Hemp Companies & Hand Sanitizer – How Long Will it Last?

As the world around us changes, many CBD and Hemp companies are finding ways to change with it to keep their businesses thriving and their employees working during this unprecedented time.  One trend that continues to be seen over and over again in CBD and hemp extraction companies is getting into the hand sanitizer market.  As the demand for sanitizer has gone through the roof, and the FDA continues to loosen regulations on production in order to meet this demand, many of these companies have found that they are in a unique position to make this transition and lessen the COVID-19 Impact on the hemp and CBD industry.

New Regulations

The FDA considers hand sanitizer an over-the-counter medication and has historically regulated it as such, which would have meant that a CBD producer couldn’t just switch to hand sanitizer without undergoing a registration process with the FDA.  In response to the public health crisis posed by COVID-19, the FDA has issued a  Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19) which includes guidelines and circumstances in which the FDA “does not intend to take action when these companies prepare alcohol-based hand sanitizers for consumer use and for use as health care personnel hand rubs for the duration of the public health emergency”.  This easing of regulation has opened the door for businesses to step up to meet the needs of the nation during this time.

The easing of restrictions is not the only reason we are seeing so many hemp extraction and CBD producers pivoting to hand sanitizer.  These companies are well positioned for this transition for other reasons, one major player being denatured ethanol.  Denatured ethanol is the main solvent used by these companies in hemp extraction, and it is also FDA approved and the main ingredient in hand sanitizer.  Most of these producers have vast amounts ethanol on hand, as well as the supply chain necessary to support continued production.

Access to Equipment

Another key component for producing hand sanitizer is bottling equipment, as well as bottles and caps for packaging and resale.  As many of these firms produce oils and tinctures for sale to consumers, they have bottling capabilities and production lines in place already.  Switching production lines from hemp based products to hand sanitizer requires little modification.  Additionally, many of these producers have bottles and caps for the products on hand, which has become uniquely valuable as the vast majority of these items are produced in China.  With shut downs and restrictions in China and around the world, acquiring these items has meant long waiting periods and supply chain struggles, which has been a contributing factor in the ability for the existing hand sanitizer producers to keep up with demand.

Over the last several months, dozens of hemp extraction companies have pivoted to include hand sanitizer production as part of their business.  Some have included hemp or CBD in their formula, some have not, but all have managed to provide a much needed product and provide steady, essential work for their employees during this crisis.

Seeing companies pivot their business to hand sanitizer is not necessarily ground breaking news these days.  However, what will be interesting is to see how many businesses stay in the hand sanitizer space.  Will generations continue to demand more of this product, due to the impact the pandemic has had on how we view the world?  If the CBD market dwindles or federal guidance makes it more restrictive in the future will this be another avenue for companies to take?  Time will tell. Our bet is that companies in the hemp industry will continue to pivot to meet new and changing demands.

If you have further questions on how the CBD and Hemp Industry has been impacted by COVID-19, and potential operational and business strategies to consider please reach out to me at mhopkins@teamdkb.com.