Wednesday, June 19, 2019
CEO of Hershey Confirms Company is ‘Evaluating’ the CBD Trend
On Tuesday, Hershey CEO Michele Buck appeared on CNBC’s “Squawk Box” to talk about the 125-year-old company’s recent success and plans for the future. This year, Hershey hit its highest stock price in history, up nearly 30 percent from last June, thanks to new growth strategies. And as the company looks to continue expanding its market, a move into the hemp CBD industry seems to make perfect sense for the snack company. CBD chocolates, gummies and other infused edibles are surging in popularity. Hershey is well-positioned to take advantage of the rapidly emerging trend. But while the company is closely evaluating CBD, Hershey’s CEO says there are no plans to add CBD to its products at this time.
Hershey Eyes Move into the CBD Market
In the alternative health and beauty market today, nothing is trendier than CBD. The enthusiasm surrounding CBD-infused health and beauty products only continues to grow. And their immense popularity among consumers looking for wellness alternatives has attracted the attention of some of the US’s largest retail chains. Companies are carefully and eagerly eyeing the evolving regulatory space around cannabidiol (CBD), looking for opportunities to expand CBD product lineups.
Some major retailers have already taken the plunge. Rite Aid, CVS and Walgreens, for example, all sell complete lineups of CBD-infused topical products in select states. Others, however, are still hanging back, like Coca-Cola, Constellation Brands and other beverage and food companies. And Hershey, like those companies, is taking a cautious approach.
Appearing on CNBC’s “Squawk Box,” Hershey CEO Michele Buck described CBD as “a huge trend.” She said that Hershey is “evaluating” the rapidly expanding CBD market, but that there are “no plans at this point in time” for Hershey to produce and sell CBD-infused chocolates. But the company “will continue to monitor and evaluate that trend in the food business,” Buck added.
CBD-Infused Hershey’s Chocolate? “Not Today,” Says CEO
So why would Hershey hold back from such an enormous opportunity? Because for now, the legal risks are too great for a company of Hershey’s size. Even though the federal government legalized hemp and hemp-derived products like CBD late last year, FDA and USDA regulations currently block many companies from offering a broader range of cannabidiol products.
The biggest obstacle is the FDA regulation against putting CBD in food, beverages or in dietary supplements. The FDA restricts the addition of CBD to food and has prohibited retailers from selling it in any ingestible oil, edible or drinkable product. Even in states where CBD-infused foods and beverages are legal, federal regulations prohibit their interstate commerce.
On “Squawk Box,” Hershey CEO Buck explained why these restrictions are causing the company to hold off on CBD offerings—for now. “Frankly, there’s some work to do from a regulatory perspective,” Buck said. “Currently, it is not legal to ship interstate a food product that has CBD.”
But while major companies like Hershey and Coca-Cola wait for the FDA to green light CBD-infused foods and beverages, smaller businesses are cashing in on the CBD craze.
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