The hemp-derived consumer packaged goods industry has grown rapidly since the passage of the 2018 Farm Bill, unlocking a new category of Delta-9 beverages, edibles, and smokable products that can legally move across state lines.
Recent industry disputes surrounding the sourcing of cannabinoids (Hemp D9, CBD, and other minors) often referred to as “hot hemp” or “synthetic” have brought attention to a critical but often overlooked part of the hemp supply chain. This in reference to a “chain of custody.”
In simple terms, a chain of custody refers to the documented trail showing where cannabinoids originate and how it moves through the manufacturing process. This documentation has trace origins from hemp biomass to finished end product.
For hemp-derived Delta-9 products, this documentation is not only essential, but will be required as there becomes a greater push for federal and/or state-specific regulation.
A chain of custody demonstrates that the cannabinoids used in a product are derived from legally compliant, non-synthetic hemp rather than cannabis containing higher amounts of THC than what is outlined in the Farm Bill. In addition, the documentation must detail each stage of the process, including cultivation, extraction, manufacturing, formulation, and legitimate third-party testing.
As federal lawmakers consider potential changes to hemp regulations and states implement their own rules governing intoxicating hemp products, manufacturers and brands will likely face increasing pressure to provide clear, verifiable sourcing documentation.
This shift is not necessarily a negative development for the industry. In fact, stronger chain-of-custody standards may ultimately help stabilize and legitimize the hemp-derived cannabinoid market and push out the bad actors littering the market with unverified/untested products.
From the perspective of an input and ingredient provider, it is our responsibility to practice due diligence and educate brands and operators on these essential documents.This includes how to read and understand them and why they’re so imperative to operating compliantly. Not having a legitimate chain of custody (or a chain of custody at all) could lead to fines, penalties, license revocation, recalls, and even lawsuits.
Operators who prioritize transparent sourcing, testing, and documentation will be better positioned to build long-term brands, maintain retailer trust, and navigate future regulatory changes.
In a market that is still defining its standards on a national and state-specific level, one principle is becoming increasingly clear: Compliance doesn’t start with the finished product. It starts with the source.
However, with rapid growth comes increased scrutiny.
Drop us a line if you’d like to see what a real compliant chain of custody looks like.