South Carolina’s hemp industry could radically change next week if a vote in the S.C. House of Representatives goes against the industry, two area businessmen believe.
Tyler Murray and Cody Callarman, founders of local CBD gummy company Carolina Dream, say they believe their business has about a 50% chance of being impacted big-time because of a bill that would heavily restrict the sale and purchase of hemp-derived products like CBD-infused beverages, gummies and more.
“If this bill (H. 3924) passes, people would only be able to buy 10 mg beverages and gummies in four-packs at liquor stores,” Callarman said. “No online sales, no mom-and-pop shops, no e-commerce in South Carolina. No nothing.”
The bill passed in the state Senate in March after an 11-hour debate and weeks of discussion. Now if the bill passes in the House with no changes, it will go to the governor to be signed into law. If there are any amendments, it must be sent back to the Senate — an outcome Murray and Callarman say could likely kill the issue for now as the legislative session is set to end next month.
Murray said from some angles, you can say it’s “totally not a ban,” but for small local businesses or new start-ups that rely on online sales, which is about 90% of the market together, he said, it might as well be.
“For us to pivot our packaging, just to make sure it’s compliant with this new bill … if liquor stores even wanted to sell it, it’s a $20,000 to $30,000 expense. Other, smaller companies can’t do that.”
And that’s a big if. Big box liquor stores would have to construct specialized cabinets and counters to house the restricted substances and reorganize their inventory to accommodate. Callarman said he isn’t convinced many places would be willing to go through the trouble.
Time to stock up?
Fortunately, a lot of modern hemp-derived CBD products have a pretty long shelf life. But not all of them.
“People are talking about hemp flower right now, but that’s going to go stale,” Murray said. “The cannabinoids that actually bring you relief decompose over time, and then you’re just smoking something that isn’t good for you.
“Drinks go bad — specifically the can liner,” he added. “It just doesn’t play nice with cannabinoids, and you end up with plastics and metal in your beverages.”
But gummies, the guys at Carolina Dream discovered, can be made to last.
“We aren’t the only ones doing it, but if you make them properly and use the right packaging … I mean, I have some in my truck that have been sitting, open, for three weeks.”
Imagine how long they last properly sealed and stored.
Most CBD gummies can last up to two years, with potency and freshness starting to decline between six and 12 months. To maintain quality as long as possible, it is recommended to store them in a cool, dark place below room temperature, as heat and light can accelerate degradation. Once opened, it is recommended to consume gummies within six months for maximum effectiveness. Refrigerators and freezers can extend the shelf life even further.
‘Now is probably the time’
Retailers who carry hemp products will have 60 days to sell through their inventory if the bill passes, and Murray said that he doesn’t expect any of them to maintain their stock during that period.
“Scarcity is going to happen almost immediately, and prices are going to go up across the board,” he said. “Shipping timelines will also start to get longer. … So now is probably the time, if you’re going to stock up.”
Murray said it’s interesting to come face-to-face with the macro-economic realities that the bill has forced him to reckon with.
“We talk all day about business analytics, and that’s fun to go into,” he said. “But when you’re looking at these large-scale constraints — what can you do about it? Well, we can lobby, and we have. You can encourage customers to reach out to their representatives, and we did that, too.”
Callarman said he worries for the larger impact of losing the hemp industry that has taken root in South Carolina.
“The state sees about $500 million in sales every year, and that’s a conservative estimate,” he said. “That’s $40 million in tax revenue that would disappear overnight.
“It just doesn’t have to be this complex. You can get rid of 99% of the problems with two things: an age gate, ideally 21 years and up, and quality testing for products. … But if you ask me, it’s just a lot of outdated and older senators and House representatives that are against this for no good reason.”
Help keep the City Paper free.
No paywalls.
No subscription cost.
Free delivery at 800 locations.
Help support independent journalism by donating today.