheco, an Earth Medicine partner, said that what might once have been called “alternative medicine” is increasingly being thought of as “functional medicine.”
“Unfortunately, a lot of our approach in modern Western medicine has been more of a Band-Aid approach: If your blood pressure is too high, take this pill,” said Pacheco, who has spent more than 30 years as a physician, and is the former director of pre-doctoral education for the department of family medicine at the USC Keck School of Medicine. “But we’re not really looking at the cause of this problem. With CBD, we’re really looking at more of the root causes.”
Pacheco was referring to widely cited research about a system of “cannabinoid receptors” that have evolved in humans and that respond to CBD, THC and other components of cannabis. According to a paper published in Pharmacological Reviews, “modulating the endocannabinoid system” — including through the consumption of CBD — can have therapeutic applications.
Just what these potential applications remain a subject of scientific debate. In 2018, the Food and Drug Administration has approved the sale of Epidolex, a CBD-based product that has been shown effective in treating severe forms of epilepsy. This is the only government-sanctioned pharmaceutical application of CBD, though more recent studies have also linked CBD to improvements in cases of chronic pain, nausea, insomnia, and other disorders. But many scientists are also pushing back against a growing number of claims that are untested or even deliberately fraudulent, such as that CBD is a cure for cancer.
Thanks to Pacheco’s help, Earth Medicine bills itself as the only “doctor-recommended” brand of CBD on the market. The designation comes with an asterisk, including that the product is not meant to “diagnose, treat, cure or prevent any disease.” This is in large part because of the complex regulatory landscape surrounding CBD, particularly products like Earth Medicine, which are derived from hemp, not marijuana.
Like marijuana, hemp comes from the cannabis sativa plant. It was cultivated for thousands of years, often to be woven into rope, and was among the crops grown on the plantations of George Washington and Thomas Jefferson. The federal government began targeting industrial hemp in the 1930s at the same time it set its sights on marijuana, including levying heavy taxes, suppressing the crop for decades.
These days, in the eyes of federal law, hemp is different than marijuana because it is composed of less than 0.3 percent THC. And the 2018 farm bill legalized industrial hemp and allowed states to set up their own regulations.
But according to Jonatan Cvetko, a member of Los Angeles County’s advisory commission on cannabis, this has only created more confusion. Cvetko gave a presentation to the South Bay Cities Council of Governments earlier this year, explaining that the California Department of Public Health has yet to approve the addition of CBD into “food products.” Nonetheless, over the last year, CBD products have been appearing in stores throughout the state, ranging from corner bodegas to big-box chains, including many in the South Bay. Compounding the confusion is California’s approval of Proposition 64, which in 2016 legalized recreational marijuana dispensaries. And while Hermosa and the rest of the Beach Cities supported legalization — Hermosa, with 71 percent of voters in favor, had the third highest margin of any city in Los Angeles County — they have prohibited dispensaries.
This has led to the confounding situation in which products with CBD derived from hemp are illegal, but those derived from marijuana and sold in dispensaries, are legal. In April, Hermosa began sending out letters to businesses in the city, informing them that they were not allowed to sell products containing CBD.
Hermosa resident Karen Klink said she and her husband use CBD to help with inflammation, anxiety, and arthritis. They were surprised when they heard about the letter sent out to businesses.
“I heard about the letter, and I thought, How can you do that? This is not marijuana, get a grip guys,” Klink said at a recent Hermosa City Council meeting.
She calmed down after speaking with city staff and learning about the legal reasoning behind the city’s letter. But she said that there remains ample confusion. One store owner interviewed for this story said he simply threw the letter in the trash.
“The letter didn’t help. I spoke to some sellers, and people thought they’re okay because theirs doesn’t have THC, or they think hemp is okay but CBD is not. It’s created a real issue,” Klink said.
In the most recent session of the California legislature, there were 47 bills addressing cannabis regulation, including one, Assembly Bill 228, which has passed unopposed through several committees and would legalize CBD products. But the current lack of regulatory oversight has left unscrupulous operators free to make unsubstantiated claims. Earlier this year, CannaSafe, a Los Angeles-based marijuana testing laboratory, examined 20 CBD products on the market. The study was provided exclusively to the magazine Business Insider, and the products it blind tested were not named, but the reported results were damning: many of the products contained far less CBD than advertised, and several contained none at all.
“They’re basically just ripping people off,” Pacheco said. “This is a great opportunity for us to be able to provide very high-quality products that hopefully will be able to help a lot of people.”
Unlike many of its competitors, Earth Medicine chose to submit all of its products to rigorous third-party testing, said co-founder Michael Root. The label of each product contains a code that allows buyers to go online and examine lab results for the batch from which product is derived. The testing also ensures that the products contain no THC, meaning they may be suitable for those who face work-mandated drug testing.
While the shifting rules create some complications, they also make for unique business opportunities. Brooke Farrell, Earth Medicine’s vice president of marketing, said that she began speaking with people in the South Bay and discovered while many people were using CBD, there was “zero brand awareness.” Along with its promises of quality, Earth Medicine hopes to become the CBD company that people reach for on shelves: For its logo, it has chosen an elephant, the creature that famously never forgets.
“People had no idea which brand they were using,” said Farrell, who is also a local yoga teacher. “There was nothing like the Nike ‘swoosh.’ No one has that personality yet, that element that people can identify with.”