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CBD Business Booming in Milwaukee

Matthew Wetzel was first introduced to cannabis oil in 2014 when he was sitting in Froedtert Memorial Hospital’s cafeteria. His son was suffering from seizures, and he stepped away from the hospital room to get a bite to eat. Sanjay Gupta was on CNN, reporting on families that were using cannabis to treat ailments in their children. “I was thinking, ‘What the fuck would I give my kid weed for? No way,’” he recalled.

As he kept watching, he realized that the children on television were suffering from the same seizures as his son. One family had an especially profound effect on him. “The dad’s a military guy—where I have some military background—and he’s from the state of Wisconsin,” Wetzel said. “I’m like, ‘Wow, the stars have aligned here, and the universe is trying to tell me something.’” Wetzel said that he decided then and there to go to Colorado and learn more about medical cannabis.

Wetzel packed up his car and drove to Colorado Springs, Colo., where he was briefly homeless. He was eventually able to bring his then-fiancée and son out to him. This is when he began giving his son cannabidiol, an increasingly popular, non-psychoactive derivative of the cannabis or hemp plant better known by the shorthand CBD. Wetzel credits CBD for stopping his son’s seizures.

After seven months in Colorado, Wetzel moved back to Wisconsin, where he recently opened Laughing Grass Hemp, a CBD-only dispensary in West Allis. He has also become a leading advocate for hemp and CBD, working on the grassroots level and with state agencies to form policy at a time when laws are rapidly changing for the hemp plant.

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Long Road to Legality

In the 2014 federal farm bill, Congress included a provision that allowed universities and state departments of agriculture to set up pilot research programs to grow industrial hemp. The state of Wisconsin did not act on this opportunity until November 2017, when Gov. Scott Walker signed a bill into law directing the Department of Agriculture, Trade and Consumer Protection (DATCP) to create a pilot program.

DATCP was tasked with having the program up and running for the 2018 growing season, though it normally takes 18 months to set up a new program of this kind, according to DATCP spokeswoman Donna Gilson. This forced the department to accelerate through the process with what is called an “emergency rule,” bypassing public hearings and other processes. “We just gathered our forces and cranked out this law and were ready to begin licensing by March 1,” Gilson said.

Though DATCP does not have specific numbers, it seems that a majority of hemp farmers in Wisconsin were looking to use their crops for CBD products. “Just from talking with people, it was clear that was by far what the most people were interested in growing industrial hemp for,” Gilson said. “I think it’s viewed as the most profitable product, as opposed to using it for fiber or for seed or for grain to be used in food products.”

The only problem was the Wisconsin Department of Justice (DOJ) deemed CBD illegal, at first. A DOJ memo, released in late April, said that CBD products—even those with no THC, the chemical in cannabis that makes you feel high—were illegal to possess or distribute, except in limited circumstances for individuals possessing a doctor’s certification.

After DOJ staff met with members of the state legislature, Wisconsin Farm Bureau Federation and DATCP, the department decided to change course. Attorney General Brad Schimel released a statement advising law enforcement not to take action against CBD products made from industrial hemp grown under the pilot program until Congress made a decision in the 2018 farm bill.

That bill, which President Donald Trump signed last week, looks like a big win for the hemp and CBD industry. It completely removes hemp and its extracts, including CBD, from the Controlled Substances Act. “The Drug Enforcement Administration no longer has any possible claim to interfere with the interstate commerce of hemp products,” according to a memo released by the U.S. Hemp Roundtable. This should add steam to an industry that is already booming in the Milwaukee area.

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A Booming Business

In 2017, United States CBD sales grew to more than $350 million, with some observersestimating that the market will grow to $2.1 billion by 2020. At least 10 CBD dispensaries have opened in the Milwaukee area this year, with more seeming to be opening weekly.

Rachel Cartwright, who owns CBD Therapeutics of Wisconsin, attributes CBD’s massive popularity to the perception that it provides the health benefits of medical cannabis without the social stigma. “We have this industry that’s blowing up, that is going to be bigger than the medical cannabis industry,” she said, “because the people who do not believe that marijuana consumption is publicly-acceptable do believe that CBD is. You’re actually reaching a much broader audience than we would with cannabis, so more and more people are starting to go into the industry seeing the dollar signs.”

But as new entrepreneurs see dollar signs in a red-hot industry that, until just last week, operated in a relative legal limbo, some products are more reputable than others. “CBD is about as poorly regulated and understood as a product this popular can possibly be,” journalist Dan Nosowitz recently wrote in an article for Vox. “From a medical perspective, it’s promising; recreationally, it’s interesting. But that doesn’t mean the stuff you’re buying works.” \

CBD products made by national brands are popping up in all sorts of places across the city, from mall kiosks to gas stations, with varying levels of quality. Since 2015, the Food & Drug Administration has sent warning letters to at least 18 companies for selling products with false and misleading labels with inaccurate CBD levels listed. “You have to be extraordinarily careful about these products, where they’re coming from and what they actually contain,” Cartwright said. “There have been problems in the industry that have already been reported. Those problems are only going to get worse as the industry expands, and more and more money hungry, non-discretionary people are coming in.”

Both Wetzel and Cartwright claim to offer a more holistic approach to selling CBD. At Laughing Grass Hemp, Wetzel and his employees even call their customers “patients.” “The reason we do that is because we’re providing them something much more than a kiosk in the mall,” he said. “You can’t buy anything from our store unless you get to the knowledgeable budtender first, just like in a dispensary.”

Still, the outlook on hemp and CBD is mostly positive. With hemp’s full legalization on the horizon, Wetzel is having flashbacks to the 1940s, when Wisconsin was one of the world’s leading producers of the plant. “We could be one of the richest states because of hemp,” he said. “No doubt about it. That’s hard for people to understand, but in the next five years we could be the hemp capital of the world again.”