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Shop Sells Pot, Minus the High

Two brothers from Burbank have bet their business on a compound from hemp and cannabis that some claim is able to heal without producing a high: Cannabidiol, or CBD. “One of our customers said it really well: There’s no high, just relief,” Gerland Avetisyan, who goes by Gary, told the Business Journal. He and his brother Grigor (Greg) opened their boutique Topikal Everything Hemp Store in Tarzana in 2016, becoming the first brick-and-mortar retailer in California to sell only products containing CBD. A year and a half later, they have expanded into Venice with a new storefront along the boardwalk. The location opened April 21. CBD is a hot ingredient in the retail space. The compound is showing up in everything from bath bombs to bottled water to cosmetics; the market for CBD in consumer products is expected to hit $1 billion by 2020, according to a report from cannabis industry market research firm Brightfield Group. Still, some question the product’s real medical value, particularly since there is little scientific research to back up the wide range of benefits proponents claim CBD delivers. Others question its credibility based on its association with the marijuana industry. “A lot of people are skeptical about this stuff because they relate it to that psychoactive high, but you really have to try it to believe it yourself,” Greg Avetisyan said. What is Cannabidiol? CBD can be derived from either cannabis sativa – the marijuana plant – or hemp, a crop now grown in several U.S. states thanks to the Industrial Hemp Farming Act of 2017, which distinguished hemp from marijuana so it could be produced as a commodity. The CBD products sold at Topikal are hemp-derived, so they contain either trace amounts of THC, the active ingredient that produces a marijuana high, or none at all. Topikal has its products tested for purity to affirm its “no THC” claim, Gary Avetisyan said. Topikal sells products from other manufacturers as well as its own line, which includes oil-suspended tinctures and lotions. The price for the company’s bottle containing 30 doses of the lowest concentration of CBD is $45, while the highest concentration is $140. Lotions are applied to the skin, while the tinctures are taken under the tongue. A dropper full of CBD oil sublingually can supposedly reduce inflammation throughout the body, which proponents say reduces anxiety, alleviates pain and can even improve atherosclerosis. The clinical evidence for those miraculous effects is scant, at best. But users are adamant that the compound brings them relief, particularly from pain; the Avetisyan brothers themselves were inspired to open Topikal in part because of its effectiveness treating Greg’s rheumatoid arthritis, they said. “We started as consumers ourselves,” Gary Avetisyan said. “We were trying to spread our knowledge and the benefit we were getting from the CBD to a wider range of customers.” The fact that the compound does not produce a “high” was a strong selling point for the Avetisyan brothers, as it is for their current customers. They had attempted to alleviate anxiety and pain with tetrahydrocannabinol – or THC – products in the past, but did not like the results. “A lot of the THC products would give us opposite effects, like anxiety and paranoia,” Greg Avetisyan explained. “We were really looking for the main medical benefits without the psychoactive effect, and knew there was a market like us that didn’t want the high.” Still, it’s almost inconceivable that CBD oil on its own – much less a bottle of water or a bath bomb – could cure cancer, as some online sellers claim. Such dubious notions cast doubt on the industry as a whole, particularly in the face of limited research. CBD manufacturers should be scrutinized by the FDA and held to the same testing standards, USC School of Pharmacy Professor Joey Hays told the Business Journal. “(Medications have been) approved by the FDA through rigorous human trials on the basis of scientific evidence that the label does what it says it does,” Hays said. “That’s certainly not the case for these herbal extracts. Who knows what the quality and variability of the dose is?” There is also a risk that the products could be contaminated, he added. On top of that, the enormous variety of cannabinoids in marijuana and hemp could have different effects on the human body depending on how they interact, Hays said. For example, some combinations of cannabinoids might relieve pain but could induce anxiety in the process. “There’s a lot more science that we need to do before we can have valuable products out of this class of molecules,” Hays said. Still, pharmaceutical companies are showing interest in the compound, particularly in the realm of treating neurological disorders. GW Pharmaceuticals plc, a biotech in the U.K., will hear back from the FDA in June as to whether its epilepsy drug Epidiolex will become the first cannabidiol-based prescription drug to be approved for sale in the U.S. An FDA committee in early April unanimously recommended that the agency approve the medication, paving the way for approval next month. The Avetisyan brothers understand the concern about contaminants as well as the possibility of adverse effects due to interacting compounds. Sending products to a lab to be tested constitutes a large portion of their expenses, Greg Avetisyan said. Being any less vigilant could come at a significant cost to their reputation. As for the lack of benefits, the brothers say that many of those who try their products start out with the same attitude. “My response to people who are skeptical is that 80 percent of our customers are skeptical,” Gary Avetisyan said. “But once they try it, they see what all the fuss is about.” Regulatory matters Snake oil or not, the market for CBD products is poised to grow. Here in California, the number of companies specializing in CBD is likely to rise not only because of that demand, but also because it’s easier to get a bit of the state’s cannabis market without being subject to hefty regulations if one starts with CBD, Lance Rogers, managing partner of the cannabis law practice at Greenspoon Marder in San Diego explained. “The regulatory environment is much more onerous and complex for THC products,” Rogers said. “By and large, there’s a much lower barrier to entry to open a CBD store than a commercial cannabis business in California.” The Avetisyan brothers know this well. They were introduced to CBD while working at a marijuana business, which was much more expensive to run and appealed to a different kind of customer. “They’re completely different businesses,” Greg Avetisyan said. “The main focus with dispensaries and the THC products was the psychoactive effect. Over here, it’s all about the medicinal reasons.” Rogers likened the regulations surrounding opening a CBD store to those for a frozen yogurt shop – that is, the process is the same as for a standard business. Still, hemp-derived CBD is considered a Schedule I substance by the U.S. government, Rogers noted, which makes it illegal under federal law. A federal appeals court in early May upheld the Drug Enforcement Administration’s categorization of the compound after hemp farmers and others in the industry challenged the rule. “Business owners … may think that the risk is much lower than a marijuana dispensary because the (CBD) product is not supposed to contain THC,” Rogers said. “It’s still a Schedule I substance, regardless of whether it’s grown on a medical marijuana or hemp farm.” The Avetisyan brothers are aware of the possibility of regulatory problems, they said, but it’s one with which they are willing to cope. The majority of their customers are repeat customers, and their glowing reviews produce a robust stream of first-timers to the shop. “Any business I believe is a risk, but at this point we have helped so many people and so many people rely on us that I’m willing to take the risks,” Gary Avetisyan said. “If you saw the smiles on our customers faces, you would, too.”

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