Latest

In the first year since hemp has been legal for commercial cultivation on the federal level, people across the United States are jumping at the opportunity to try their hand growing the legendary plant.

According to new numbers from the hemp advocacy group Vote Hemp, this year, 16,877 farmers received a license from their state to grow hemp (defined as cannabis with less than 0.3% THC) — for a total of over 500,000 acres of hemp licensed for cultivation in 2019.

Those are staggering numbers compared to 2018, when states issued 3,546 licenses for people to grow hemp and U.S. farmers harvested 78,176 acres of hemp.

However, Eric Steenstra, president of Vote Hemp, noted that many of those farmers are first-time hemp cultivators or even first-time farmers, and that he doesn’t expect all 511,442 acres of hemp to be cultivated.

“It’s still a lot of hemp, but a huge number of people licensed to grow this year had no experience and had never grown hemp before,” Steenstra told Cannabis Now. “It’s a lot of small family farms. They’re growing 1,000 plants, 500 plants. Lots of small producers.”

Because of the number of novice growers, a lack of easily available hemp genetics, late planting (either because of a long winter or because of state licensing delays) and other complicating factors, Steenstra thinks there will be a significant amount of crop failure and unharvested hemp.

“The good news is people are starting small and they’re learning through the process and that’s a good thing,” he said. “But I think it’s clear that there’s a lot of inexperienced people growing this year and that’s why we’re expecting a smaller percentage of licensed acres to be harvested.”

In a press release, Vote Hemp estimated that they believe 230,000 acres of hemp will actually be planted this year, and that only 115,00-138,000 acres of hemp will be harvested this fall.

Has the Hemp Hype Gone Too Far?

Back in March, U.S. Secretary of Agriculture Sonny Perdue warned American hemp farmers that hemp might not be the miracle moneymaker they were hoping for.

“What is the market potential of industrial hemp? Farmers in the United States are so productive, they could crash this market before it gets off the ground,” Perdue told online news agency Cheddar on March 19.

It’s worth noting that the USDA hasn’t even released federal regulations for growing hemp yet. The agency has stated that they’re hoping to have regulations released in the fall, including regulations on things like pesticide use, licensing and hemp testing requirements. That means that all of the licenses farmers have received are under the 2014 Farm Bill, a law that set out a pathway for state pilot hemp programs. Today, 46 states have passed hemp legislation and 34 have active cultivation programs, according to Vote Hemp.

“I think there’s definitely a concern about people growing too much hemp,” Steenstra told Cannabis Now. “Whether or not we reach a saturation point this year, I’m not sure. So far, demand is outstripping supply. This could be the harvest where we finally have so much hemp it could be a buyer’s market, but I don’t know for sure. We’re definitely heading in that direction.”

However, Steenstra says that if hemp farmers this year struggle to find a path to market for their hemp, the United States might not see as many people apply for licenses next year.

“It takes a significant investment of time and money to grow hemp, and if [this year’s farmers] don’t see a return on investment, they won’t be back next year,” he said. “Market forces might solve the problem.”

What Does Hemp Production Mean for Cannabis Farmers?

There’s currently a gulf between the “hemp industry” and the “cannabis industry,” and it’s all thanks to the federal government’s attitude towards one pesky, legendary cannabinoid: THC. Because the federal government has defined hemp as the cannabis plant with less than 0.3% THC, cultivators growing cannabis plants that are chock full of every terpene and cannabinoid except THC can thrive in a hemp industry with less regulation and less taxes than the cannabis industry.

Throw in the fact that the hemp industry has the blessings of the federal government and that many consumers don’t seem to care if their CBD comes from hemp or cannabis, and you’ve got the setting for some potential competition between hemp farmers and cannabis farmers.  

But, “that protectionist mindset isn’t good for anyone,” says Steenstra. “We want hemp and cannabis to coexist and we have to figure out how to make it work…. A combination of too many regulations and too many taxes in the cannabis industry doesn’t benefit anyone, and hemp is a tempting direction for cannabis regulations to head in.”

California, for example, legalized hemp for cultivation in 2019 and Steenstra says it immediately jumped to being one of the top 10 states by licensed hemp acreage. The state is the home to the country’s legacy cannabis growing region, the Emerald Triangle, where many longtime cultivators have been struggling in the face of California’s stringent cannabis regulations and stiff competition from venture-capital-funded corporations.

The state also technically only allows CBD products to be sold through licensed cannabis dispensaries (which increases the burden for hemp-derived CBD products to make it level with cannabis-derived CBD products) — though this rule is rarely enforced. Steenstra said that California is a location where the conflict between the regulations around hemp and cannabis could come to a head, and provide a potential nationwide solution.

Oregon, however, adds another complication. There, cannabis cultivators are reporting that some reckless hemp farmers are using “open pollination” methods, where they leave male plants outside near female plants. That pollen from the male plants can travel far, and ruin entire cannabis crops by forcing the flower-producing female plants to seed.

Currently, no state has regulations that make sure all of 2019’s new hemp farmers know what they’re doing with their male plants.

An Oregon analytic laboratory is offering a new test for cannabis products to detect the presence of vitamin E acetate, an additive that has been implicated in the rash of vaping-related lung illnesses that have sickened hundreds and led to at least six deaths. Pixis Labs in Portland began conducting the test for consumers on Monday, according to a report in local media.

Pixis Labs developed the test after it was announced that state and federal health officials were looking into the possibility that vitamin E acetate, also known as Alpha-tocopherol acetate, could be associated with the hundreds of pulmonary illnesses that have been reported in dozens of states. The substance, a supplement designed for oral or topical use, is sometimes used to thin or dilute the cannabis oil in vape cartridges.

Derrick Tanner, the general manager of Pixis Labs, said that the company has tested several cannabis oils from existing customers to validate the process, although he declined to say if any vitamin E acetate was detected in the samples provided. He also said that he expects the new test to generate considerable interest from not only consumers but the cannabis industry, as well.

“Anyone who’s […] not even just generating cartridges and oils, anybody who’s ancillary in this service line is interested in having this as an additional test for their product,” Tanner said. “Everyone’s concerned about it right now.”

Tanner said that diluting commodities to increase profits isn’t restricted to the cannabis industry. The practice is also sometimes carried out in the food industry, with honey and olive oil being notable examples.

“Any time you have a commodity that’s highly valued, and there’s a way to increase your profits one way or another, there’s going to be certain people who may take advantage of that and try to [stretch their commodity] out.”

Tanner told High Times in an email that the new test for Alpha-tocopherol and Alpha-tocopherol acetate is available at a cost of $140 and requires a 3-gram sample to perform.

Are Tighter Regulations Coming?

The Oregon Liquor Control Commission, the agency tasked with regulating the legal cannabis industry in the state, does not currently require testing products for vitamin E acetate. But with the continuing spate of lung injuries, Mark Pettinger, a spokesman for the agency, said that stricter regulations could be enacted.

“Because of the vaping illness crisis, the OLCC will consider taking whatever action is necessary to protect consumer health, including the recall of tainted product, and banning inclusion of questionable additives into marijuana products that threaten human health and public safety,” he said.

The Centers for Disease Control and Prevention reported late last week that there have been 380 confirmed and probable cases in 36 states of lung illnesses experienced by people who vape. The previous week the agency had announced that more than 450 cases of pulmonary disease could be associated with vaping, but that number also included reports of possible cases.

Also last week, the Trump administration announced that it would ban the sale of flavored nicotine vape products.

A UK company is planning to list a £100m float on the stock market – poising it be the biggest cannabis company on the London Stock Exchange.

Cannaray, a British medical cannabis company, closed last Monday with a £7.8m (~€8.8m) Series A Funding round and hopes to raise more than £30m in the coming year in the hope of floating the £100m value.

The round came to an end at the same time Cannaray announced its new purchase of Therismos – a European drug importer and distributor – which could mean the company will see itself becoming a lead player on the emerging European medical cannabis market.

Cannaray, Newey, and Brexit

Cannaray has already set up a subsidiary in the Republic of Ireland in order to avoid future Brexit-related problems. It has also partnered with Newey which is allocating Cannaray space for cannabis growth. Newey is currently pending licencing and if it is successful it will be the third company in the UK to secure a permit for growing cannabis. Newey is the largest horticultural company in the UK and will also be providing lab space alongside growth space.

Cannaray is set to launch its range of CBD based products later this year. The company already has a strong scientific advisory board comprising neurology specialists, palliative care specialists, pharmacists and drug delivery experts, as well as having former banking colleagues on the boars including Sir Nigel Knowles, ex global co-chairman of DLA Piper and Chris Sullivan, ex-deputy group CEO of RBS.

Cannaray has put together a team whose expertise covers IPOs, building companies through consolidation, life sciences, media, consumer and retail. Following the Therismos, Cannaray will be pushing its strategy to become the leading European medical cannabis company, planning to raise additional capital in order to fund medical cannabis production and open up markets beyond the UK, beginning with Germany and Poland this year.

There is a common misconception that cannabis brands and dispensaries are unable to market their businesses using modern day digital advertising tools.

While it is true that the major players in online advertising (e.g. Google and Facebook) have severe restrictions or outright bans on advertising cannabis and/or hemp products via their advertising platforms, there are digital advertising solutions (such as Surfside) which cater specifically to the cannabis and hemp industries that can be equally or more effective in helping a company acquire and retain customers. 

The best of these solutions make use of the same cutting-edge tools that mainstream digital marketing providers offer, including data modeling, intelligent targeting, and programmatic advertising.

However, effective digital marketing takes more than the right tools -- you also need the right strategy. Here are some tips that can help maximize the impact of your digital marketing efforts:

1. Get to Know Your Customers

The most important thing a company can do in order to accurately target new and existing consumers is to understand who its current customers are and how they are interacting with the brand.

This means being able to track every touchpoint a customer has with a company in both the physical and digital worlds. These kinds of interactions include purchases, brick and mortar visits, social media interactions, website visits, and participation in loyalty programs or other offline events.

Aggregating all these siloed events and creating a single-view of the customer allows a brand to see all the different interactions a consumer may have with a brand to better understand what touchpoints are leading to certain actions.

Understanding how customers enter and exit the purchase funnel will allow you to influence existing and new customers at the right moment and location in order to continue to grow your business.

2. Personalize Your Message

Once you have created a schema to collect and analyze your customer data, you can begin to segment those customers into different audiences based on their attributes.

Audience segmentation is a great way to identify and market to similar consumers based on their purchase habits, similar demographic profiles, or even their behaviors in the physical or digital world.

By analyzing your customer data and the attributes that define a given segment, you can start to personalize the messaging and experience for each audience. This allows your brand to create tailored and unique experiences based on the interests of your different audience so that there is less friction for the consumer when making a purchase or interacting with your brand.

These personalized experiences can be utilized within advertising copy, website design, and even product development so you are always growing and developing based on changing market demand. 

3. Understand the Power of Lookalike Audiences

In order to grow your business you will need to reach people who are not yet your customers.

But how do you know who you should spend time and money on trying to reach?

This is where the power of lookalike audiences comes into play. Lookalike audiences enable you to identify and market to people who most closely resemble your best existing customers.

By tracking real-world cannabis behaviors, like purchase history and dispensary visits, and marrying these attributes to a larger demographic profiles, including financial and lifestyle attributes, you can use your current customers to identify prospective customers through advanced lookalike modeling. By reaching people who are most similar to your best existing customers, you are much more likely to find new customers in a much more efficient manner than trying to reach the entire online universe. 

4. Stay Compliant

One of the tricky parts of marketing cannabis products in the digital space is ensuring you are in compliance with the laws and regulations that govern each state’s cannabis industry.

This means ensuring your ads are only being seen by individuals of legal age in states where cannabis is legal.

One of the best ways to ensure this is through location-based advertising and device-level targeting to verified audiences. Location targeting is essential in cannabis/hemp advertising as it ensures that you are not targeting locations that are blacklisted, like schools, and stay within the bounds of states, cities, or even stores.

Audience targeting allows you to predefine the type of consumers you are looking to reach before delivering a campaign – this could be legal-aged consumers, lookalike audiences, dispensary visitors, or people who recently purchased cannabis products.

The combination of location targeting and audience targeting ensures you are reaching the right people in the right locations. In order to accomplish this type of targeting at scale, it is necessary to use programmatic advertising platforms.

Programmatic advertising allows advertisers to access billions of ad impressions with enough targeting and filtering options to be able to reach your predefined audiences in the right locations. Another value to the scale of programmatic advertising is that you can advertise in apps and on sites that have audiences that are 71.6% or greater over the age of 21, which is generally a requirement for any property you advertise cannabis products on.

5. Optimize, Optimize, Optimize

As you begin to run your digital advertising campaigns targeting your different audience segments and lookalike audiences, you will start to collect enormous amounts of data on how effective and efficient these campaigns are.

Measuring the success of these campaigns requires the ability to track engagements beyond simply clicks. It is necessary to receive full attribution data on your media so that you can understand if your ads are driving sales. Once the proper measurement is in place, experimenting with slight changes to your targeting parameters, ad design, and calls to action can have significant impacts on how effective your digital advertising campaigns are.

By collecting and comparing data from all these minor variations you can identify the optimal combination of ad attributes and targeting parameters to dramatically improve the performance of your campaigns and reduce your customer acquisition cost. 

If you grew up in the 80s or 90s in the U.S., you likely remember all the “Got milk?” commercials centered around getting enough calcium and vitamin D in our diets.

I was a kid back then so all I really paid attention to was the images of celebrities that I knew adorning white milk mustaches, but the true focus of the campaign was bone health. Since then, cow’s milk has grown a bit controversial about whether or not it’s even helpful, the message still remains that diet is one of the most important factors in overall bone health.

But calcium alone won’t put you in the clear. Things like physical exercise, tobacco, alcohol, and drug use, eating disorders, certain medications, hormone levels, and even race, age and gender all contribute to overall bone health and the likelihood of developing certain disorders. For example, bone loss is more prevalent in Asian and Caucasian women and can be exacerbated by steroids.

As it turns it, cannabis might also have a place in this list of things that can affect our bones. But what are the implications of this? Can cannabinoids help restore bone health and prevent or delay the onset of bone disease?

What is Osteoporosis?

Let’s start with the most common bone disease, Osteoporosis, which literally means porous bone. It’s a disorder characterized by decreased bone density that leads to reduced bone strength and increased risk of sprains and fractures. It’s estimated that more than 200 million people are currently suffering from osteoporosis.

Before developing into Osteoporosis, the patient will have a condition known as osteopenia – a disorder where the bone is only slightly less dense than regular bone. Often times, there are no symptoms indicating the presence of osteopenia or even osteoporosis. Many patients are first diagnosed when a simple, everyday task results in an unexpected fracture.

There are two types of fractures: “cracking”, like with a fractured hip, or “collapsing”, like in the case of a spinal or vertebral compression fracture. A break can occur in just about any bone in the body, but the most susceptible areas are your hips, ribs, spine, ankles, and wrists.

Osteoporosis has numerous causes – many of which are lifestyle related – but the most common triggers are due to hormonal issues such as low estrogen, low testosterone, and other age-related imbalances.

A 2016 headline that got a lot of attention was titled “Heavy marijuana use linked to 5 percent reduction in bone density”. For their study, the research team analyzed the data of 284 adults who attended primary care centers in the U.K. between 2011-2013; and the results are self-explanatory.

However, other research indicates that cannabidiol (CBD) can help prevent bone disease, hinder degeneration, and accelerate healing. A study published in the American Society for Bone and Mineral Research shows that cannabis treatment helps control osteoporosis by way of the Endocannabinoid System (ECS), which plays a pivotal role in developing, strengthening, and preserving the bones.

During the study, researchers injected either a combination of CBD with THC (tetrahydrocannabinol), or just isolated CBD, into rats with broken thigh bones. While the THC mixture did help relieve pain related to bone injuries and fractures, it was not very effective in actually healing the bone itself or speeding up the rate of recovery. On the other hand, CBD had quite an impact, not at making the bone heal quicker, but at strengthening it to prevent a future break.

According to the results, the bone treated with CBD was up to 50% stronger than the non-treated bones.  

What is Osteogenesis Imperfecta

Osteogenesis Imperfecta is a congenital disease (meaning it’s present at birth) that causes extremely fragile bones. It’s commonly referred to as brittle bone disease and it’s caused by a defect in the gene that produces type 1 collagen – an important building block of bones. There are multiple different variations that can affect this gene.

The severity of OI depends on the specific gene in question. As of now there are 8 known types of OI and the severity is as follows: Type 1 is mild, types 4, 5, 6, and 7 are moderate, and the most severe are types 2, 3, and 8. Most cases of OI are inherited from one parent, although in rare circumstances they can be the result of a new genetic mutation . OI is in autosomal dominant disease and there is a 50% chance of parents passing the genetic mutation, and thus the disease, on to their children.

There is no cure for this disease, but certain therapies and medications can reduce pain and complications associated with OI. Commonly used drugs are biophosphonates which have been successfully used to treat osteoporosis. Further intervention can include physical therapy and surgically inserted metal rods that can be used to artificially improve bone strength and reduce the risk of fractures.

Cannabis and Osteogenesis Imperfecta

As of now, there is no official research on the effects of cannabinoid medication and OI. However, there are multiple studies looking at the impact that cannabinoids have on bone cell formation and function, which indicates that it could be a viable, future option in treating this disorder. OI is a qualifying condition for a medical cannabis card in only one state so far, Connecticut. Disorders of the bones are not yet frequently discussed in the medical cannabis community. 

In 2007, researchers at the University of Sheffield in UK discovered that “cannabinoids may stimulate the recruitment of mesenchymal stem cells (MSCs) from the bone marrow indirectly via an accessory cell and mediated via the CB(2) receptor.” This mechanism is believed to be responsible for increased bone formation following cannabinoid treatment “in vivo”.

Another study, titled ‘Cannabinoids and bone: endocannabinoids modulate human osteoclast function in vitro’, found that low concentrations of CBD and CBG (cannabigerol) can activate human osteoclasts “in vitro”. According to the study, “There is a dynamic regulation of the expression of the CB(2) receptor and the production of the endocannabinoids during the differentiation of human bone cells. These data suggest that small molecules modulating the endocannabinoid system could be important therapeutics in human bone disease.”

Final Thoughts on Cannabis and Bones

Although it’s still a bit unconventional, it seems that cannabis has great potential as possible future therapy for those suffering from diseases of the bones. More research is needed on this topic to determine the full capacity of what cannabinoids can do for these patients, but for the time being, it can be used to relieve secondary symptoms caused by osteoporosis or osteogenesis imperfecta, such as pain cause by a fracture or anxiety relating to the disorder.

The second great Canadian cannabis rush is nearing the starting line, with pot entrepreneurs looking to stand out amid an onslaught of soon-to-be-legal edibles on the market.

Legal cannabis edibles and other derivatives are expected to grow Canada’s cannabis market by three million consumers, or 65 per cent, according to a poll commissioned earlier this year by a leading industry data collector.

The survey, conducted with 3,000 respondents last May by Lift & Co. and Ernst and Young, suggests the country’s 4.6 million adult cannabis users will grow to about 7.6 million after a wider variety of non-smokable licensed products go on store shelves at year’s end.

If so, that would see the percentage of adult Canadians consuming the drug grow to at least 23 per cent.

“I think it will be transformative — it will bring a significant cohort of consumers who were not consuming due to stigmatization or the consumption delivery,” said Jon Kamin, Lift & Co. chief revenue officer.

Numerous licensed pot producers and confectioners have been eyeing the market and preparing for the Oct. 17 second phase of legalization, though the products aren’t expected to be available en masse until December or January.

“The race to win legalization 2.0 is on,” said Kamin.

A profit margin that’s expected to be higher among derivatives than the dried flower that’s been legally available since last October is driving that momentum, he said.

That’s because it’s easier to develop premium brands among edibles and other distillates, said Kamin, than it is among smokable weed.

“Differentiation is very challenging when they’re all coming up with versions of the same flower but once you move into the other forms, it’s about what tastes good or smells the best,” he said.

Retail staffers, also known as budtenders, in Calgary and in the survey have said customers have been asking about edibles for some time, though the only ones currently sold are oil capsules.

The survey found baked goods, food additives and confectionary forms are the most preferred delivery methods for edibles among current users.

Most of those long-term users prefer higher-THC content products, something noticed by most retailers, said the study.

But Kamin said there’s room in the market for producers of lower-THC derivatives, particularly for “entry-level” consumers.

Calgarian Evan Mah is counting on just that and is moving ahead with Friendibles, an operation selling kits for homemade cannabis-infused gummies, brownies and cookies with THC of under 10 mg per piece, which is the maximum federal guideline content limit.

“Most people I talk to think (10 mg) is too high, I think it’s too high,” said Mah, who’ll begin running the business with co-owner Ciprian Georgescu out of a West Hillhurst home.

“We see lots of potential.”

Too much of the existing marketing is being done by those whom Mah considers “insiders,” whose connoisseur approach doesn’t appeal to many consumers, especially newer ones.

“That doesn’t speak to most folks — we’re hoping to produce something more down-to-earth,” he said.

The business will raise capital by crowdfunding, with investors receiving an instructional cannabis consumption tool kit.

Alberta Gaming, Liquor and Cannabis said it’s been working with its more than 30 licensed producers to determine what type of derivative products they’ll be offering.

The Lift & Co. survey found many consumers are still put off by the comparatively high price of legal cannabis compared to its illicit counterpart.

“The ability of the legal market to match illicit prices will be a challenge that may never be achieved,” it states.

It also found many consumers view the legal product as inferior to its black market counterpart, that the former is too dry and lacks aromatic qualities.

“If prices are higher, the value add of quality must match such premiums,” states the report.

The group is launching a more comprehensive online effort to collect consumer and retail data on the still-emerging industry that’ll cover ground that’s been largely ignored, said Kamin.

“The data available on cannabis today is really limited to retail sales, it doesn’t tell you who is buying,” he said.

Investing in cannabis stocks isn't for the faint of heart. The wild up-and-down swings can be dizzying. The risks are real. But the potential pay-off over the long run could be enormous.

Choosing which cannabis stocks to buy involves the same process as investing in any other kind of stock. You'll want to find well-run companies that have great growth prospects, a strong competitive advantage, and a solid financial position.

I think three cannabis stocks check off all of these boxes. Here's why Charlotte's Web Holdings (OTC:CWBHF), Innovative Industrial Properties (NYSE:IIPR), and Trulieve Cannabis (OTC:TCNNF) are top cannabis stocks you can buy right now.

1. Charlotte's Web Holdings

Charlotte's Web pioneered the U.S. hemp cannabidiol (CBD) market. The company, founded by six brothers who were medical marijuana growers in Colorado, developed a strain of cannabis in 2011 that was low in psychoactive ingredient THC but had a high level of CBD by crossbreeding a strain of marijuana with industrial hemp. As word got out that this cannabis strain was effective in treating medical conditions, particularly types of epilepsy, Charlotte's Web's momentum took off.

The U.S. hemp market totaled around $600 million last year. Aggressive estimates call for the market to reach nearly $22 billion by 2022. More conservative analysts project that the U.S. hemp market will total $4.4 billion within the next three years. Either way, Charlotte's Web has a huge opportunity before it.

Charlotte's Web ranks as the No. 1 brand in the hemp CBD market. The number of stores that carry the company's products has more than doubled so far in 2019 to over 8,000 retail outlets, including big chains such as CVS Health and Kroger. No other hemp CBD company claims a higher brand awareness and retail distribution footprint than Charlotte's Web. 

Unlike many cannabis stocks, Charlotte's Web is already consistently profitable. Its revenue continues to skyrocket, up more than 45% year over year in the second quarter. The company has little debt and more than $51 million in cash. Charlotte's Web appears to be in good financial shape to fund its efforts to capitalize on the anticipated massive growth in the U.S. hemp CBD market.

2. Innovative Industrial Properties

Innovative Industrial Properties (IIP) is a real estate investment trust (REIT) that focuses on acquiring and leasing medical cannabis properties. The company currently owns 30 properties in 12 states that have legalized medical cannabis. 

IIP's revenue on a trailing-12-month basis has more than quintupled since the company went public in late 2017. This tremendous growth stemmed from the company's simple business strategy of reinvesting cash made from existing leased properties into new properties. With the U.S. cannabis industry expanding rapidly and 33 U.S. states allowing legal medical cannabis, IIP has plenty of more growth opportunities.

Trading on the New York Stock Exchange has given IIP visibility and stature that no other cannabis-focused REIT has. The company is the clear leader in providing real estate capital for the U.S. medical cannabis industry. 

IIP also claims a solid financial position. The company has been consistently profitable for more than two years. It has a low level of debt compared to most REITs. IIP also pays a nice dividend which currently yields 2.7%.

3. Trulieve Cannabis

Trulieve Cannabis operates 31 medical cannabis stores in Florida as well as a statewide home delivery program for medical cannabis patients. The company also has recently acquired cannabis dispensaries in California, Connecticut, and Massachusetts.

Florida is the third biggest state in the U.S. based on population. Its medical cannabis market is growing by roughly 10% per month. Trulieve expects to expand its number of stores in the state to 44 by the end of 2019. The company also has opportunities for growth in the other three states where it owns operations as well as moving into new markets.

Trulieve was the first medical cannabis company in Florida. This first-mover advantage makes Trulieve the dominant player in the state's fast-growing medical cannabis market. Because Florida only awards a limited number of licenses to medical cannabis dispensaries, Trulieve is in a great position from a competitive standpoint.

Based on price-to-sales multiples, Trulieve is one of the cheapest cannabis stocks on the market. But that low valuation doesn't mean the company's financial status is troubling. Trulieve is consistently profitable. It has a manageable debt load. The company also has a cash stockpile of $54 million. Trulieve's financial position should improve even more as it continues its rapid growth.

The state marijuana industry didn’t like what it saw when it got its first look at Maine’s new track-and-trace system Monday: hundreds and hundreds of 25-cent tags required to catalog every plant’s path to pre-rolled joint, vape cartridge or infused candy.

“This will drive prices through the roof,” said medical marijuana caregiver Dawson Julia of Unity. “It’s going to put a lot of people out of business. It will make medicine so expensive that nobody will be able to afford it. It will guarantee the survival of the black market.”

Five hours later, long after most of the 300 shell-shocked growers, manufacturers and retailers had left the track-and-trace kick-off event, the Office of Marijuana Policy issued a clarification. Individual retail products will not require their own track-and-trace tag after all.

The cost of the tag wasn’t the problem. After all, each individual bar-coded label only costs a quarter. It was the sheer number of tags that would have been required to move a plant through its entire life cycle, especially for processed items, like vape cartridges or marijuana-infused baked goods.

Consider that it would have required 1,178 tags, at a total cost of $295, to convert a 10-pound cannabis plant into half-milliliter vape cartridges, based on typical yields. Turning that plant into single-serving 10-milligram chocolate truffles would’ve required 58,900 tags at a cost of $14,725.

“Those are based on averages, of course, but even if the yields vary a little here and there, that’s crazy,” said Darrell Gudroe of Boothbay Harbor, who sits on the board of the Medical Marijuana Caregivers of Maine. “The labor costs of putting (on) all those tags alone would kill a business.”

Under the clarified system, however, the producer would only need a single tag for the plant, a second tag that covered the harvest batch (that could cover a whole room full of plants if the grower harvested them all at once), and a third tag attached to the final package sold to the consumer.

Under this system, the financial impact of the tagging system could be limited if a grower can harvest a whole group of plants at once and if the consumer can buy products in bulk, growers and retailers said. But single-serving products, a favorite among new customers, would still be hard hit.

The Office of Marijuana Policy and BioTrackTHC, the Florida software company that landed the 6-year, $275,000 deal to track medical and adult-use cannabis grown, processed and sold in Maine, apologized for the confusion caused by the dissemination of incorrect information.

The session drew a huge crowd and covered topics ranging from creation of transportation manifests to cover when marijuana is moved from one place to another, such as from a grow to a testing lab, to how cannabis producers who already use tracking software can export their private data into the state system.

More training sessions will be held for medical marijuana industry members this month. Training for a grower, manufacturer or retailer who will be seeking a state recreational marijuana license once Maine launches its retail program in March will begin next month.

Medical marijuana growers, manufacturers and retailers can start using the program before the end of the year, and will be required to have all their plants and products entered into the system no later than 120 days after it goes live, said Office of Marijuana Policy Director Erik Gundersen.

Created eight months ago, the Office of Marijuana Policy has moved quickly to implement the adult-use marijuana program that had lingered on the political back burner since voters approved it in 2016. That haste has led to several missteps when trying to hire professional consultants.

In its after-hours news release, the state did not explain how this happened, or whether the clarification of how the tagging system works corrected a verbal slip made at a live event during a spirited question-and-answer session, or represented a full-fledged change in state policy.

But that clarification left Jennifer Bergeron of Waterville, a wholesale medical marijuana grower, upset about a morning off work to drive to Augusta and spend “a good couple hours getting completely wrong information” from a state agency created to oversee marijuana in Maine and its expert consultant.

“People who are supposed to implement the program in two months just spent hours giving completely inaccurate information,” she said. “At this point, I’m not sure what the tagging requirements are, so it’s hard to say what they mean to me. I know less after that meeting than I knew before it started.”

She worries the additional regulation, with its extra costs and labor, will drive smaller caregivers out of business, which will end up hurting patients. Prices are already going up, she said. She believes this will not stop the black market, but actually drive people to it.

But Paul McCarrier, a medical marijuana store owner in Belfast and president of Legalize Maine, believes Monday’s events demonstrate how responsive the new agency is to industry concerns, such as the financial impact of new regulations and programs that are still in their infancy.

“I’m pretty impressed,” said McCarrier, who sat through the kickoff session and a three-hour caregiver training class on Monday afternoon. “We brought up a legit point and they responded quickly … Shows me again they are taking what we say seriously. They want it to work. We want it to work.”