NEW ORLEANS — At first glance, the idea of Layn Corp — best known for its plant-based high-intensity sweeteners — entering the CBD market is somewhat baffling.
But to Elaine Yu, the China-based company's U.S. president, the move makes perfect sense. The company's expertise is in culturing tissues for plants such as stevia and monkfruit, contracting with farmers to grow the plants, then processing the finished products into extracts for use in food, drinks, cosmetics and supplements.
"If you see what we have been doing, hemp fits in our core competency very well," Yu told Food Dive at the Institute of Food Technologists conference this week where the company announced its next ingredient line. "This is our expertise for 20-plus years. Now we just need to apply that experience and expertise into hemp production, which we see is greatly needed in this industry."
Layn is making a major commitment to CBD with a $60 million investment into the market. The company will be building a processing factory for the ingredient — the company's fourth factory overall, and its first in the United States.
The company is in the final stages of negotiating a site for the factory, which Yu said will likely be in the midwestern United States. Layn will be able to process at least 5,000 tons of hemp biomass in a year, which the company says will produce 160 tons of high-purity CBD and 290 tons of full-spectrum oil a year. Layn already has contracts with two hemp growers for an initial supply, Yu said. The factory should be in operation next fall.
While the CBD industry is still new — and largely unregulated — the players getting into the market have varied experience. Many are farmers with expertise limited to growing.
Layn is unique in that it can take the product from seed to shelf, Yu said. It also knows the process to extract a botanical substance to get its maximum potency, and how to work with food and beverage applications. Yu said they have worked to get around the challenges plants such as stevia present. This knowhow can help with turning CBD into extracts that can be successful in food and drink.
Although CBD is on the radar of many companies in the food and beverage industry, Yu noted the IFT show floor — where companies showcase their newest ingredients, processing technology, packaging and traceability solutions — had relatively few companies dealing with cannabis.
"We come from the food industry," Yu said. "You know there are so many players, but you don't see them so much at IFT because we are coming from the food area. We understand ... what is the food safety requirement. How to deal with a customer audit, an FDA audit, in terms of your quality and manufacturing standard to the market it demands. ... We have the expertise and the knowledge, and we can provide the customer with a high-quality sustainable food ingredient."
Yu said interest in the company's new line of business at IFT was overwhelming. They had brought a substantial amount of literature on hemp and CBD that was all given out on the first day of the three-day show. At Layn's booth, they gave out samples of a sweet CBD beverage made from many of their ingredients to demonstrate what they could do. The shotglass-sized samples were quickly snatched up by attendees, barely spending any time on the counter of the booth.
Although CBD is currently in the beginning stages of FDA regulation, Yu said there is already a market for the ingredient, and Layn wants to be involved as a supplier. However, given the need for the U.S. Food and Drug Administration to determine regulations — coupled with the time it will take to build the CBD factory and get it operational — Yu said now is a good moment to enter the market in preparation for the future.
"In this 18 months right now, we are doing more research," she said. "Working with customers, help them to get ready for when that final approval is happening. Then, they have a product to launch, ready to go."