Latest

U.S. Cannabis Industry Market Projections Up 20% to $30 Billion by 2025

New Frontier Data, the global authority in data, analytics and business intelligence for the cannabis industry, in partnership with Global Cannabinoids, a leading producer, manufacturer and distributor of American-Grown Hemp-Derived Cannabinoids in the U.S., releases The U.S. Cannabis Report 2019 Industry Outlook. The report examines U.S. cannabis industry forecasts and trends, including industry revenue projections, illicit market sizing, cannabis consumer behavior, and potential interaction with the opioids market in the U.S.

Key findings include:

  • Total legal sales of cannabis in current legal states are projected to grow at a compound annual growth rate (CAGR) of 14% over the next six years, to reach nearly $30 billion by 2025
  • Annual sales of medical cannabis are projected to grow at a 17% CAGR through 2025, to an estimated $13.1 billion by 2025; adult-use sales are projected to grow at a 16% CAGR, to $16.6 billion
  • An estimated 38.4 million U.S. adults consume cannabis at least once annually, from either a legal or illicit source
  • 36% of cannabis consumers report using cannabis daily, and 59% use cannabis at least once a week
  • People between the ages of 25 and 44 comprise 45% of cannabis consumers

“We tend to be cautious, if not conservative in our projections, adhering to very rigorous data sourcing and data modeling protocols, so it is significant that we raised our 2025 forecast in U.S. legal sales to $30 billion. Foreign investment into the U.S. cannabis industry remains strong and domestic consumption continues to rise, especially as new states legalize. That said, it is critical for stakeholders to understand how regulatory uncertainty, lack of accepted standards, and international market pressures may have a material and lasting economic impact in the currently flourishing U.S. cannabis market,” said New Frontier Data Founder and CEO Giadha Aguirre de Carcer. “Whether an operator, researcher, or investor, I would encourage those interested in expanding their understanding of the domestic cannabis market, to also look at New Frontier Data’s Canadian and Global reports, as market dynamics, trends and driving forces are beginning to cross borders.”

Visit https://newfrontierdata.com/UScannabis2019 to download the report.

About New Frontier Data:

New Frontier Data is an independent, technology-driven analytics company specializing in the cannabis industry. It offers vetted data, actionable business intelligence and risk management solutions for investors, operators, researchers and policymakers. New Frontier Data’s reports and data have been cited in over 80 countries around the world to inform industry leaders. Founded in 2014, New Frontier Data is headquartered in Washington, D.C. with additional offices in Denver, CO, and London, U.K.

New Frontier Data does not take a position on the merits of cannabis legalization. Rather, its mission and mandate are to inform cannabis-related policy and business decisions through rigorous, issue-neutral and comprehensive analysis of the legal cannabis industry worldwide. For more information about New Frontier Data, please visit: https://www.NewFrontierData.com.

Colombia’s Congress to debate decriminalization of marijuana

Colombia’s leftist opposition sponsored a bill to regulate marijuana as part of a package of legislation proposals that seeks to end the war on drugs.

The marijuana bill of opposition Senator Gustavo Bolivar would end the repressive drug policy of President Ivan Duque, who can only count on a minority in Congress.

Bolivar is one of twelve lawmakers of the opposition and the center right voting block who have been working on multiple initiatives that would end the so-called war on drugs, and seek effective solutions to drug trafficking and drug abuse.

Gustavo stressed that his bill is about “regularization, not legalization” of marijuana and seeks to impose restrictions on the selling and buying of the drug similar to those applied to alcohol and cigarettes.

The bill is “based on evidence and on what is happening in today’s world, in Uruguay, in Canada and in the states of the United States where consumption is already regulated. It has been proven that crime levels are lowered and public health is improved,” Bolivar was quoted as saying by El Espectador newspaper.

What the opposition senator proposed is that the commercial production and selling of weed can only be done by licensed growers and shops. Selling the drug on the street would remain illegal.

Growing marijuana for personal consumption would remain legal.

According to the bill, half of the tax revenue derived from the legal marijuana business will be invested in prevention of drug use, a quarter for a program that would allow farmers to legally grow marijuana instead of illegally grow coca, the base ingredient for cocaine, and the remaining quarter would go to the government body in charge of imposing the regulation.

Like with cigarettes and alcohol, legal marijuana may only be sold to adults. Unlike cigarettes and alcohol, marijuana may not be promoted in any way, according to the bill,

Whether the bill will make it through congress or not is uncertain. Duque’s far-right coalition may be in the minority, but that doesn’t guarantee the approval of the remaining senators.

Marijuana labs adding tests targeting Vitamin E acetate in response to vaping health scare

Cannabis testing labs around the country are adding more specific tests targeting an additive that’s been linked to the string of recent illnesses and deaths health authorities say are related to marijuana and tobacco vaping devices.

Although no definitive cause of the vaping-related issues has been identified, early reports have targeted the additive vitamin E acetate as a possible culprit, and several cannabis testing labs are working to develop methods to flag it if detected.

Cannabis laboratory officials also said the crisis surrounding vaping has underscored the need for industry-wide testing standards.

At Redmond, Washington-based cannabis testing facility Confidence Analytics, Laboratory Director Shannon Stevens said her company is developing a method to test for vitamin E acetate in the wake of reports that more than 450 people had become ill and that some were dying.

“We started working on this pretty much immediately,” she said.

Once her company finishes its work, clients who pay extra to check for additional compounds such as terpene content and pesticide levels will have the vitamin E test rolled into their service.

Edward Sawicki, CEO of Irvine, California-based Think20 Labs, said adding the vitamin E test won’t have an impact on his company’s bottom line.

“It’s not that hard of a test to run, and it’s not that expensive,” he added.

“We’ll probably eat the cost because we want to make sure the product is safe.”

Too Early To Tell

The exact cause of what’s making people sick is not yet known.

What is known is that vitamin E acetate transforms from an oil to a vapor when it reaches a high temperature. When the substance reaches the lungs through a vaping device, it then reverts to an oil state that could sicken the user.

“But it doesn’t hurt to double-check any of the ingredients,” said Ian Barringer, founder of Boulder, Colorado-based Rm3 Labs.

Barringer’s lab is developing a high-performance liquid chromatography (HPLC) method for detecting and quantifying vitamin E acetate.

He said it will take weeks to develop the test..

At Keystone State Testing, a Harrisburg, Pennsylvania-based cannabis testing company, Kelly Greenland, owner and chief science officer, said consumers should remain assured that products tested in her lab are safe.

But she said she can’t speak for other labs in the industry “because there are no real standards and no oversight.”

Keystone State Testing also will be adding the vitamin E acetate test, said Greenland.

The company also tests medical marijuana in North Dakota as Dakota State Testing.

“There needs to be a significant amount of studies because it’s so new,” Greenland said.

According to Greenland, marijuana manufacturers in Pennsylvania were notified by the state health department that vitamin E acetate has never been permitted in licensed cannabis products.

The recent rash of pulmonary illnesses tied to electronic vaping devices has reportedly caused six deaths and sickened more than 450 people in 33 states, with both e-cigarettes as well as illegal and legal marijuana vaping devices targeted as possible causes.

Here are steps being taken by the federal government and warnings sent out to consumers:

Testing Deficiencies

Cannabis testing labs don’t typically test how marijuana oil and the compounds that are added to it change after it’s vaporized.

According to Greenland, no state with a legal marijuana program requires labs to test the byproducts of vaping.

Vitamin E acetate, for example, is common in lotions and balms and as a nutritional supplement. But the effect on humans once it’s vaporized is unknown.

“Our lungs have never been designed to contact food-type oils,” said Stevens in Washington state.

She added that testing the product once it has been vaporized is a “complex proposition.”

Sawicki, who operates a lab in Maryland as well as the one in California, also said he’s not aware of any state that requires the product to be analyzed once it has been vaporized.

“It’s just not required now, and I think it’s something that needs to be done,” he said.

Call For Standards

The broader implications of the fallout from the vaping health scare are prompting some to comment on the lack of industrywide standards.

Each state requires labs to test for similar contaminants such as microbials or mycotoxins, but no unified standards govern the entire U.S. industry.

One reason: With cannabis still illegal at the federal level, a government agency such as the Food and Drug Administration can’t oversee how the products are produced and tested.

Barringer pointed out that while Colorado regulators conduct proficiency testing to ensure that all labs are reporting results consistent to one another, the state needs better regulations to ensure manufacturers can demonstrate the products are safe.

“We really need to get the (federal) prohibition ended so we can get these products regulated,” he said.

Stevens characterized the standardization of product testing in Washington state as “generally poor.”

“It’s not rigorous enough,” she said. “It’s been a bit of the Wild West on the vape market, both in the legal and illegal market.”

Russell Krupnitsky, chief operating officer of Keystone State Testing, said the average consumer isn’t thinking about approved, legal marijuana versus black-market cannabis.

He suggests that regulators operate a quality-assurance program where labs test products that are randomly pulled from cannabis retailers’ shelves.

But he cautioned against anyone jumping to conclusions.

“The most prudent thing for the industry to do will be to take a collective breath and wait for the Centers for Disease Control and Prevention to release its findings,” he said.

His colleague and wife, Greenland, would like to see action taken soon rather than later.

“I’m hoping this is an opportunity for regulators to step up their oversight before someone in Pennsylvania is reported sick or worse.”

California pledges $20 million to public awareness campaign against vaping

California will spend $20 million on a public awareness campaign about the dangers of vaping nicotine and cannabis products and step up efforts to halt the sale of illicit products amid a rise in vaping-related illnesses.

Democratic Gov. Gavin Newsom announced the actions Monday as part of an executive order.

Many of the hundreds of nationwide vaping illnesses appear linked to use of cannabis-based oils, though some people reported vaping nicotine products, according to the Centers for Disease Control and Prevention. California has seen at least 63 cases and one of the six deaths reported around the country.

At the same time, flavored e-cigarettes made by companies such as Juul Labs are contributing to a rise in youth smoking. The public awareness campaign Newsom announced aims to tackle all forms of vaping, he said.

“As a father of four, this has been an issue that has been brought to the forefront of my consciousness,” he said.

While President Donald Trump and New York Gov. Andrew Cuomo have announced plans to ban the sale of flavored e-cigarettes, Newsom said he doesn’t have similar executive authority. But he said he wants lawmakers to send him legislation to do so next year.

A similar effort failed this year, but the lawmakers behind it said they’ll try again.

“We fully support the Governor’s belief that these products should be banned, and we look forward to working with him to pass legislation that will bring an end to this public health crisis and protect the youth in our state,” Sen. Jerry Hill and Assemblymen Jim Wood and Kevin McCarty, all Democrats, said in a statement.

Hours after the governor’s announcement, health officials in central California said a resident of Tulare County died of “severe pulmonary injury” connected to the use of e-cigarettes. The person’s name and age weren’t released.

Most of Newsom’s actions center on the use of e-cigarettes, though he said the state is stepping up its enforcement of illicit cannabis products as well.

A spokesman for Juul Labs, one of the most prominent e-cigarette companies, said the company is reviewing Newsom’s announcement and applauds action to crack down on counterfeit and knockoff vaping products.

“On reported illnesses, we have been monitoring the situation closely,” spokesman Ted Kwong said in an emailed statement. Juul products do not contain THC or any compound derived from cannabis, he said.

Beyond the public awareness campaign, Newsom has directed the state departments of public health and tax and fee administration to explore ways to warn people about the potential dangers of vaping and tackle the sale of illicit products.

He’s asked the public health department to explore new warning signs at retailers and in advertisements.

On the tax side, he’s asking officials to consider changing how e-cigarettes are taxed, because they typically face lower taxes than traditional cigarettes. Making the products more expensive to buy could make them harder for teenagers to purchase, he argued. Juul did not specifically comment on that aspect of Newsom’s proposal or his call for a ban on flavored e-cigarettes.

The California Department of Tax and Fee Administration may also try to implement a tracking system on the distribution of nicotine-based vaping products, similar to the “track and trace” program it already uses for legal cannabis.

Such a program would allow it to track the amount of vaping product distributors are giving retailers. The department would then track that against the tax it is collecting from retailers. That would help the state see if retailers are making money from illicit or untaxed products, said Nick Maduros, the department’s director.

Josh Drayton of the California Cannabis Industry Association says the legal marijuana industry already follows rigorous standards and it supports efforts to place those same standards on nicotine-based products.

Medical cannabis: New State Law in Oklahoma

Cannabis laws are very clear in Oklahoma. The state legalized medical cannabis in October 2018. Since then, the medical marijuana industry has boomed in Oklahoma. Notably, the industry has brought in more consumers, growers, dispensers, processors, tax revenues, and patients in the state. However, there are some challenges. A new medical marijuana law hit Oklahoma. Let’s discuss the changes.

New state law for medical cannabis in Oklahoma

There’s a new law for medical cannabis in Oklahoma. The new law aims to regulate product labeling and drug testing policies. The new law requires medical marijuana businesses to track every transaction electronically.

A recent Business Intelligence report discussed how banks aren’t sure about providing funding for the cannabis industry. Also, real estate owners and landlords are hesitant about doing business in Oklahoma.

Banks could expect some changes soon. Recently, CNN reported that the House will vote on the SAFE Banking Act soon.

Medical cannabis industry boomed in Oklahoma 

The medical marijuana industry has been expanding in Oklahoma since legalization last October. In November 2018, the first month after legalization, Oklahoma collected $1,300 in sales tax from medical cannabis. Overall, more patient applications increased medical cannabis sales. According to the Oklahoma Tax Commission, the state collected more than $1.6 million in excise tax in May. Also, state and local sales taxes added another $2 million in May.

Challenges the medical marijuana industry 

Currently, the medical cannabis industry in the US faces research challenges. Marijuana is still a Schedule 1 drug under federal law, which makes it challenging to research the plant and understand the benefits. Medical cannabis helps treat chronic pain, chemotherapy-induced nausea and vomiting, and multiple sclerosis. Studies have shown that CBD-based products also help treat epilepsy to some extent.

Recently, the vaping industry took a hit. Many cases have shown that vaping can cause lung-related diseases. As a result, the FDA and CDC are researching whether cannabis and vaping are related. Some of the patients reported vaping THC, CBD, or some combination. To know more, read Cannabis Industry Heats Up, Trump Might Ban Vaping.

Could federal legalization help?

There’s a lack of funding and resources due to federal restrictions on marijuana. According to a Vox article, the Department of Justice restricts research on marijuana use.

Many presidential candidates want to make marijuana legal at the federal level. The US needs more marijuana research to understand its advantages. Notably, better research requires funds and resources.

Cannabis players are benefiting 

Cannabis players are attracted to the growing medical marijuana industry in the US. Innovative Industrial Properties (IIPR) provides real estate solutions to medical cannabis players. So far, the stock has gained 2.1% in September. The company mentioned in its second-quarter earnings that it made acquisitions to drive growth:

  • In April, IIPR acquired a 51,000-square-foot industrial property in Pennsylvania for medical-use cannabis cultivation and processing.
  • In May, the company acquired an 11,000-square-foot industrial property in Ohio for medical-use cannabis processing.
  • IIPR owns three properties in Michigan.

Aurora Cannabis (ACB) reported disappointing fourth-quarter results. However, the company saw continued growth in its Canadian and international medical marijuana business in the fourth quarter. The kilograms of medical cannabis produced rose 86% sequentially. So far, the stock has fallen 0.9% in September.

Canopy Growth (CGC) (WEED) saw gross revenues of 23.6 million Canadian dollars from its Canadian and international medical channel in the first quarter of 2020. Therefore, the company expects its international medical revenues to grow in the coming quarters. Recently, Canopy Growth launched a medical marijuana training program in Montreal. So far, the stock has gained 17.7% in September.

We think that President Trump could use medical marijuana in his reelection campaign. Read Marijuana: Will Trump Have an Edge over Biden? to learn more.

Stay tuned with us for more insights into the cannabis industry.

The African origins of cannabis culture and how it got to the U.S.

Did you know that the roots of today's cannabis culture can be traced back to the African continent from hundreds of years ago? According to Dr. Chris Duvall, author of The African Roots of Marijuana, the forgotten history of global cannabis culture continues to have contemporary influence, writes Timothy Harris

“Africa is ignored in the collective historical narrative," Duvall writes. "More important, the nonportrayal of Africa intellectually justifies notions that drug use is a racially determined behavior. The collective narrative, being unconstrained by evidence of the plant’s African past, enables anti-Black, racial stereotypes about cannabis drug use. In the United States, one outcome of these stereotypes is biased drug-law enforcement.” 

In his book, Duvall investigates questions of where cannabis came from, and who first smoked it. We learn that no, contrary to stereotype, neither Rastafarians nor hippies had anything to do with the origins of cannabis use or cultivation. In fact, if you look back far enough into history, you'll learn that cannabis arrived in Africa about 1,000 years ago, by way of south Asia.

But before we dig into the African roots of cannabis culture, let's identify our terminology. In the scientific community, there are two genetic groupings of cannabis plants: Cannabis indica and Cannabis sativa. This distinction is actually where we get the terms for the effects of your favorite strains, though the taxonomic names have nothing to do with that. Scientists use the name Cannabis indica for plant groupings that have psychoactive qualities and Cannabis sativa — sometimes just called “hemp” — for those that do not. When your budtender says a particular strain is “indica” or “sativa,” they are referencing the “folk meaning” of those terms, not the formal names of these genetic groupings of cannabis plants. 

This article is focused on Cannabis indica, meaning psychoactive cannabis, more broadly (as opposed to a strain that might make you extra sleepy). 

From an evolutionary standpoint, Cannabis indica originated around the Hindu Kush mountains (yes, the Kush Mountains) in southern Asia. Around 4,000 years ago, people in this region processed cannabis in two ways: for resin, called charas, and for the flowers. Indeed the original Hindi word for cannabis flower, dating back at least 3,000 years, was “ganja.” Sound familiar?

At this point in history, the production of ganja in southern Asia is some of the most compelling early evidence of harvesting cannabis buds in particular, although they were mostly consumed in the form of edibles, like bhang, a smoothie-like concoction popular in India and in Hindu mythology. 

Dr. Duvall studies historical names for cannabis to trace the movement of the plant, and found that it entered Africa from the east. 

This is where it gets good. Cannabis edible culture developed into a smoking culture. 

“People discovered that their preexisting technologies of smoking transformed the plant drug, changing it from a slow-acting edible drug into a fast-acting, easily-dosed pharmacological agent,” Duvall writes.

Once in Africa, different names for cannabis started to show up regionally. One such name that is still used today is “hashish.” This word came into use in Egypt by 1200 and colloquially translated to “the herb.” 

As cannabis spread to western Africa, the names for cannabis changed, and one very important term for modern cannabis appeared in historical literature. 

The existing documentary records that researchers work from were primarily written by European colonizers who weren’t very interested in understanding African culture or Bantu languages.

For example, an Englishwoman in Sierra Leone circa 1847 wrote about cannabis (not yet realizing it was a distinctive plant) as a “tobacco of poisonous-smelling qualities.”  This wasn't out of the ordinary, however, as Europeans mis-reported many of the African words for cannabis as “tobacco" quite frequently "probably because they did not know or care what Africans were smoking," Dr. Duvall writes. "Europeans widely called cannabis 'African tobacco,' 'Angolan tobacco,' and 'Congo tobacco' to distance their own smoking practices from African ones." (Regarding the term “Congo,” it’s important to recognize that slavers created this word as a catch-all to describe various ethnic groups of West Africa. Prior to slavery, “Congo” did not designate any cultural, linguistic or ethnic group.) 

Beyond Europeans'  inaccurate records regarding cannabis use among Africans at the time, there is added obscurity in the historical record because of the long-standing stigma associated with cannabis use. There are at least two recorded instances, particularly by “Afro-Brazillians,” using the Portugese words “tabaco,” meaning tobacco, and “fumo,” meaning smoke, in order to intentionally disguise their cannabis use. (In a sense, asking if someone “smokes” is, and has been, a universally understood way for cannabis users to discreetly recognize each other.) 

Despite, however, the poor record-keeping and intentional ambiguity, Dr. Duvall has pieced together enough evidence from what Europeans wrote to show that people in west Africa referred to cannabis as either riamba, liamba, diamba or iamba — pronounced “jamba.” The prefix ma- was added to words to show pluralism, just like how in English we add an -s to indicate multiples.

“The plural marker ma- was used historically to mean ‘some,’ so ma-riamba would be ‘some cannabis to smoke,’” Dr. Duvall tells Civilized. 

Hence, “mariamba” is where the word “marijuana” comes from. The word “marijuana” as we know it today didn’t appear until 1846 in Farmacopea Mexicana, though it was spelled “mariguana.” In most following instances, the word was spelled marihuana. 

This word cognate group riamba, liamba, diamba and iamba appeared in writing in Brazil by 1839. But how exactly did a Bantu word cross the Atlantic Ocean from Africa to the Americas? Around this time, millions of Africans were captured as slaves and taken across the ocean. Captive Africans are responsible for bringing centuries-old cannabis culture and knowledge to the Americas. But, it wasn’t a direct path to the United States.

You might be wondering if slaves taken directly to the modern day U.S. brought cannabis knowledge with them. Perhaps. But of the 10.7 million slaves known to have survived the trans-atlantic voyage, fewer than 400,000 (or less than four percent) were taken directly to North America. 

So now you might assume that migrants from South and Central America to the U.S. are responsible for bringing cannabis to the States. However, that's not the case, either. But what these migrants did bring is the knowledge of cannabis as a smoked drug.

450px Brooklyn Museum 22.1108a b Water Pipe

There is archaeological evidence of Africans using water pipes made from clay or large gourds as early as 1600, specifically for smoking cannabis. More simplistic than that, even, the basic understanding of cannabis anatomy and the chemical properties of the flowers is owed to Africans hundreds of years back. Bongs, buds, pipes and even the words we use to talk about cannabis have clear roots outside of the U.S.. Modern cannabis culture is a direct result of the staunch transmission of tradition through generations. Cannabis is global, it doesn’t belong to anyone, and it’s important we start treating everyone equally, considering that notion.

Cannabis was already present in the United States. The plant arrived via European settlers who had traded with Asia and Africa and was most often meant to be used as a medicine. But, the trading of cannabis plants between continents often excluded the trading of cannabis knowledge, thus most cannabis-based products at the time were prepared improperly and were virtually useless and certainly non-psychoactive. An 1862 issue of Vanity Fair contains an ad for “hasheesh candy” to cure nervousness, weakness, melancholy and confusion of thoughts. 

“For the most part, people in Europe and North America had no knowledge or understanding of getting high from cannabis," says Duvall. "And so marijuana, that term, but also the use of the plant as a smoked drug, shows up early in the 1900’s in the United States.” 

Migrants, brought to the United States as laborers, also brought with them cannabis smoking culture.

“Cannabis literature has built up this ‘race’ and ‘racial’ narrative but it neglects the role of ‘class,'" Duvall says. "Historically, the people who used and relied upon cannabis were the people who were ‘down and out,’ people who were in marginalized social classes...those are the people who really found value in cannabis.” 

A 2013 federal survey revealed that this trend is still apparent today — those in lower social classes tend to use cannabis at a higher rate. Cannabis has always been used by those most needing therapeutic relief, both physically and mentally. 

African cannabis culture and knowledge arrived to the U.S. via migrant workers from South and Central America, as well as via sailors from Africa in the late 1800s. The arrival of cannabis to the U.S. via black and brown folks is undoubtedly, part of the basis of historically racist drug law enforcement. In fact, Dr. Duvall says that the “j” in the word “marijauna” arose from “American English discourse that tagged the plant drug Juana to strengthen portrayals of its unsavory Mexicanness in the early 1900s.”

Popularly, Harry Anslinger, the first commissioner of the U.S. Federal Bureau of Narcotics, is portrayed as a mastermind behind the plan to target minorities by criminalizing cannabis use. However, truthfully, Anslinger was mostly concerned about opiates

It is true that Anslinger was largely responsible for cannabis prohibition policy-wise. The U.S. formally outlawed cannabis with the Marijuana Tax Act of 1937, but several other nations, including Mexico (1920), Greece (1890), and South Africa (1870), had already banned cannabis use. The U.S. was not the first to adopt totalitarian cannabis laws. In 1877, the sultan of Turkey even ordered that all cannabis be confiscated and destroyed across the nation. 

Global controls on cannabis began in 1925, when the League of Nations, the precursor to the United Nations, held its second conference on international drug control. A handful of African nations sought to add cannabis to the breadth of global drug control. 

“They had their various reasons for doing that, but that move is what made it so that Anslinger really had ground to say, ‘Let's consider cannabis more broadly than just these state and local ordinances that exist in the U.S. at the time. This is a global issue.’ That’s what really made it so that he could include cannabis in U.S. drug laws,” Dr. Duvall said. 

Beyond global discussion of cannabis, Anslinger was able to outlaw cannabis use because it was commonly associated with two highly vulnerable populations: Black jazz musicians and Mexican immigrants. The problem with racism and cannabis in the U.S. is systemic. It is, and always was, bigger than just one person. 

“United States law enforcement has been racist since it was founded. Drug-law enforcement has been racist since it was founded,” said Dr. Duvall. 

What is the cause of the misinformation? Most of the literature available covers the 1960s-70s, Anslinger and the U.S. exclusively, ignoring the rest of global history. 

“We often lose perspective of how cannabis existed around the world,” Dr. Duvall said.

Nearly 100 years after the beginnings of global cannabis control, the world is finally seeing a shift. In the United States, 11 states and Washington DC have legalized cannabis for adult use, and 33 states allow for medicinal use. In Mexico, Greece and South Africa — some of the first nations to outlaw cannabis — the laws are changing, too. Greece and South Africa both allow for some cannabis use. Mexico is currently in the midst of nationwide drug law reform which will likely include cannabis decriminalization at some level. Perhaps through globalization, the same process that brought the spread of prohibition, a wave of legalization will supercede these antiquated paradigms. 

How radio frequency technology is maintaining high quality cannabis

Pioneered by food safety companies, the cannabis industry is starting to use radio frequency disinfection processes to remove pathogens while maintaining quality.

How dirty is your pot? Odds are, it’s probably teeming with mold and mildew. In sizable markets such as Colorado and Nevada, as well as Canada, growers are required to report Total Yeast and Mold Count (TYMC) as part of their required regulatory compliance. If numbers exceed established minimums, whole crops and millions of dollars can be lost. Established technologies from the food industry are now being applied to the cannabis industry, allowing growers to overcome this risk and sell more product.

Yeast and mold are microbial pathogens. Depending on the type of grow, indoor or outdoor, they can be incredibly pervasive. It turns out, the conditions that are perfect for growing cannabis are also the ideal growing environments for mold and mildew.

Growers nationwide are looking for treatment options. Whatever option they choose should be affordable, scalable, non-toxic, and have little impact on the quality of the final product. There are a variety of methods available, though very few check all the boxes listed above. Traditional methods, like those examined below, compromise product integrity, and leave a lot of room for improvement.

Autoclave technology uses high heat, steam, and pressure differentials to sterilize products. Though this method is very effective at killing pathogens, it can also decarboxylate cannabis and produce a change in its color, taste, and smell.

In Canada, irradiation has been the standard remediation technique to reduce microbial pathogens. Though very effective and scalable, ionizing radiation, which utilizes cobalt 60, can create cancer-causing chemical compounds in the cannabis. Further, growers cannot conduct this process on site.

Hydrogen peroxide is an affordable treatment for yeast and mold. It’s non-toxic, but only treats the surface of the plant and can cause oxidation throughout, removing terpenes and burning the cannabis.

Extraction is often the favored solution among growers facing a mold and mildew problem. It is one of the few methods of remediation approved by the Colorado Marijuana Enforcement Division. Supercritical gas extraction will kill nearly any contamination in one’s product; the drawback is the flower is now a concentrate, which is drastically less profitable.

Though each method has its appeal, there are few capable of treating the product without lowering its quality. That’s where technology from the food industry comes in. Food safety companies pioneered the use of radio frequency (RF), a proven disinfection process to reduce pathogens. This low-impact treatment is now being used in the cannabis industry and is ideal for killing contaminants while preserving potency and the product’s sensory qualities.

RF is non-toxic, organic, chemical-free, scalable, and effective. Total THC is preserved, moisture loss is minimal, and flavor and aroma are preserved.

RF machines excite the water molecules within the substance, creating friction and, consequently, heat. The machine closely regulates the temperature, heating the product to the exact point at which the mold is destroyed.

This method is highly effective and has been proven safe for the food industry for more than a decade. As such, it may become the preferred method for growers as the industry expands. We spoke with Arthur de Cordova, managing director at Ziel, a food and cannabis safety solutions company, to learn how radio frequency treatment technology is impacting the cannabis space.

Originally, Ziel worked closely with tree nuts – almonds, pecans, and macadamias. They developed their RF technology with University of California Davis to address a salmonella outbreak in almonds nearly a decade ago. It wasn’t until they were approached by the operations manager for a cannabis company in Pueblo, Colorado that the company decided to develop a machine specifically for the marijuana industry.

“There’s a very smart young man who we owe it all to. He found us online and went to an agricultural expo in California’s Central Valley, where we had a booth. We were showcasing our technology for the food industry and he showed up wearing a little backpack and tapped us on the shoulder.” De Cordova continued: “He said, ‘Hey, you guys are experts in remediating microbial pathogens such as salmonella and E. coli. Mold is a microbial pathogen too, so it’s under the same umbrella. Can you address this for our product?’ And that product was cannabis.”

De Cordova realized they would have to build a machine that would function specifically for this new product. “We moved from a very high-volume, conveyor belt system for our almonds, 2,500 pounds an hour, to a batch process of twenty pounds in less than 15 minutes.” They modified their existing technology to create a batch process that wouldn’t affect the integrity of the product.

APEX Machine

De Cordova went on to explain the process in more detail: “The RF system uses a set of probes to monitor temperature in real time. When we put a batch of twenty pounds of flower into the APEX, we insert six temperature probes in a range of flowers, because not all flower moisture is the same. If there is more moisture present, the dietetic – or volumetric – thermal process will occur faster. Once the flower hits a certain target temperature, the machine shuts off and the process is complete.”

This technology could be revelatory even in states without mold and yeast regulations. No one wants to breathe in pathogens, not to mention the poor flavor profile of mold. Mold- or yeast-laden products can harm a brand’s reputation. In an increasingly competitive market like marijuana, reputation is everything. Add to that the stringent regulations surrounding advertising and word-of-mouth recommendations become even more important.

RF has become the preferred remediation method for Los Suenos Farms, the largest outdoor cannabis farm in the country.

Los Suenos Farms Operations Manager Ketch DeGabrielle has been using Ziel’s APEX exclusively for the past three years. “After exhaustively testing and researching all treatment methods, we settled on radio frequency treatment as the best option. APEX allowed us to treat 100 pounds of cannabis in an hour – a critical factor when harvesting 36,000 plants during the October harvest.”

3 overhyped cannabis stocks to avoid today

Everyone was expecting that the legalization of adult-use marijuana would create a “supernova” on the stock market. There was a stellar explosion but only in the valuations of the cannabis companies.

People are starting to realize that cannabis stocks are overhyped. The sky-high valuations are coming down and the period of reckoning is at hand. Hexo (TSX:HEXO)(NYSE:HEXO), Canopy Growth (TSX:WEED)(NYSE:CGC), and Cronos (TSX:CRON)(NASDAQ:CRON) are the overhyped cannabis stocks you should avoid.

Hard sell mode

The medical application of marijuana as pain management in various illnesses is enough to heighten interest among pot stock investors. There’s no need to prop up this market that could reach US$148.35 billion by 2028

But Hexo wants to exploit the marijuana craze and be on the spotlight. The cannabis grower entered into a joint venture with Molson Coors Brewing. Because of the perceived medical benefits of cannabidiol (CBD), the two companies announced plans to introduce CBD-infused beverages.

Hexo believes that non-alcoholic CBD-infused beverages would be a big hit. Meanwhile, Molson Coors is banking on the enormous potential sales of this new line of drinks to offset the weakening beer sales.

Canopy Growth was able to entice beer giant Constellation Brands to invest $4 billion and become a partner in its quest to gain a significant share of the CBD beverages market. Hexo and Canopy are on hard sell mode when Health Canada has yet to legalize CBD-infused beverages and other derivatives.

The tentative launch date of the new products is December this year. However, Hexo and Canopy are entering a crowded space with big names like Anheuser-Busch InBev joining the fray. Sales could go flat as the stiff competition would lower prices and drive down profit margins.

Still, the first hurdle is the legalization by the regulatory agency.

Overpriced cannabis stocks

The industry heavyweights along with the second-tier cannabis operators are in a tailspin since April of this year. Investment analysts agree that cannabis stocks are overvalued and overpriced.

After sealing a deal with global tobacco giant Altria, Cronos had the resources to gain substantial market share, and its stock price rose to as high as $31.77 in early March. But the high growth didn’t come, which was a big disappoint to eager investors. As of this writing, CRON is down 51.36% to $15.45 from the said high.

Cronos is overvalued compared with industry peers. The $1.8 billion Altria investment was the main reason for its sky-high valuation. Thus far in 2019, Cronos is reporting sub-par financial results.  Cronos is undeserving of the premium valuation it enjoys today.

The company needs to accelerate growth because it has the slowest year-over-year revenue growth in the industry.

High risk, high reward

The depressed prices of Hexo, Canopy Growth, and Cronos are tempting but be very cautious. There’s a strong potential these cannabis stocks will deliver high returns to you in the future. However, let the companies execute the respective strategies first and not rely on the hype.