As legality evolves, the South Austin CBD market continues to expand

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Reliv Organix, Greenbelt Botanicals and Green Herbal Care are a few of the businesses South Austinites might have noticed popping up around town over the past few months, all selling the ever-more-popular wellness product CBD, or cannabidiol.

CBD is a substance derived from either marijuana or the related hemp plant, which has significantly less of the psychoactive component tetrahydrocannabinol, or THC.

What might be surprising to some, considering the ubiquity of such stores, is that these CBD retailers may not until recently been operating legally.

Commercial CBD, derived from hemp, is only now poised to become widely legal in Texas. The state Legislature in May voted to pass House Bill 1325, allowing Texas farmers to grow hemp and making the sale of products like CBD oil legal, so long as the product contains less than 0.3% THC. With approval from the governor’s desk June 11, the already numerous CBD-specializing shops in the Austin area, including at least seven in South Austin, will be legal in September, matching the federal decision of the 2018 U.S. Farm Bill.

For many local store owners, the choice to sell CBD while still legally in the grey was based on a desire to capitalize on a booming wellness trend.

“We wanted to get on this train before [it]was gone,” said Oz Millman, a co-owner of Green Herbal Care, a CBD business in Sunset Valley.

Trend or medical necessity?

CBD has been said to help with issues from anxiety to skin irritation to chronic pain, according to doctors and CBD retailers who spoke to Community Impact Newspaper. However, without legal status, little scientific testing has been completed to authenticate these claims.

One exception is in regard to patients with epilepsy. With support from the parents of children with severe, drug-resistant epilepsy, California-based drug trials for a THC-free CBD product called Epidiolex resulted in federal approval, according to the Food and Drug Administration. This research also opened the door for states such as Texas to legalize CBD for patients with intractable epilepsy.

Since 2017, marijuana-derived CBD oil has been sold legally to eligible Texans through the Compassionate Use Act program, through which three Texas companies are licensed to cultivate, produce and dispense medical-grade CBD oil, which can contain up to 0.5% THC and must contain at least 10% CBD, to patients with intractable epilepsy. One of those companies is Compassionate Cultivation, located in Manchaca.

“We control 100% of the chain of events, from when that plant is a little seedling to when it’s actually ingested by our patient,” said Mike Rubin, co-founder and vice president of business development for Compassionate Cultivation.

The Manchaca company is vertically integrated, according to Rubin, meaning that Compassionate Cultivation is responsible for every step, from planting to processing to delivery. While patients may retrieve their prescription CBD from the dispensary located at Compassionate Cultivation, the company also makes deliveries to patients across the state. This rigorous chain of custody is required by the Texas Department of Public Safety, which regulates Compassionate Use Act companies.

With the legalization of over-the-counter CBD products and the possibility for standardized regulation of products, the question might arise as to why a patient would continue to use prescription CBD if a similar product is available in a nearby shopping center, drugstore or gas station.

Rubin said he believes that for patients with intractable epilepsy, who have already established CBD regimens, the previous lack of regulation and quality control in the commercial CBD space presented a risk not worth taking. Without thorough vetting, CBD products may contain pesticides and heavy metals, or may actually contain very little actual CBD, he said.

“One thing’s for sure: We know what’s in our [Compassionate Cultivation] products,” Rubin said. “I think people who are truly struggling are always going to want the real thing. If they have access to a prescription medication, they’re going to use it.”

Terri Carriker, whose 16-old-daughter has intractable epilepsy, told Community Impact Newspaper her daughter uses a combination of Epidiolex and CBD obtained through the Compassionate Use program.

“I would never buy something off the shelf for myself, much less for my daughter,” she said.

Dr. Karen Keough, an Austin-area physician licensed to prescribe CBD, said she would not recommend over-the-counter CBD to anyone until serious regulation is implemented.

“A lot of people are buying empty bottles,” Keough said. “They’re buying empty bottles, and that’s a sham. That’s fraud. You don’t know what’s fraud and what’s not. So you’re trusting your vendor.”

Commercial products

Over-the-counter CBD retailers are still attracting business. While the recently approved HB 3703 will extend the Compassionate Use Act to cover more conditions, including incurable cancers; all forms of epilepsy; autism; multiple sclerosis; and neurodegenerative diseases, like Alzheimer’s disease, for Texans with conditions such as anxiety and chronic pain, over-the-counter is currently the only option.

Several CBD sellers that spoke to Community Impact Newspaper said they have implemented their own rigorous vetting for products, requiring third-party analysis for the CBD they sell, including Millman of Green Herbal Care and Hans Enriquez of Lazydaze Counterculture & Coffeehouse, a CBD and coffee shop. Enriquez said he looks forward to regulated vetting of products at an industry level, however.

“I welcome the evolution of this industry, plain and simple,” he said.

Like Compassionate Cultivation, Enriquez’s business applied for a license to sell legally prescribed CBD under the Compassionate Use Act, and like 39 of the other 42 applicants, he did not receive a license. However, Enriquez and his business have continued to value innovation in the commercial space, hosting Texas Green Rush, an organization that educates potential businesspeople interested in a “responsible Texas cannabis economy.”

Lazydaze now has 12 franchised locations, which have expanded from the first shop in Laredo into several areas of Austin, including in Southwest Austin on Manchaca Road. That location is owned and operated by Chris Houston, a former NFL player who himself uses CBD for pain related to athletic injuries after discovering it when searching for relief for his mother, who has epilepsy.

Soon, the business will expand outside of Texas with a location in Pittsburgh, according to Enriquez. Ultimately, he and his wife, Monica, say they want to open locations across the United States, billing Lazydaze as “the Starbucks of weed,” and tailoring each store to the legal options in each state.

The future of CBD in Texas

As for Texas, advocates are still working to expand the medical applications and qualities of CBD, allowing for increased THC in the product, from which some patients, particularly those with autism, are thought to benefit.

“The next battle is getting legislators educated in some of the up-and-coming research,” Carriker said. “It’s unconscionable that people are suffering so unnecessarily. It’s not going to be a miracle cure-all, but doctors should be able to have it in their toolboxes for patients and situations where it’s appropriate.”

The current expansion of the Compassionate Use Act is poised to significantly expand Compassionate Cultivation’s business. Rubin credits the expansion to the success many patients with epilepsy have experienced with CBD.

“I think that the results that we’ve seen with intractable epilepsy have really moved the needle, not just with providers and physicians, but with legislators and our lawmakers,” Rubin said. “In the stories that we’ve seen, the success stories, the children who went from suffering from hundreds of seizures a day to being completely seizure-free once starting our medication, those stories move your soul.”

Doctors, like legislators, have required convincing that CBD can serve as a safe and effective medication.

“In the world of medicine, especially in really hard medicine, the desperate, incurable cases, there’s a new cure all the time, right?” Keough said. “It has a big splash, and then it gets discredited.”

However, Keough was convinced after seeing firsthand evidence and learning about the success of the Epidiolex trials. She said she has prescribed CBD to around 150 children with epilepsy in the past year. Not all patients see drastic results, but some do, and most continue to use CBD, she said.

“Once people find something that works, they hold on to it and don’t let it go,” Rubin said.

Additional reporting by Jack Flagler and Kelly Schafler.

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Olivia Aldridge
Olivia is the reporter for Community Impact's Southwest Austin edition. She graduated from Presbyterian College with a bachelor's degree in English and creative writing in 2017. Olivia was a reporter and producer at South Carolina Public Radio in Columbia, South Carolina before joining Community Impact in Austin.
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