CBD retail sector takes flight with at least 30 stores in the Chattanooga area

Chattanoogan Kelly Brock recalls starting a company in 2017 with sister-in-law Betsy Scanlan and David Nicholson with seed capital ranging from $1 million to $2 million.

Brock says The Good Patch company grew 100 percent annually from 2019 to 2021 and also completed its “A” round of investments last year. She says Good Patch products — topical patches infused with plant-based and CBD (cannabidiol)-based ingredients — are now available at Ulta, Target and, as of last month, at more than 4,000 CVS stores nationwide.

“We started shipping products from my tiny little basement,” says Scanlan. “Now we have a team in California, a large warehouse in Jasper, Georgia, and 25 to 30 employees.

“The three of us were talking the other day and we said, ‘Can you believe that?’ It’s a dream,” she adds.

Perhaps a dream for the company’s founders, but no surprise to Dr. Frank Butler, Frank W. McDonald/UC Foundation Professor of Management at the University of Tennessee at Chattanooga.

“In 2014, nationwide sales of CBD products were $108 million,” Butler says, citing figures published in Hemp Business Journal. “In 2021, sales of CBD products were $1.6 billion.

“This is growth in the technology sector,” he adds. “Incredible, amazing growth.”

This growth was fueled in large part by the federal agriculture bill signed into law by then-President Donald Trump in December 2018. The bill shifted governance of the hemp industry and CBD to the federal Food and Drug Administration (FDA). Before the Farm Bill became law, CBD fell under the federal Controlled Substances Act and the jurisdiction of the Drug Enforcement Agency.

A Google search for CBD retailers in the Chattanooga area returned more than 30 locations. Grass Roots Health, which opened in 2017, is credited with being the first CBD retailer in Chattanooga.

According to WebMD.com, CBD and THC (tetrahydrocannabinol) are found in both marijuana and hemp. Marijuana contains a much higher concentration of THC, giving users of this drug a “high”. Conversely, hemp contains much more CBD. While the FDA has only approved a single drug containing CBD oil to date — Epidiolex for epilepsy — proponents say CBD is effective in treating a variety of conditions.

Holly Hackler counts herself among these advocates. A paramedic by training, she now owns and operates Scenic City Hemp Co. in Copperhill, Tennessee and Ocoee Botanicals near Cleveland, Tennessee. Both stores carry CBD products, among other things.

“A lot of problems we have with our bodies start with inflammation, and CBD is a natural anti-inflammatory,” she says. “I struggled with back problems and my sleeping rhythm for a long time. I ate so much Advil and it ripped my stomach.

Photography by Sunny Montgomery / Holly Hackler works at Ocoee Botanicals near Cleveland, Tennessee.

“I’ve always been a cannabis supporter, so if the Farm Bill [became law]I gave [CBD] it a whirl. It was a game changer for me,” she adds.

Hackler says their business is just as healthy. Despite the global pandemic, Scenic City Hemp grew 40 percent from year one to year two.

“For the first six months, we got out and marketed to rafting outposts and were pretty busy from the start,” she says. “Then the pandemic happened; I thought, ‘What have I done?’ but we picked up the parking lot and got through.

“Most companies lose money in the first five years, but we’re paying our bills and we’re on track to bounce back this year. Things are looking good so far,” says Hackler.

The same appears to be true of the CBD-related industry as a whole, as Business News Daily forecast in April that sales in this sector are likely to hit $20 billion in 2024. “The wave,” then fizzles out, but “that feels.” not like that.”

“It feels like it’s going to be long-term,” he says. “People see value in that, there’s a lot of different beliefs about what [CBD] can, and right now it’s just a pure growth industry, without much [regulatory] separation of powers.”

Butler believes that as research into CBD-related products increases, increased state and federal regulation will result. John Kerns, co-founder and CEO of Chattanooga-based New Bloom Labs, says the industry’s future “depends on sound public policy” in this regard.

“We can’t ignore the role, the importance, of federal leadership here,” says Kerns, whose company provides chemical analysis of cannabis and cannabis-derived products for quality control and regulatory compliance purposes.

Kerns adds that the potential of the broader hemp industry is far from being realised.

“We are starting to see some price stability in cannabinoids [such as CBD]”, he says. “This specific part of the hemp market is starting to expand itself, but the overall promise of what a large-scale domestic hemp program might look like? We haven’t even begun to realize what that might look like.

“Whether demand for textile applications or building material applications – it’s all still in the development phase,” says Kerns. “We are just beginning an industry-wide research and development [research and development] Process.”


* The owner of Grass Roots Health touts her own experience of successfully tackling chronic pain with CBD products

* Putting down roots: Hemp farmers say the business is growing again after a rocky period