Understanding the entire CBD isolate or hemp extract supply chain is more important than ever before. With state regulations and retailer requirements changing everyday, it's imperative that your chain of custody is buttoned up starting with the hemp! After all, you've invested a lot into the making of your products. Make sure you understand how your manufacturer sources the hemp they extract and the implications of each strategy.
The 3 Most Common Sourcing Strategies
Spot purchasing hemp is a necessity for some processors if they do not have a supply contract in place. It can be risky if the appropriate screening is not completed. Requesting COAs and an industrial hemp farm registration is not enough. These are and can be easily doctored. It is important for your processor to have the direct contact of the farm, to visit the farm, and always test a sample of the lot before purchase to validate the COAs. How do you know if they do? Request the COAs, ask if they keep a retain sample of the hemp for testing, and see if you can visit the farm too!
Aggregation From Many Farms
Another typical sourcing strategy of hemp processors is to create a network of many farms to save on cost through toll processing and to increase leverage for price negotiations. One risk of an aggregation strategy is a lackluster audit program. With such a wide reach, the producer needs to have an equally comprehensive vetting program of its many hemp sources. For you, it is important to make sure that each product you purchase is traceable back to the individual farm and that you have each set of documentation on file for each batch. As hemp aggregators will mix lots, you may need 2 or more sets of source information for each purchase!
However, the biggest disadvantage of a hemp aggregator is inconsistency in product. Even the same hemp strain can vary widely when grown under different conditions. This results in very inconsistent profiles of the most prevalent and important active cannabinoids (CBD, CBG, CBC, CBN) and terpenes. All of these variances will affect your customer's experience with your product lot to lot. A great question for hemp aggregators is how do they track data on their extract profiles and what is their SOP for testing incoming lots? How do they homogenize lots and how many samples are they testing per lot
Direct Supply Contract With The Farm
The most conservative sourcing strategy is to have a supply contract in place with one or a few farms. This may mean your processor is spending more on hemp than an aggregator, but they're paying for higher quality, consumer safety, and security in supply. It is also a signal that they have a solid relationship with the farm and a solid compliance program. An airtight supply contract is equally as beneficial as vertical integration when it comes to quality. Supply contracts not only safeguard a processor's supply, but it's also a sign that your product will maintain consistency over time. The same risks of doctored COAs remain, so it's important to verify. We find processors holding supply contracts directly with a farm would have no problem with a customer visiting. There's no better way to validate a supply chain than visiting in person!
What testing does your processor perform on their raw material? Do you have it on file?
Testing raw material is just as important as testing the end product. We've heard some retailers and states are now requiring to see the testing of raw material for compliance purposes. Your CBD isolate or extract manufacturer should be able to show you passing potency, pesticides, and heavy metals COAs on the raw material that are traceable to the end product you are purchasing.
This is the documentation your manufacturer should have available:
- Industrial Hemp Farm Registration from the respective state's Department of Agriculture.
- State potency testing of the hemp crop, if completed.
- 3rd party potency, pesticide, and heavy metal COAs of the raw material lot associated with your purchase.
- And, don't forget to ask if you can visit the farm!