Why Third-Party Certifications Matter in the Global Marketplace

The global hemp industry is rapidly growing, with increasing demand for hemp-derived products such as CBD oil, textiles, and food. However, as with any emerging industry, there are challenges to overcome in order to establish trust and transparency in the marketplace. This is where certification programs can play a crucial role in advancing the hemp industry.

Certification programs for agricultural crops have been around for decades, providing a way for farmers to establish trust with buyers and consumers by demonstrating adherence to certain standards and practices. These standards can include criteria such as sustainability, organic practices, fair labor practices, and product quality.

In the hemp industry, certification programs can help to establish trust and transparency by ensuring that products are produced in a sustainable and responsible manner. This can include criteria such as the use of natural and organic farming methods, proper testing for pesticides and contaminants, and responsible water and energy usage.

Certification programs can also help to address concerns around the variability of hemp products, particularly with regards to CBD oil. With so many CBD products on the market, it can be difficult for consumers to know which products are of high quality and contain the advertised amounts of CBD. Certification programs can help to establish standards for product quality and provide third-party testing and verification to ensure that products meet these standards.

As hemp moves from the local voice to the global markets, certification programs are a necessary step for the hemp industry to progress and establish trust and transparency in the marketplace. By demonstrating a commitment to sustainable and responsible practices, hemp producers can differentiate themselves in a crowded marketplace and provide consumers with the assurance that they are purchasing high-quality, responsibly produced products.

Third-party certifications play a crucial role in the global agricultural marketplace by ensuring quality, safety, and compliance with relevant standards and regulations. They also create pricing premiums for farmers and introduce new market opportunities. Farmers who commit to voluntary certification schemes, such as the Responsible Hemp Standard (RHS) or Control Union's CUMCS program for medical cannabis, can provide their customers with letters of attestation that attest to the independent verification of product quality. These certifications help to ensure that consumers, businesses, and governments can trust the products they purchase, meeting the demands for ESG, sustainability, greenhouse gas programs, and other consumer requirements.

From an objective standpoint, it's important to recognize that the decision to pursue third-party certifications for agricultural products like cannabis should ultimately be a personal one based on the specific needs and goals of each operation. While certifications can bring many benefits, including increased product quality, safety, and access to new markets and customers, they can also come with potential costs and limitations, such as time and financial investments, and may not be suitable for all operations.

Farmers and cultivators should carefully consider the benefits and costs of certification, along with all available options for improving their agricultural practices and outcomes. While certifications can signal to consumers, businesses, and governments about product quality and sustainability, they are not the only way to achieve these goals. Other options may include implementing internal quality control processes, working with trusted buyers, or pursuing alternative forms of verification.

Deciding to pursue third-party certifications is a crucial step for any operation, and it should be made after careful consideration of available options and the specific needs and goals of the operation. It's also important to recognize that certification is network-specific, meaning that the network of brands and retailers associated with the certifying body can have a significant impact on the potential contracts for the operation in the future. When selecting a certifying body, it's essential to trust the team that will showcase the operation's commitment to producing the most transparent cannabis in the global market.

Yes, voluntary certifications are network dependent, but your certification should be seen as a way to demonstrate your team's commitment to producing a fully transparent and sustainable cannabis supply onto the marketplace, not solely reliant upon the Certifying Body to bring in contracts and sales. However, there are members within the certifying body's network who value this commitment and may be interested in purchasing primary or secondary non-direct ingredients that involve the operation's certified cannabinoids, certified hemp fiber, or other related products. By aligning with a certifying body and becoming part of their network, the operation has the potential to access new markets and increase visibility. It's crucial to assess the certifying body's network and understand what their brands and retailers value to ensure alignment and success.

To communicate your commitment to producing high-quality cannabis or hemp products, you can leverage your certification as a signal of your company's values and standards. This can help increase consumer confidence and build your brand reputation while also providing access to new markets and business opportunities.

While there are currently limited globally recognized agricultural certification schemes solely focused on cannabis and hemp, to date Control Union's Medical Cannabis Standard (CUMCS) and their Responsible Hemp Standard (RHS) are the only globally recognized programs active in those markets, but there are new programs that are likely to emerge as the industry continues to grow. For example, ASTM's D37 program is currently developing roundtable sessions to address this need.

Certifications have historically helped smallholder farmers secure financing from banking institutions, particularly in volatile commodity markets. For example, the RSPO certification program in the high-risk palm industry provided pricing premiums and prevented deforestation. Although certifications may come with costs and time investment, they can signal a farm's commitment to best practices and quality, which can outweigh these barriers. Therefore, it's important for each farm to conduct a cost-benefit analysis to determine whether participation in a program like CUMCS is worthwhile.

For micro and small farms, certifications can help financially in several ways. Firstly, certifications can provide them with access to new markets and customers. For example, obtaining organic certification can open opportunities for selling products to consumers who prioritize purchasing organic goods, while food safety certifications can help farms sell to restaurants and other food service providers who require these certifications. Certifications can also help farms command higher prices for their products, which can help small and micro farms increase their revenue and profitability.

Voluntary certifications have historically helped small and micro farms by improving their operations and reduce costs by providing them with access to training and support. For example, organic certification programs often provide training and resources to help farmers implement sustainable farming practices, while food safety certifications may require farms to implement quality control systems and procedures that can help improve efficiency and reduce waste.

Despite the potential benefits of certifications, the industrial hemp industry in the United States has faced several significant hurdles since the passage of the 2018 Farm Bill, which legalized the cultivation and production of hemp. Some of the biggest challenges include the lack of clear regulations, banking and financial challenges, market saturation and low prices, confusion with marijuana, and quality control and product standards. These challenges are further compounded by the presence of unregulated product offerings, which add to the chaos and mistrust in the industry. In order to establish trust and credibility, it is important for cannabis and hemp to become certified by a trusted agricultural certifying body such as Control Union or the Responsible Hemp Standard. With such certifications, global brands, retailers, and customers can be assured of the quality and safety of the products they purchase. At FS Origins, we are committed to supporting farmers and cultivators in their pursuit of certifications that will help them improve their operations, access new markets, and achieve financial stability.

Historically, agricultural certification schemes have had a mixed impact on smallholder farms' ability to secure financing from banking institutions, especially in the context of unstable commodities. While certifications can serve as a signal of a farm's commitment to best practices and quality, they can also be expensive and time-consuming for smallholder farmers to obtain, which can create financial and operational barriers that limit their ability to access financing.

When looking to better serve the cannabis industry, it becomes clear that third-party certifications will play a critical role in the global marketplace by providing independent verification of product quality and safety. Such certifications can build consumer confidence and open up new business opportunities. For example, Control Union's Medical Cannabis Standard (CUMCS) has helped smallholder farmers by raising pricing premiums. Independent voluntary certifications like CUMCS can financially benefit the cannabis industry by providing cultivators and farmers with access to new markets and customers, improving their operations and reducing costs, and commanding higher prices for their products. These improvements are historically proven to be the most effective path for incumbent financial institutions and independent financiers to step in and support the cannabis industry. However, the general instability and uncertainty of commodity markets can limit smallholder farmers' ability to secure financing from banking institutions.

There is no denying that the industrial hemp industry faces significant challenges, but third-party certifications like CUMCS and RHS can provide a path forward for farmers looking to improve their operations, access new markets, and secure financing. At FS-Origins, we're committed to supporting the cannabis industry and promoting sustainability and social responsibility through our certification programs. We invite you to learn more about our offerings and take part in the Responsible Hemp Pledge, which signals your commitment to producing hemp under one of our certification standards. Contact us today to learn more about how we can work together to make a positive impact on the global cannabis industry.

Join the Movement: Take the Global Hemp & Cannabis Pledge for Responsible Sourcing and Transparent Supply Chains that will strengthen the global hemp fiber, hemp protein, and hemp cannabinoid markets!

Our programs empowers individuals and organizations with the knowledge and resources to succeed in the global hemp industry.

Thank you, Aaron Furman (Founder of FS-Origins and creator of RHS)