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A new report from the Centre of Environmental Law estimated that plastic pollution will contribute greenhouse gases equivalent to 850 million tons of carbon dioxide to the atmosphere this year alone. By 2050, it could emit as much as 14% of the earth’s remaining carbon budget. Yeah – plastic waste is a huge problem, and it’s no longer enough to recycle, reduce and reuse in 2019. 

As our hunger for convenience increases, we can’t realistically expect people to stop buying plastic altogether, right? Here’s where hemp comes in. 

Industrial hemp is being noticed as an ideal plastic alternative because of an organic compound called cellulose. Cellulose is the main substance found in plant cell walls which helps the plant to stay stiff and strong, and plastic, which is of course stiff, but malleable, relies on cellulose as the base of its makeup. But most plastic relies on cellulose from petroleum, a non-renewable energy source. Why? Essentially, it’s cheap and easy.

It’s totally possible to make plastic with other sources of cellulose – and hemp is, according to Cannopy Corporation, ‘the greatest cellulose producer on Earth.’ So, for Cannopy and other like-minded organizations, hemp presents a great opportunity as a sustainable source of plasticizing material. Thanks to its high cellulose content, hemp plastic can lend itself to virtually any shape and purpose – furniture parts, toys, packaging, and more. And of course, this is a super fast-growing renewable resource. Win win for us and the earth.

So why don’t we see more companies using hemp plastic? Basically, it would require a lot of new data, research and investment to be fully put to use in production and manufacturing industries. For example, Coca-Cola actually invested in hemp plastic bottles back in 2015 and apparently came to the realization that it would require too many changes in its production line. Obviously, Coke can invest major money into experimenting with production, but smaller businesses just can’t.

While hemp is ‘booming’ as an industry, we don’t necessarily have the adequate technology in place to meet a mass commercial demand for plastic. Hemp is still ‘niche,’ for all intents and purposes.

However, big names like Cannopy are working on creating hemp-based plastic solutions for any and all kinds of purposes, forward-thinking industries are noticing – carmakers like Ford, GM, Chrysler, Saturn, BMW, Honda and Mercedes are currently using hemp composite door panels and trunks, for example. These high-profile examples are a major step in the right direction – non-toxic, biodegradable plastic from hemp saves our dumps from a lot of refuse. The more we see hemp being used in mainstream products, the more accessible it can become.

Right now, a popular avenue for hemp-based plastic is for packaging materials – and plastic packaging is a major part of the world’s plastic problem, making up to 40% of plastic waste. A couple companies to keep your eye on – the Hemp Plastic Company, a Denver-based company which specializes in making hemp-plastic based packaging for any and all industries, and Sana Packaging, another Denver-based company which designs hemp-plastic, compliant packaging solutions for the cannabis industry. These up and comers are a reason to have hope that hemp plastic can find its way into the world.

We can talk about hemp plastic being the way of the future, but if you’ve heard of Henry Ford’s hemp car which was made back in the 40’s, you know that hemp plastic is by no means new. It’s always been a versatile, durable and valid a construction material. If you know, you know. Be one of the people who chooses to support hemp and lighten your carbon footprint. We’re here for you.

Possibly one of the fastest growing trends in the cannabis industry is the demand for quality and compliant packaging. If you were at the most recent MJBizCon in Las Vegas, you probably had a hard time not noticing the slew of booths catering to consumer-facing companies and their various packaging needs. It is a hot topic for good reason: direct branding has become a key part of serious strategy, ad restrictions persist nationwide, demand continues to grow steadily, and companies are trying to remain compliant over multiple borders.

With everyone competing to stay more clever and innovative than their competitors, we are seeing an emergence of sustainable cannabis packaging initiatives throughout the industry. More and more companies are beginning to focus efforts on reducing their impact on landfills, oceans, and parks. A large portion of cannabis consumers are progressive millennials who are dedicated to changing the way we use our limited resources. They want their cannabis products to reflect that lifestyle.

Going green has become a planned business strategy to attract this rising demographic. For some, the cost of transitioning their cannabis packaging to sustainable canisters and boxes invites new patrons who are willing to spend more money promoting a healthy planet. Reaching them is difficult, though. With persistent ad restrictions on television, radio, and print, it can be tough to pinpoint marketing to specific groups. One effective method is through the containers and boxes that consumers use daily. Gone are the days of Ziploc bags and old film containers. You need only visit your local dispensary to witness the glamor of cannabis packaging that lines every shelf in the current market.

Packaging says a lot about the brand it represents. It offers an opportunity to connect with consumers on a personal level and strengthen loyalty. In this burgeoning industry, there are little to no long-established, dominant brands. That leaves a lot of market share open for companies hungry to command a lead.

Some of these companies are turning toward alternatives to traditional and non-recyclable materials as a way to stand out. They’ve traded in their heavy plastics for eco-friendly counterparts such as bioplastics, recycled cardboard, and glass. With the passing of the 2018 Farm Bill, we may see a rise in the availability of biodegradable materials that help to break the demand for wasteful plastics.

Hemp is a major resource when it comes to creating cannabis packaging alternatives, as it has a rapid growth rate, high cellulose, and requires little water. After legislation changed, Hemp Business Journal doubled their 2022 prediction of bioplastic sales to $27 million, and that’s no coincidence. These fresh options are invited with open arms into an industry that was founded by grassroots activists and wholesome hippies set on utilizing these benefits.

To say that the industry can be wasteful is an understatement. Nutrients, energy, water, chemicals, and packaging materials all contribute to a heavy burden. Some of the issues can be tied directly to state laws. Regulations on cannabis packaging and marketing can be extremely strict. Historically, the focus has been centered around excessive labeling, avoidance of product contamination, and keeping children safe. It offers a degree of transparency, accountability, and protection, but gives little attention to what happens after the product is sold or where it ends up.

Most of the time, it becomes non-biodegradable waste. In some states, the laws have created a Russian doll effect. For instance, Washington requires each product be packaged and labeled individually – meaning a pound of joints could require over 1,000 “doob tubes.” Joints inside of doob tubes; tubes inside of boxes; boxes inside of exit bags. It’s a lot of wasted material and a stark reminder of the need for more sustainable packaging options. Fortunately, with positive legislation and the growth of environmentally friendly alternatives, the cannabis industry may be able to right its trajectory toward a more progressive and sustainable future.

Chances are high -- pardon the pun -- that marijuana will be one of the greatest growth stories of our generation. With worldwide legal weed sales more than tripling between 2014 and 2018 to $10.9 billion, the research team of Arcview Market Research and BDS Analytics foresees sales climbing to more than $40 billion by 2024. Looking out even further, some of the most aggressive Wall Street estimates portend that global sales could hit $200 billion annually in about a decade's time.

While the United States should be the top-selling marijuana market in the world, it's Canada that tends to garner a lot of attention from investors. That's because last year Canada became the first industrialized country in the world -- and only the second overall behind Uruguay -- to legalize recreational cannabis. Canada is, therefore, something of a legalization guinea pig for the rest of the industrialized world to watch and potentially follow.

Chief among the statistics that investors watch closest are Canada's monthly cannabis sales. 

Canada's marijuana sales in June hit a record high

Last week, Statistics Canada released its monthly data on retail sales for June, with the country logging its highest marijuana sales figures to date. Below you'll find the progression of cannabis store sales since October 2018, as announced by Statistics Canada (all data is reported in Canadian dollars, with U.S. dollar equivalency in parenthesis):

• October 2018: CA$53.68 million ($40.26 million)
• November 2018: CA$53.73 million ($40.3 million)
• December 2018: CA$57.34 million ($43.01 million)
• January 2019: CA$54.88 million ($41.16 million)
• February 2019: CA$51.66 million ($38.75 million)
• March 2019: CA$60.94 million ($45.71 million)
• April 2019: CA$74.58 million ($55.94 million)
• May 2019: CA$85.81 million ($64.36 million)
• June 2019: CA$91.13 million ($68.35 million)

Added up, licensed cannabis store revenue has tallied CA$583.75 million ($437.84 million) in the 8.5-month period since adult-use sales began in our neighbor to the north on Oct. 17. This should put Canada on track for perhaps CA$900 million (about $675 million) -- if not a tad bit higher -- in sales for its first full year.

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Supply issues are going to take a while to sort out

However, the roughly 6% sequential monthly sales growth in cannabis store sales in June doesn't tell the full story of the supply challenges Canada is currently contending with.

To begin with, Health Canada began the year with a monstrous backlog of cultivation, processing, and sales license applications for review. It often takes the regulatory agency many months, if not more than a year, to give the green light to a cultivation application, meaning it can take well over a year for a grow farm to become licensed to grow and sell cannabis. Some of the biggest growers in the world have been stymied by this licensing process, including Aphria (NYSE: APHA), which has been waiting for cultivation license approval for its Aphria Diamond facility for more than a year. Aphria Diamond will comprise 140,000 kilos of the company's 255,000 kilos of peak annual production.

If there is good news, it's that Health Canada has made changes to the application process to whittle away at its backlog. Growers now need to have their grow farms constructed and ready for inspection prior to submitting their cultivation license application. This should help remove underfunded growers from the equation and expedite the review process, but it's going to take Health Canada many quarters to work through its backlog.

In addition to supply issues created by licensing backlogs, Canada has been dealing with compliant packaging shortages. Health Canada laid out a laundry list of requirements that compliant packaging would need to follow in order to make it into licensed cannabis stores, and there simply hasn't been enough in the early going.

Making matters worse, despite some cannabis stocks having a substantive international presence, overseas sales have been virtually nonexistent because of these early stage supply and packaging issues. International sales are unlikely to pick up until demand in the Canadian market is being met, and that's probably not going to happen for many more quarters.

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Investor expectations for pot stocks were always too high

All of these early stage problems for the Canadian cannabis market circle back to the reality that next-big-thing investments need time to mature.

Over the past quarter of a century, we've seen incredible rallies regarding blockchain, 3D printing, genomics, and business-to-business e-commerce, to name a few hot trends. However, each and every one of these rallies eventually came to a crashing halt. This isn't to say that companies within these industries weren't eventually fantastic long-term buys. But it does demonstrate that investors have a history of unrealistic expectations when it comes to next-big-thing industries -- and cannabis is no different. I don't doubt that cannabis sales can ramp up substantially over the long run, but with no precedence to a legal industrialized country, there will be bumps in the road.

Because of their premiums, the most popular pot stocks are likely to be the most exposed to wild swings lower in valuation. That means shareholders of Aurora Cannabis (NYSE: ACB), Canopy Growth (NYSE: CGC), and Cronos Group (NASDAQ: CRON), which are three of the 11 most-held stocks on online investing app Robinhood, should be taming their near-term expectations.

In recent months, profit projections for all three companies have plunged. Aurora Cannabis, once expected to generate a modest profit of CA$0.10 per share (that's 10 Canadian cents) in fiscal 2020, is now forecast for a loss of CA$0.08 per share. Three months ago, Canopy Growth was forecast for CA$0.38 in full-year profit for fiscal 2021. Now Wall Street projects a loss of CA$0.73 per share. As for Cronos Group, its consensus estimate for 2020 has shrunk to a CA$0.01-per-share loss.

Even though Aurora Cannabis, Canopy Growth, and Cronos Group have all made intriguing acquisitions, pushed into foreign markets, and look to have the tools to succeed over the long run, supply and packaging issues have impacted all three pretty noticeably in the near term, and these headwinds aren't going to disappear overnight. Temper your expectations with cannabis stocks, and you won't be disappointed.

The average cannabis user living in states where marijuana is legal has the luxury of stepping inside his or her friendly neighborhood dispensary for access to a variety of pot products, like edible candies, pills, topicals, concentrates and even beverages. These processed variations of the cannabis plant are designed for those consumers who don’t necessarily want to smoke to achieve the desired effect. But when it comes to which method of consumption is best for patients suffering from chronic pain, a new study suggests that loading a bowl full of flower is still the most effective path to getting back to good.

Researchers at the University of New Mexico determined that people trying to manage pain through the use of cannabis are simply better off smoking bud than relying on other forms of the herb. The findings, which were published in the journal Complementary Therapies in Medicine, indicate that “whole cannabis flower was associated with greater pain relief than were other types of products.” The researchers go on to say that “higher tetrahydrocannabinol (THC) levels were the strongest predictors of analgesia and side effects prevalence across the five pain categories.”

These results are especially interesting considering that cannabidiol (CBD), the non-intoxicating compound of the cannabis plant, is now being praised as a rockstar at taming pain. Even the folks pushing the hemp-derived version of this medicine, which is much weaker than the oils made from marijuana, swear that this sometimes truck stop novelty is the key to living pain-free. However, researchers beg to differ. They have concluded that the presence of THC, which produces the stoned effects we all know and love, is also essential if the user expects any discernible pain-relief results.

“Cannabis flower with moderate to high levels of (THC) is an effective mid-level analgesic,” the study reads.

But it just isn’t the existence of THC that makes smoking marijuana the best approach to pain management.

We have swelled into a society convinced that dissecting cannabis and separating its components into good and evil is the right approach to the plant. This is perhaps the reason that CBD has risen to such stardom in the past five years. The problem with this attitude is that it completely disregards the 100 or so other cannabinoids that the cannabis plant has to offer. It also discounts essential terpenes and flavonoids and thereby eliminates any possibility that the patient will benefit from the plant’s synergistic properties. Science established long ago that the entourage effect associated with whole-plant cannabis is what truly provides the therapeutic effects. So, all of you military service members prohibited from using CBD products, don’t worry, you’re definitely not missing much.

But what about kids suffering from epilepsy? Dr. Sanjay Gupta told us years ago that they needed the CBD compound to stop seizures. Sure, while some sick children might have had some luck controlling this affliction through the use of CBD alone, a study published around this time last year found the compound was more effective at helping them stay seizure-free if it was complemented with just a hint of THC. Researchers found that the closer they got to allowing the two cannabinoids to work together, the better the results. “We saw a statistically significant reduction in motor seizures, and an increase in seizure-free days,” the study authors said.

Although the U.S. Food and Drug Administration (FDA) approved a CBD-based drug last year called Epidiolex to be prescribed to young patients suffering from two rare forms of epilepsy, not even it is expected to be a miracle cure. The drug, which contains absolutely no THC, is only effective in around 32% of patients, according to the FDA. Parents with epileptic kids have long complained that CBD alone just doesn’t do the trick and that the efficacy of this compound has been hyped beyond belief.

The latest study out of New Mexico, however, provides some guidance for an America looking for answers as to whether marijuana can relieve pain or not.

A separate study published earlier this week from the American Society of Anesthesiologists (ASA) shows that 75% of the U.S. population, most of them millennials, has a genuine interest in learning more about how pot can combat pain conditions. These folks, presumably those fed up with all of the anecdotal reports and the conflicting studies that emerge every other week, want to see the federal government finally roll up their sleeves on the cannabis issue and deliver real results.

Unfortunately, it seems that medical marijuana users are going to have to get high before they experience any noticeable pain relief. And that complicates things for a vast majority of the U.S. population — especially those in the workforce. Unlike over-the-counter pain remedies like acetaminophen and ibuprofen, which eliminate some of the hurt without a buzz, smoking marijuana to combat minor aches could lead to impairment issues on the job. Just like most companies don’t allow workers to drink booze on the clock, medical marijuana is not likely to be any different, even after federal legalization finally takes hold in the new few years. So, don’t sell your stock in Tylenol just yet.

Looking to add that special green ingredient to a home-cooked meal for friends? Perhaps your buddies are comfortable bud consumers, so no issues there. But what do you need to know about cooking with cannabis and what that means for taste?

The GrowthOp asked two Ontario chefs with a passion for cannabis cuisine for their best tips to make your next dinner party a smash: Jeff Kaminskas, a Toronto chef who has cooked with cannabis for decades and recently transitioned from food to craft vodka at Viritus Organics, and Reena Rampersad, a Hamilton, Ont.-based chef and owner of High Society Supper Club, a catering company that helps host upscale dinners and events for foodies who fancy a dash (or more) of cannabis in their cuisine.

Kaminskas and Rampersad wholeheartedly agree on a couple of critical points: There are multiple ways to work with cannabis flavours, and which ones yield the most delicious result is mostly up to the chef.

How does cannabis taste?

“It’s incredibly distinct,” says Kaminskas. “I’d say it’s got a nice sort of a spice, or provides a bittersweet additive, to whatever you want to cook with. It’s very much its own flavour,” he says.

“If you have your eyes closed, I’m sure that you could guess that it was likely a leafy vegetable, because I think you can taste a little bit of the chlorophyll. It’s a denser taste.” iStock / Getty Images Plus

“Cannabis is actually a very complex taste,” Rampersad suggests. “Once upon a time, people used to have single adjectives to describe it—but I guess, with us experiencing and exploring and discovering new strains—we’re finding that the taste is actually very full-bodied. I’d like to say that would be herb-y or dense,” she offers, but adds that “some strains taste very fruity, some taste very citrusy, some taste very piney.”

Both chefs agree the flavour is green. “You definitely know that you’re ingesting a plant, that’s for sure,” says Rampersad. “If you have your eyes closed, I’m sure that you could guess that it was likely a leafy vegetable, because I think you can taste a little bit of the chlorophyll. It’s a denser taste.”

Should the cannabis flavour be embraced or concealed?

Whether the flavour of cannabis is best as the star or relegated to a supporting role is a matter of personal taste. If cooking for guests who aren’t regular cannabis consumers, Kaminskas says the dish might go over better if the taste of cannabis doesn’t take centre stage. “A lot of the time, it’s better to try and cover it up because it is such a specific flavour,” he explains. If so, “you want to find other flavours that will contrast with or conceal it.” His recommendation? Playing with flavours such as chocolate, rosemary, garlic, or basil.

“You want to find other flavours that will contrast with or conceal it.” His recommendation? Playing with flavours such as chocolate, rosemary, garlic, or basil. iStock / Getty Images Plus

Kaminskas says experimentation is the best way to find a good culinary balance between the plant and the dish. “I really recommend trying different flavours that contrast or camouflage the taste.”

Rampersad offers a different approach, preferring to incorporate the flavour of the terpenes in the cultivar that she is working into her recipes. “If the terpene is humulene, for example, so it’s a little bit more woodsy, little bit more spicy. It resembles a nutmeg, cinnamon, spicy kind of thing all put together,” she says.

“Those [humulene-heavy cultivars] I find tend to go really nice with baked goods—if it’s a cookie or an earthier, flavoured type of batter, pancakes and things like that,” Rampersad says. There are also the piney and the fruity profiles, so “you also don’t want to hide the flavour.”

Are there natural food pairings?

For traditional pairings, such as fish, certain meats or even certain vegetable dishes “where you want a citrus punch, certainly that does apply as well,” says Rampersad.

But don’t just dump any cannabis in any recipe and expect it not to affect the dish’s taste; Rampersad recommends a bit of forethought and a bit of care to achieve a flavourful and complementary result.

“I find that when I do use a strain that has a lot of citrus tones, I will be able to detect that a bit in comparison to, say, a fish or any type of meat that gives a good contrast,” says Rampersad. However, if used in a dressing for a salad that has berries and peaches, those flavours might prevent the diner from picking out “the tones in that salad coming out of that strain.”

When making multiple infused courses or dishes, Rampersad likes to choose a flavour “theme” and stick with it to provide a coherent tasting experience. “I try not to put the same flavour profiles in the same meals with each other,” she says, adding she wouldn’t make a gingerbread cookie, which already has lots of ginger and spices in it, paired with a strain that has a lot of humulene. Or if the dish “had some floral tones in it, I might not use a strain that had linalool in it.”

Does it matter if you cook with cannabis oil, extract or flower?

The form of cannabis one cooks with is up to the chef, but Kaminskas advises against just throwing some dried flower into the recipe and calling it a day. Instead, he recommends trying infused oil or making canna-butter.

These butters “really go well into milk and fats,” says Kaminskas. “So, you could use that and, basically, combine the herb, if you will, into your fats.” The idea is not to dump “the actual flower itself directly into the dish. You just want all of the goodness contained therein.”

Kaminskas says that while infused oils may have a bit less of a taste, butters often put the cannabis flavour up front. “Once you actually combine the cannabis with the butter and you pressure cook that for hours and strain it out, by the end, you really get a lot of the actual flavour of the strain—so it’s really strain-dependent.”

And the more flavourful the cultivar, he says, the more it will affect the resulting butter. “When I cook, I like to use butter because they have so many different flavours across the spectrum. You could choose a really good strain that actually accents whatever else you’re cooking.”

A note on dosing: Optimal dosing of cannabis depends on both specific strains and the individual consuming them; questions should be directed to a healthcare professional. Any infused product should be handled with care, stored away from children and pets and clearly marked.

Rob Gronkowski discovered CBD while recovering from various injuries as a Super Bowl-winning tight end with the New England Patriots.

Super Bowl-winning tight end Rob Gronkowski is among the latest of football players to end their careers early, then turn around and endorse cannabis-based medicine. At 30 years old, Gronkowski, more commonly known by his nickname “Gronk,” the former New England Patriot will now become an advocate for players to use CBD as a pain management tool and anti-inflammatory.

While he said “physically, I could play right now,” Gronk added that he isn’t there mentally or emotionally to suit up again. Gronk said using CBD following his retirement from professional football in March has allowed him to be pain free for the first time in years.

“I’m advocating for CBD to be acceptable for all players for recovery,” he said. “You can just call me Mr. Recovery. You know you like that name. Mr. Recovery, baby.”

Gronkowski’s comment came at a formal press conference to announce his investment and partnership with Abacus Health, which sells a line of “all-natural, fitness-oriented recovery products.” On its website, the company promotes various CBD-infused products, including a pain stick, massage oils, and ointments. CBD, and cannabis as a whole, is said to assist in football players recovery, reducing inflammation and pain. In addition, there is also growing evidence that CBD can assist the healing process of suffering traumatic brain.

However, Gronkowski is not alone in his investment in cannabis-based medicine for athletes. Joe Montana, Calvin Johnson, Ricky Williams, and Tiki Barber have all entered the cannabis space in ways, big and small. The NFL announced earlier this year it will study cannabis-based medicine as a pain management toll for athletes, and will consider changing its polices based on the research’s results.

Gronk’s announcement also highlights a growing trend of athletes retiring before their playing days ended from a physical perspective. Indianapolis Colts quarterback Andrew Luck stunned the sports world earlier this week, when he announced he was prematurely retiring from the NFL. Gronk explained why he was not returning to the NFL during his press conference.

“I want to be clear to my fans. I needed to recover. I was not in a good place. Football was bringing me down, and I didn’t like it. I was losing that joy in life,” he said.

For years, friends and family and angel investors were the primary funding sources for cannabis ventures, as only those closest to the industry were willing to take the risks that came with investing in a sector that, while increasingly legal at the state level, was (and is) still illegal federally in the United States. While those early investors continue to be important, we’re starting to see more institutional investors make moves into cannabis. Many of them are investing because of the way the industry is evolving. As cannabis becomes a fundamental ingredient, in products from drinks to beauty creams, investors will have more predictable ways to evaluate and invest in cannabis companies.

Following A Familiar Growth Path

While cannabis might be unusual in its legal status, the investment path it is following is well-trodden. Consider other sectors – personal computers immediately come to mind – where a small core of advocates and visionaries toiled away in relative obscurity before a sudden awakening of the market. Where once only angel investors participated – early backers of Apple and Microsoft MSFT 1.54%, after all, were family and friends – venture capitalists followed. Then came private equity investors before companies emerged onto the capital markets as public, well-funded vehicles with broad investor bases.

And like technology, cannabis will soon be the backbone for many different kinds of companies. Technology has powered new growth in industries such as hospitality, health care, and retail. Cannabis is on a similar path. As it begins to spread into new segments, it will fuel new opportunities for investors.

Cannabis Market Segmentation Means Opportunity

As cannabis finds its footing, it’s becoming more clear there is no one “cannabis industry.” In reality, cannabis is a foundational ingredient that is beginning to play a huge role in a number of traditional sectors, such as consumer staples (cosmetic, food, beverage), health care (biotech and pharmaceutical), consumer discretionary (retail) and real estate (REITs). This evolution will give institutional and individual investors ways to put money into cannabis through markets where they feel more comfortable. In fact, many of these investors probably won’t be core cannabis proselytizers, but instead, smart financiers who know an industry game-changer when they see it.

The market awakening for cannabis started in 2012 when Colorado and Washington state both legalized adult-use cannabis. The recognition of the sector’s transformational potential created an environment where small-dollar, high-risk investing thrived. Venture capital investors, better funded than angels and still willing to take high-risk bets for big potential payoffs, saw the gathering momentum for normalizing cannabis nationwide. Between 2008 and 2018, VCs made $2 billion in investments into cannabis companies, according to data in the MGO & ELLO Cannabis Private Investment Review, powered by PitchBook Data. The multi-billion-dollar stock market valuations of Canopy Growth, Tilray and others show the VC strategy of making many early investments to find a few large winners paid off.

This year, we’re seeing a shift from early-stage VC investors to later stage VC who prefer making larger investments in companies further along in their development. This is another mile marker on cannabis’ growth road. This year is the first when late-stage investment rounds are outpacing early-stage rounds. About $660 million in late-stage funding was completed through mid-May in just nine companies, including a $420 million round in the first cannabis unicorn Pax Labs, a maker of vaporizing equipment for the adult-use market. By contrast, there were 33 early-stage financings totaling $530 million in the same period. The first five months of 2019 saw inflows of $1.3 billion from private investors, putting cannabis well on its way to eclipsing total prior investment in just one year.

Private Equity Dollars To Come Next

Private equity is the next stage of investors seeking opportunities in cannabis. Often better capitalized than venture capital firms, increasing interest from private equity (PE) investors is a sign the perceived risk factor is declining in cannabis. Generally speaking, PE investors are bankers and financiers running large investment funds. The most successful PE funds are focused on just one sector or even a subsector where they can apply their deep knowledge for outsized investment returns. PE investors, like many VC investors, maybe less well-versed in the dynamics of cannabis, but have the expertise to see how cannabis can create value in a market segment. Many times, PE investors apply more in-depth strategies beyond top-line growth prospects when evaluating their investments. For example, they may carefully track the consolidation process growth industries like cannabis tends to go through. Or they may wait for the type of business results institutional investors, such as mutual funds, will want to see before making a play.

There’s little doubt cannabis remains in a legal and market gray area today, given its federal status. The surge in private investment in cannabis this year already shows that professional investors expect the road to lead to total legality. In the meantime, as cannabis becomes an increasingly viable ingredient in applications ranging from pharmaceutical pain treatment to adult beverages, the investment path is evolving like many industries that came before – and more cautious investors are showing a willingness to enter the space. As these “training wheels” fall off, a groundswell of investor capital will lift cannabis into the next phase of industry growth.

One of the main roadblocks to the growth of the global cannabis trade is the fear of prosecution hanging over banks, claims a new report.

The Cannabis Legal Report published by London-based Prohibition Partners, finds that medical cannabis now legal in 43 countries with an ever-increasing number of countries also allowing access to CBD products 

It says this  ‘significant’ shift in attitudes to cannabis has been driven by ‘a kaleidoscope of forces including widespread political upheaval, technological innovation and new societal norms’.

The report analyzes the current global status of cannabis legal and regulatory regimes with its major finding being the inability of banks to do business, particularly trade, with cannabis firms, without fear of prosecution. With cannabis federally outlawed multi-nationals are reluctant to enter the U.S. market, as they cannot carry out cross-state trade, it says. 

“Federally insured banks are forbidden from dealing with cannabis businesses, leading to problems all over the world where firms rely on either U.S. capital, allow U.S. dollars as a currency, or use the services of a lender based in the U.S.,” It says. 

The report highlights how a smooth passage into law for the SAFE Banking Act could open the global markets to the larger U.S. players. It says global regulation is failing to keep pace with legalization, and ‘international agreements are needed to give clarity to businesses and patients’. 

Daragh Anglim, Prohibition Partners‘ Managing Director, said: “Regulatory shifts and advances came thick and fast over the last 12 months, such as Thailand’s reform of previously conservative cannabis policies, Canada’s legalisation of adult-use cannabis and the UK’s implementation of a medical cannabis programme. 

“We feel that international regulatory bodies and institutions need to keep pace with global legislative change to offer the clarity that businesses and patients need.” Highlighting how a regulated environment can help business progress it cites Canada as the most active global merger and acquisition player with Canadian firms buying up ‘local’ producers.

It says: “The support and experience gleaned from working in a fully regulated adult market have enabled Canadian firms to penetrate strategically important foreign jurisdictions such as Germany, the largest European Union state.” 

It highlights how Germany’s medicinal market alone promises to be larger than Canada’s medicinal and recreational markets combined, ‘making it an essential outpost for ambitious firms’. 

The report also singles out countries such as the such as the Philippines and Thailand, with strict anti-drug laws, who are launching or advancing medicinal cannabis programmes, while liberal Western jurisdictions are inching toward adult recreational markets. It adds.