Why are consumers confused between hemp-derived and cannabis-derived products?

Consumer confusion between hemp and cannabis products stems primarily from inconsistent labeling, product formulation practices that exploit regulatory gaps, and the absence of clear retail channel distinctions. The most significant driver is the dry-weight THC measurement loophole: the 2018 Farm Bill limits hemp products to 0.3% THC by dry weight — a standard intended to keep hemp non-intoxicating — but manufacturers can produce large-format products that deliver meaningful psychoactive doses while technically complying with the percentage limit. Fitzpatrick shared a concrete example from the broadcast: a consumer who had never tried marijuana purchased a large CBD chocolate bar and was unexpectedly intoxicated, calling to say 'I don't know what happened. Like this is supposed to be CBD.' This confusion extends to product potency, intended effects, and appropriate retail channels — creating both safety concerns and market distrust.

What is form-factor-based regulation and how could it improve hemp-cannabis differentiation?

Form-factor-based regulation would classify and regulate cannabinoid products based on their physical form, potency level, intended use, and appropriate retail channel — rather than solely on whether the THC is derived from hemp or marijuana. Tyler Klimas proposed this framework during the panel, noting that hemp beverages have already achieved natural market separation by occupying mainstream retail channels like Total Wine while high-potency products concentrate in smoke shops and unregulated venues. Klimas framed the regulatory question directly: 'Maybe eventually we are looking at final product forms that are THC regardless of where they're derived from. What are the product safety guidelines around those THC products? Where are the appropriate retail avenues for those THC products?' Under this approach, a low-dose hemp-derived THC beverage and a marijuana-derived beverage of similar potency might face equivalent regulations, while high-potency hemp-derived products would be subject to the same restrictions as dispensary products regardless of source material.

Why is restricting hemp products too aggressively risky for public safety?

Overly restrictive hemp regulation — particularly blanket THC bans — creates illegal markets by eliminating legal supply while leaving consumer demand unchanged. Klimas warned against this overcorrection explicitly during the panel: 'If they went too far the other way, if there's a ban on any THC and the hemp CBD side, we do know that what will happen is there will be still demand for those products and there'll be a black market.' This creates a public health paradox: the regulated hemp market, despite its labeling and potency challenges, requires third-party testing and accountability that the illegal market does not. Removing compliant products from legal retail does not eliminate demand — it redirects consumers to unregulated supply chains with no safety standards, no testing requirements, and no product accountability.

How does the kombucha-alcohol analogy apply to hemp and cannabis regulation?

Jena Murray offered the kombucha-alcohol analogy to illustrate how products with meaningfully different potency levels can coexist in the market under distinct but proportionate regulatory frameworks. Just as kombucha contains trace alcohol and is regulated differently from beer and wine — based on typical use patterns and intoxication risk rather than on whether it technically contains alcohol — hemp-derived CBD products with minimal psychoactive potential could be regulated differently from intoxicating THC products regardless of source material. Murray acknowledged the limits of the analogy with characteristic directness: 'Let's be serious if a kid pounds multiple kombuchas I'm pretty sure they're going to get drunk.' The analogy supports tiered, potency-based regulation where non-intoxicating or low-dose products occupy a regulated wellness or beverage category while higher-potency products face dispensary-equivalent restrictions — protecting consumers while preserving space for legitimate hemp wellness products.

What role does industry self-regulation play in hemp-cannabis product differentiation?

The panel identified industry self-regulation as a viable near-term path for establishing product category standards while awaiting federal regulatory clarity. Klimas described how standards for product potency categories, consumer warnings, testing requirements, and recommended retail channels could help legitimate businesses distinguish themselves from less responsible market participants — creating the market differentiation that benefits both consumers and compliant operators. Murray reinforced this with the consumer education angle: 'I think that we just need to keep educating and making sure that products are safe that are being sold and not having major issues so that way we can continue to have a strong argument as to why these products can exist in a market.' Qredible's Q-Certification provides the verification infrastructure that enables this self-regulatory approach — a continuously monitored compliance credential that signals to retailers, payment processors, and consumers that a product meets defined safety and labeling standards.

Market Differentiation Between Hemp and Cannabis Products

Q: What is the dry-weight THC loophole and why does it matter?

The dry-weight THC loophole refers to the 2018 Farm Bill's definition of legal hemp as containing no more than 0.3% THC measured by the dry weight of the product — a measurement standard that enables manufacturers to produce large-format hemp products that deliver intoxicating doses while complying with the percentage limit. As Fitzpatrick explained during the broadcast, the limit 'was intended obviously to keep hemp products as non-intoxicating, but it's created an opportunity to make the bar bigger.' The loophole is particularly significant for edibles: a large chocolate bar at 0.3% THC by dry weight can contain considerably more THC than a consumer expects. The panel identified this as a driver of increased emergency room visits and a key reason why product form-factor regulation — governing the total dose in a product rather than the concentration percentage — may be a more consumer-protective approach than source-material classification alone.

Market Differentiation Between Hemp and Cannabis Products

Category: Videos

Author: The Qredible Team

Date: August 13, 2025

The current marketplace for cannabinoid products suffers from an identity crisis, with consumers often unable to distinguish between hemp-derived and cannabis-derived offerings. This confusion extends to product potency, intended effects, and appropriate retail channels, creating safety concerns and market distrust.

During a recent Qredible Live Broadcast, industry experts Tyler Klimas, Jena Murray, and Joseph Hickey Sr. explored the challenges of product differentiation in cannabinoid markets. This discussion highlighted how clearer distinctions between product categories could protect consumers while allowing both hemp and cannabis businesses to establish distinctive market positions.

The Product Differentiation Challenge

The conversation revealed how product differentiation issues have created consumer confusion. Brian Fitzpatrick shared a telling example:

"I use an example of a friend who never tried any marijuana before went to a CBD store, bought a chocolate bar that was huge. And he was shocked when he got intoxicated as a real, you know, he got high off of this thing. And he called me and said, 'I don't know what happened. Like this is supposed to be CBD.'"

This confusion stems from how products are formulated and labeled. Fitzpatrick explained the technical loophole: "It's .3% THC by dry weight, which is the limit in the farm bill... that was intended obviously to keep hemp products as non-intoxicating, but it's created an opportunity to make the bar bigger."

The Emergency Room Problem

The discussion addressed concerns about health impacts resulting from inadequate product differentiation. Fitzpatrick noted:

"Now all of a sudden there's all these different things that are sort of changing the THC content or what they can actually do and making people high and we do know that emergency rooms visits have increased as a result of some of those things."

This safety concern has fueled calls for stricter regulation in some states. However, Klimas cautioned against overcorrection: "If they went too far the other way, if there's a ban on any THC and the hemp CBD side, we do know that what will happen is there will be still demand for those products and there'll be a black market."

Product Categories and Form Factors

A promising approach to market differentiation focuses on product form factors rather than simply source material. Klimas observed natural market segmentation already occurring:

"When you look at other areas of hemp products, you know, it's a spectrum. There's the worst cases of the products you're finding in smoke shops and gas stations and convenience stores, but then there's better cases like beverages for example, which have seemingly separated themselves from other hemp product categories."

This observation suggests product categories could provide clear market boundaries:

"Maybe that alludes to a final product form regulation... maybe eventually we are looking at final product forms that are THC regardless of where they're derived from. What are the product safety guidelines around those THC products? Where are the appropriate retail avenues for those THC products?"

Retail Channel Distinctions

The discussion highlighted how retail channels play a crucial role in product differentiation. Certain hemp-derived products have already established distinct retail identities:

"They're being sold in normal retailers like Total Wine and more in multiple states," Klimas noted about hemp-derived beverages, suggesting that market differentiation could occur naturally through appropriate retail channels.

This approach would create clearer consumer expectations based on where products are purchased. Products sold in dispensaries would carry different expectations than those in mainstream retail, regardless of source material.

Labeling and Education Needs

Improved product labeling represents another critical element of market differentiation. Murray, as president of the US Hemp Round Table, emphasized the importance of consumer education:

"I think that you know we just need to keep educating and making sure that products are safe that are being sold and not having major issues so that way we can continue to have a strong argument as to why these products can exist in a market."

Clear, standardized labeling that communicates potency, expected effects, and source material would help consumers make informed choices while reducing accidental misuse.

Industry Self-Regulation Opportunities

While waiting for federal clarity, industry self-regulation offers a potential path forward. Established standards for product categories, testing, and labeling could help legitimate businesses differentiate themselves from less responsible market participants.

Klimas suggested this approach could help address safety concerns: "When you talk about coexisting, in addition in coordination with a federal floor and an agency that can make sure products are safe, maybe eventually we are looking at final product forms that are THC regardless of where they're derived from."

This self-regulatory approach would establish standards for:

Product potency categories (non-intoxicating, low-dose, moderate-dose, high-dose)
Appropriate consumer warnings
Testing requirements
Recommended retail channels

A Comparison Framework: The Kombucha Model

Murray offered an insightful comparison to alcohol regulation: "I sometimes think of it as alcohol and kombucha. Kombucha has low levels of alcohol in it and is regulated differently and I mean let's be serious if a kid pounds multiple kombuchas I'm pretty sure they're going to get drunk."

This analogy illustrates how related products with different potencies can exist under distinct regulatory frameworks based on typical use patterns and consumer expectations.

Building Product Identity

For the hemp and cannabis markets to mature responsibly, establishing clear product identities through form factors, potency standards, and appropriate retail channels offers the most promising approach. This would allow consumers to make informed choices while creating distinct market segments for different business models.

By developing recognizable product categories with consistent standards, both hemp and cannabis businesses can build consumer trust and brand loyalty. This approach would move beyond the current source material focus to emphasize product attributes that matter most to consumers: effects, safety, and quality.

Through thoughtful product differentiation strategies, both industries can grow alongside each other with clear market boundaries that serve consumer needs while addressing legitimate safety concerns. This consumer-centered approach offers the best path toward long-term market stability and growth for both hemp and cannabis products.