Copyright © 2020 Albuquerque Journal
One of the first stores to sell CBD in Albuquerque was born in an unlikely spot: half of a 350-square-foot Nob Hill phone repair store.
Billy Giron, who co-founded of The CBD Boutique back in August 2015, remembers starting with just $500 worth of products containing cannabidiol, a compound derived from the cannabis plant. He said the products were mostly hidden behind a scratched-up glass case with no lighting.
“We really didn’t know how the business was gonna go, because there was no one else doing it,” Giron said.
It’s a far cry from where things stand today, for both Giron and Albuquerque’s CBD scene more broadly. Giron now owns two stores in Albuquerque, with another two stores slated to open in town by spring. He also owns and operates two stores in Denver, widely considered a stronghold of the cannabis industry.
“We’ve gone through a ton of ups and downs already, and we’re still chugging along,” Giron said.
In Albuquerque and across the country, the CBD industry has undergone a transformation. What was once a niche product frequently mistaken for psychoactive marijuana has gone mainstream over the last several years, and the compound has made its way into products ranging from hand creams to honey to dog treats.
While Giron and other early adopters are grateful for the industry’s growth, some remain concerned about a market that’s become increasingly saturated, a trend that includes the proliferation of CBD products in big-box stores.
“We’re not millionaires,” said Pam Martinez-Stahnke, owner of Rio Grande Hemp Co., which opened in Albuquerque in 2016. “We don’t have a huge investor behind us.”
What CBD does and doesn’t do
CBD is one of dozens of compounds active in the cannabis plant. Unlike the more infamous THC, the compound most active in psychoactive marijuana, CBD doesn’t get users high. Instead, industry advocates claim, the compound is helpful in treating a wide range of ailments, from chronic pain to anxiety.
The U.S. Food and Drug Administration has approved for market just one cannabis-derived drug – Epidiolex, an oral solution containing marijuana-derived CBD developed by English company GW Pharmaceuticals – to treat seizures from two rare and severe forms of epilepsy. Outside of that, CBD products have not received federal approval to treat any disease, and the FDA has issued warning letters against firms who market CBD products using claims that they can treat diseases or offer other curative effects.
“FDA continues to be concerned at the proliferation of products asserting to contain CBD that are marketed for therapeutic or medical uses although they have not been approved by FDA,” reads a statement on the federal agency’s website.
Despite the lack of federal approval, anecdotes about the benefits of CBD for pain management are not hard to find. Martinez-Stahnke credits CBD for helping her minimize the migraine headaches that came on after a bad car wreck. Giron, who spent about a decade as a professional freestyle motocross rider, said CBD helped him manage pain from a collection of back injuries he picked up while competing.
“It doesn’t completely take it away; it just makes it a lot more bearable,” Giron said.
CBD is primarily derived from hemp, cannabis that contains negligible levels of THC. Martinez-Stahnke said there are multiple approaches to extracting CBD from hemp. The product can be distilled into a sticky, honey-colored substance that still contains small amounts of other compounds from the plant, including THC. For customers who are frequently drug-tested for THC, Martinez-Stahnke recommends products that use CBD isolate, a powdery substance that she said contains virtually no THC.
Until hemp was legalized nationwide under the 2018 Farm Bill, CBD largely came from a handful of states, including Colorado and Oregon, that legalized hemp prior to 2018, along with Europe and Asia, Giron said.
Adapting to life in the mainstream
Martinez-Stahnke added that the passage of the Farm Bill really brought CBD into the mainstream, in Albuquerque and nationally.
In 2019, companies like Whole Foods, CVS and Kroger began carrying CBD products in stores across the country. Martinez-Stahnke said she’s also seen a sharp uptick in the number of specialty stores around New Mexico.
“I blinked and then it happened,” she said.
The trend has spread outside of New Mexico’s large population centers as well.
In Alamogordo, Katherine Tompkins opened the city’s first CBD store with her sister, Christina, in 2017. Tompkins said the store, PennEz – CBD Products, had to adjust its product line to accommodate Alamogordo’s location and proximity to Holloman Air Force Base. Tompkins said many of the store’s customers work at the base, which frequently tests personnel for THC and other drugs. Because of that, she said, the store shies away from smokable hemp, which contains trace amounts of THC.
“If somebody tests positive, it risks everybody’s well-being,” Tompkins said.
Even with the restrictions, Tompkins said CBD has been a big hit in the area, drawing residents from nearby La Luz and Cloudcroft. Some customers, she added, even found out about her store from other members of their congregation during church.
“I’m so happy (my customers) are talking about this in church,” Tompkins said, laughing.
Looking to the CBD industry future
CBD industry growth shows few signs of slowing. The Brightfield Group, a consumer intelligence firm for the CBD and cannabis industry, projected last summer the CBD market might surpass $4 billion in its first full year of operation, and could exceed $24 billion by 2025.
Despite those rosy predictions, challenges remain for stores currently operating. Despite the legalization of hemp, Giron and Martinez-Stahnke agreed finding banks willing to work with CBD shops remains problematic. Both had stories of banks dropping their accounts without warning, and Martinez-Stahnke said her company was without a bank or credit union for nearly a month in 2019.
The potential for recreational cannabis legalization poses both a hardship and an opportunity for CBD vendors. Many medical cannabis dispensaries also sell CBD products, as well as high-CBD strains of cannabis, and Martinez-Stahnke said legalization could make it easier for more customers without a medical card to buy CBD products without visiting a specialty store.
On the other hand, she said, new recreational cannabis could open up new wholesale outlets. Giron added he could see getting into the recreational cannabis business if it becomes legal in New Mexico.
Martinez-Stahnke and Giron agreed the proliferation of CBD products at big-box stores has made the market more competitive than it was three or four years ago, but added their biggest concern about the trend is the lack of one-on-one education at those stores.
“When you go to Walgreens, you’re not gonna get that one-on-one, intimate feel when purchasing the product,” Giron said. “And I still think that’s where the industry is at.”