Expanding CBD applications: Layn’s US$60 million processing investment suggests further mainstreaming

11 Jun 2019 --- A new line of cannabidiol (CBD) ingredients by Guilin Layn Natural Ingredients Corp. (“Layn”), a global producer best known for its plant-based sweeteners, debuted at last week’s IFT19 Food Expo in New Orleans, US (June 3 to 5). The company has invested an estimated US$60 million in a new US-based CBD manufacturing facility, expected to be completed in autumn of 2020. The facility is expected to have the capacity to process a minimum benchmark of 5,000 tons of hemp biomass per year, which will yield 160 tons of high purity CBD and 290 tons of full spectrum oil annually. Layn is currently in the process of completing the filing procedures to receive approval for this project.

The industry has been keeping a close eye on the regulatory developments around the compound that shows no sign of slowing down. Most recently, the US Food and Drug Administration (FDA) held a public hearing on May 31 on products containing cannabis or cannabis-derived compounds, in an attempt to create “legal pathways” for the compounds use in food and beverage applications. However, the hearing left a lot of unanswered questions and industry is still pushing for legal clarity. Despite the legal gray area, the entrance of an ingredient supplier such as Layn into the arena suggests a true mainstreaming. 

Click to Enlarge A new line of cannabidiol (CBD) ingredients by Layn debuted at last week’s IFT19 Food Expo in New Orleans, US (June 3 to 5).“We chose to invest in the CBD industry because it is a trending hot topic,” Elaine Yu, CEO of Layn, tells FoodIngredientsFirst on the floor of IFT19 (in photo). “Even though this market seems crowded, not very many of these players come from this industry – many are ‘outsiders’ like farmers or extraction equipment manufacturers. From Layn’s perspective as an ingredients manufacturer, we are utilizing our 20+ years of experience and expertise in extraction, agriculture management, sustainable supply chains and understanding food safety requirements.” 

Layn will make its CBD ingredients available in a number of forms, including full-spectrum oil, broad spectrum oil, CBD distillate and crystallized isolate, offering the purest CBD.

Yu highlights the emergent potential of CBD in food and beverage formats, where historically, companies have been more inclined towards pills, tinctures or topical delivery formats. At IFT19, Layn showcased two beverage concepts: a cucumber-flavored anti-inflammation drink infused with CBD (roughly 21mg per 200mg serving) and Gotu kola, using stevia and monk fruit as zero-calorie sweeteners; and a fruit-flavored anxiety-relief drink infused with CBD and Rhodiola extract.

“In the nutraceuticals segment, CBD is commonly used in tinctures, oils and creams – it has been more about topical use and not too much about taste. We want to demonstrate that CBD can be used in a wider range of applications. What were are showcasing here is CBD as the main ingredient – integrating it with our other portfolio, which encompasses plant-based sweeteners and natural ingredients for different functions. We are currently working on solutions regarding the water solubility of our oil products, as well as taste challenges,” says Yu.

As an increasing number of consumers incorporate CBD into their daily wellness regimes, an analysis of buyers’ preferences by cannabis industry specialist High Yield Insights reveals that in addition to vapes, oils and topics, the most common delivery methods of CBD are “edibles” such as baked goods and gummies.

Layn has partnered with farmers that have been growing hemp since the US Congress legalized low-THC (the psychoactive component in cannabis) hemp, under the Farm Bill, which was passed in December 2018. Once hemp was legalized, many small industry players jumped at the chance to use CBD derived from hemp in value-added wellness products and industry saw the launch of an array of CBD-infused offerings, such as wines, waters, edibles and topicals.

“Our world-class R&D team has developed advanced botanical extraction technology that we are now applying to hemp farming and CBD extraction,” says Frank Xie, Board Director of Layn. “We have also taken great care in building a sustainable supply chain for the ingredients we offer and are committed to carrying this expertise into our CBD line.”

But even with consumer interest in CBD booming, and the loosening of corresponding regulatory restrictions, certain challenges in the nascent market have been made apparent in recent months. According to a recent Rabobank report, imbalances in the supply chain of hemp in the US could potentially lead to a future market “crash,” and the existing legal ambiguities are a significant hurdle to the proliferation of related products. Moreover, the emergence of synthetic CBD – marketed as a “safer, low-cost and non-toxic” alternative to naturally sourced CBD – may itself challenge the integrity of the extract.

Synthetic CBD also received a boost in its medical standing. A study published earlier last month, conducted by chemists at the University of California, Davis, US, in collaboration with researchers at the University of Reading, UK, found that a synthetic, non-intoxicating cannabidiol (CBD) alternative, 8,9-Dihydrocannabidiol (H2CBD) was found to be as effective in treating the frequency and severity of seizures in rats, pointing towards a potential therapeutic application for humans.

According to their report, the synthetic CBD alternative is easier to purify than a plant extract, eliminating the need to use agricultural land for hemp cultivation (making it cheaper), and can avoid legal implications surrounding cannabis-related products. Their work was recently published in the journal Scientific Reports.

With these existing challenges to the CBD industry, whether the cannabis extract has proven its worth as a consumer staple has yet to be seen. Layn has partnered with specialists in the food and beverage, health and nutrition, pharmaceutical, cosmetic, personal care and animal nutrition companies in over 60 global territories. The company announces that it will be continuing to work with many of these manufacturers to develop new applications for industrial hemp and the development of new hemp-based businesses.

By Benjamin Ferrer

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