These five events come complete with drama and intrigue that make the cannabis industry so interesting, if not entertaining.

Every industry has its fair share of scandals. Just look at the pharmaceutical industry and the opioid crisis or Bernie Madoff’s Ponzi scheme or Enron’s accounting fraud. All are terrible and the size of those schemes may make the cannabis industry scandals look like small potatoes. Still, these top five events come complete with drama and intrigue that make the cannabis industry so interesting, if not entertaining, to be a part of.

PotNetworks

Just the term pot stocks sounds awful. It conjures up shady deals by pump and dump stock jocks. Sadly the stereotype exists in part because it happens in the wild west days of cannabis penny stocks. This past July, PotNetworks (OTC: POTN) President Charles Vaccaro made contact with an undercover FBI agent saying “He was looking for someone to help them liquidate around $100 million in stock in multiple companies and it had to be processed in a foreign brokerage account because the Securities and Exchange Commission was getting tougher on U.S. broker-dealers liquidating large blocks of penny stock.” He and two others, Eli Taieb and Dror Svorai, were all charged with securities fraud, wire fraud, and conspiracy. Svorai was the founder of Vapor Group (OTC: VPOR) and Taieb controls a company called One Investment Capital and owns over 27 million shares of POTN.

The scam was that the men would buy shell companies and according to a story on GoodeTrades, “Then take approximately 20% ownership through debt conversions. They would then transfer shares to an offshore brokerage, sell the shares, and transfer the money back into the United States. The three men are alleged to have previously sold shares offshore but had trouble repatriating the proceeds.” Taieb and Svorai were both released on a million dollar bail, while it isn’t clear if Vaccaro secured his million dollar bail money. He had filed for an extension to come up with the funds, but that was only approved to August 2.

CannTrust

You had one job to do and that was follow the rules. Don’t plant any cannabis in the room until it has a license. Sounds simple, right? However, top executives at CannTrust (NYSE: CTST) got ahead of themselves, perhaps to satisfy shareholders, and did just that. They began growing plants in rooms with pending licenses. The company actually received those licenses, but it was a month after getting busted. It even had the nerve to film a promotional video in front of the illegal grow rooms that used temporary walls.

Since then the company has been in a free-fall as the stock has tumbled, the accused executives were booted out of the company and product was returned to the company unsold. Health Canada seized some of the company’s inventory and is currently investigating all the issues and has yet to make a decision as to how it will punish the company. CannTrust says it will sell the company, but so far it doesn’t seem that anyone is interested. If the licenses get pulled, then it’s just the facilities that have any value. If that’s the case, buyers can wait until they have a carcass to pick over.

Namaste Technologies

Namaste Technologies has continued to try to convince the market that it has moved beyond its checkered past with former founder Sean Dollinger. Namaste’s problems began when the company hosted a promotional event featuring fake nurses in sexy costumes to promote its medical software application. The event was not received well by many in the cannabis community who have sought to distance themselves from a “bro” culture. Plus, it ran afoul of the promotional restrictions set by the Quebec in Canada. But that was just the beginning of Namaste’s woes. Namaste came under a short seller attack by Citron Research in October 2018 which caused the board to form a Special Committee to investigate the allegations. Citron accused Namaste in saying it was planning on listing on NASDAQ in order to bring in investors. “Fake claim of a Nasdaq Listing to get investors to buy the stock. Mr. Dollinger has promised investors a Nasdaq listing and the simple takeaway that comes with it, a higher share price on the back of an up-listing.”

Next, it claimed there was an issue with the sale of Dollinger Enterprises US, which turned out to be true. “With the hope of obtaining the NASDAQ listing on Nov 28, 2017, Namaste announced that it divested of its US assets, Dollinger Enterprises US Inc. Just to be clear, Dollinger said he sold this asset to an arm’s length party… but it was really sold to David Hughes who has been with Namaste since Feb 2015 (and Paul Burn who has been with Namaste since 2016). The Citron report set off a chain of events resulting in Dollinger being removed with cause. In September of 2018, the stock was at $2.65. It never made it to the Nasdaq and lately trades at 33 cents a share. Last month, Meni Morim was named the permanent CEO after taking over for Dollinger.

Doyen Elements

This private company had dreams of becoming a publicly traded company, but instead left a string of small investors lighter in the wallet. Doyen Elements now known as Covalent Collective or Reach Genetics raised money online suggesting that small investors would hit it big once the company went public. In 2017, Doyen Elements which was run by Geoff Thompson, was planning to publicly list its shares on the OTC Market, and was accepting investments prior to its IPO at $7.00 a share. Doyen Elements said it had big plans and was currently building one of the largest grow facilities in North America. However, Thompson was in big trouble at the time with the SEC, which alleged that Thompson, acting through a company called Accelera Innovations Inc. and Synergistic Holdings LLC, sold approximately $1.7 million worth of Accelera stock to investors and that the sale was not registered or subject to an exemption from registration.

This past June, the SEC filed a subpoena enforcement action in the U.S. District Court for the Northern District of Illinois against Covalent Collective, Inc. f/k/a Doyen Elements International, Inc. f/k/a Advantameds Solutions, Inc. for failure to produce documents in an investigation. The SEC’s application alleges that Doyen, through its founder, Geoffrey Thompson, may have violated the registration provisions of the securities laws by engaging in an unregistered offering of securities, and may also have made misleading representations to investors and potential investors about the operations, acquisitions, and projected stock price of Doyen and related entities.

Tradiv

This scandal didn’t occur in 2019, but the story is definitely worth including. A cannabis online wholesale trading company, Tradiv billed itself as the “Amazon of the marijuana industry” by founder Aeron Sullivan. He raised several million dollars for the company as it emerged from the cannabis incubator CanopyBuilder. Sullivan was named an Inc. Magazine 30 Under 30 in 2016 and everything looked to be heading in the right direction. That is until Sullivan and his girlfriend took acid on a trip to Alaska and God spoke to him. Apparently, God had other plans for Sullivan and it didn’t include running Tradiv. He left to pursue a more religious life and is now the Director of Technology at The Bible Project.

The company’s new CEO took it in a different direction leading Tradiv to close up shop losing all the original investor money. Emily Paxhia, the co-founder of Poseidon Asset Management was quoted in Inc.

saying, “Tradiv was the darling of the industry, with a leader–Sullivan–investors loved to love. Losing is part of investing, but this was bad. It was crazy.” Small startups come and go, but this story was truly one for the books.

Hydrate your lips, strengthen your immune system, and smooth out rough skin this fall with these CBD and other beauty products.

As fall draws near and the leaves dry up and the air gets crisper, it’s time to make sure that our lips, complexions and attitudes don’t also dry up, and that our health is at its best. An upbeat outlook and the following six products should have you well on your way to autumnal happiness!

Plump and Hydrate Your Kisser

Vertly hemp infused lip butter is at the top of the list. Not only is it made with full spectrum CBD and Northern California sourced herbs, it has gotten rave reviews from the likes of Vogue. The savvy company also carries body lotion, available in an extra strength option. Keep your lips soft and buttery this fall with the power of CBD.

Keep Seasonal Ailments at Bay

Echinacea supplements should also be high on your list of fall must-haves. Though the science behind it is not yet proven, anecdotal evidence suggests that echinacea’s active components promote immune system wellness and also work as an antimicrobial. With the weather changes sure to happen, this boost could be the difference between a seasonal cold and wellness.

Smooth Out Rough, Patchy Skin

We covered lip butter, but how about body butter? Hemplucid has got you covered with a mega CBD infused body budder that will keep rough elbows hydrated and other tough spots like heels, knees and any other problem skin areas smooth, with no oily residue.

Elevate Your Mood, Elevate Seasonal Depression

Need a boost in mood? Vape pens to the rescue. Even if you’re not living in a legalized or medicalized state and don’t have access to THC cartridges, there’s a mighty good chance that your local head shop carries CBD carts that are said to still reduce anxiety and even out messy moods. Seasonal depression is real and keeping it at bay may take a toke here and there. Do the right thing for everyone and have a puff.

Keep That Summer Glow

Honest Beauty Organic Beauty Facial Oil is a dry face miracle serum that’s incredibly light for an oil treatment. Patchy, dull skin will be brightened up and your face and day will be well improved with botanical oils that nourish skin and help restore moisture.

Give Your Body Boosts of Wellness

Emergen-C has established itself as the ticket to staving off colds and flus with its megadose of vitamin C. They’ve had 40 years to get the formula right and have enriched the powder with a host of B vitamins as well. It’s a safe bet that having a daily dose of this power powder during the changing of the seasons will do a body good.

The first time I saw Charley Hoffman play, you would not have looked at him twice. That was at the Masters in 2015, where he stopped by the 1st tee box to beg autographs off Arnold Palmer and Jack Nicklaus. He was 38 already, a little tubby, a little schlubby, in a hat that looked two sizes too big and a pair of wraparound sunglasses so tight they gave him tan lines. Then he went and shot a 67. Well, like the old salts say at Augusta, the bars of Chicago are full of people who led majors after one round and Charley finished up tied ninth. But still, after 15 years playing pro golf, it was his first top-20 finish in a major.

Hoffman has seemed to make a run up the leaderboard at almost every other major since, 65 at Augusta National, 67 at Royal Birkdale, 68 at Erin Hills. Usually he slips right back down it again but whatever he is going through he always seems to be wearing the same inscrutable expression. You never saw a sportsman give less away about how he is feeling. Which might be why even my friends who love golf don’t get why I have grown quite so fond of him in the past four years. I think it is because, for a man with such an exquisite iron game, he just seems so ordinary. You would never guess he was an elite athlete, until you saw him play.

This is why it was a surprise that Hoffman has just been signed up to promote a new line of CBD products. If there was ever a sign cannabis is going mainstream in sport, it’s Charley, a 42-year-old journeyman pro from San Diego. He is one of a bunch of professional golfers who have signed endorsement deals with CBD manufacturers since the World Anti-Doping Agency took it off the prohibited list in 2018. Bubba Watson and Lucas Glover are promoting it, too. All three of them have spoken about how it helps their physical recovery. Interestingly, Glover has said it helps him cope with his anxiety, too. “For golfers,” Glover says, “the biggest benefit is calmness.”

CBD use is booming in Britain, too. The Saracens locks George Kruis and Dominic Day were so taken with it they have launched their own business, fourfivecbd. It was Day who first discovered it, when he was struggling to recover from an operation to remove torn cartilage from his right knee. “I was in that head space where I was willing to try anything that could help,” he says, “and I stumbled across the article online about how Wada had just taken CBD oil off the banned list, and I thought: ‘Shall I give this a go?’” He ended up buying a bottle of it from a vape shop.

“I’m very careful about the claims I make for it,” Day says, “but for me the effects were pretty instantaneous. Then when I came off it the symptoms came right back.”

When the club physio pointed out how well his recovery seemed to be going, Day sheepishly admitted he had been self-medicating with CBD oil. “A lot of eyebrows went up.” When Kruis was struggling with his own recovery from ankle surgery, Day turned him on to it, too. “He had a very similar experience.” Soon afterwards, they went into business together.

Day holds back from making any grand claims for his product and there are a lot of snake-oil salesmen working in the fledgling market

“The reason we use it is because it’s natural and organic,” Day says, “and the alternative is prescription medication.” Day has been playing professional rugby for 13 years. For most of that time, he was taking four or five lots of prescription anti-inflammatories and painkillers a week.

“We’re all trying to make a living and the only way to do that is to be putting in a shift for the club, so as players we will do anything to get on the pitch. It’s what you do, take an anti-inflammatory to help you through training, take a painkiller to help you out on the pitch, that’s just how it is. But it’s something we’d like to have an alternative to.”

Now, Day takes a CBD supplement every morning “much like someone else would use a multivitamin”. Kruis uses it differently. “George uses it when he needs a good night’s sleep because that’s when a lot of recovery happens.” But while prescription drugs have side‑effects, Day says, CBD has a stigma. “There’s a lot of education work to be done around it,” he says. He holds back from making any grand claims for his product. He knows CBD has become a fad and there are a lot of snake-oil salesmen working in the fledgling market. When it comes to whether CBD could have a positive impact on mental health, he will only say: “The key thing is getting more research done.”

Day adds: “For six months we held off giving it to any professional athletes because we wanted to make sure all our products had been laboratory tested to ensure there was no cross-contamination in them.” A lot of CBD products contain quantities of the psychoactive compound THC, which is still banned by Wada. “Now we have that certification, we’ve got around 400 professional athletes using it from a range of sports: rugby union and league, boxing, MMA, track and field, diving, and swimming.”

They have three full-time employees and are about to take on eight more to run two shopping-centre kiosks. Taking CBD may have helped Glover relax but selling it, Day says, “has been a real whirlwind”.

A new report from BDS Analytics titled “The Global Cannabinoids Market: Will CBD Overtake THC?” is forecasting that CBD sales will reach $20 billion by 2024. This would account for nearly 44%  of the $45 billion total forecasted
cannabinoid market (which includes legal cannabis).

Cannabidiol or CBD is a natural compound found within the cannabis plant. The report notes that CBD was first extracted from the cannabis plant in 1940, but it wasn’t until 1946 that Dr. Raphael Mechoulam identified the structure of CBD and later discovered properties within the compound to treat epilepsy. Since that time, the FDA approved the GW Pharmaceutical CBD drug Epidiolex for use in treating rare forms of epilepsy. Congress also passed the 2018 Farm Bill, which legalized help and set off a tsunami of hemp-derived CBD products onto the marketplace.

Last year, CBD sales hit $1.9 billion. BDS predicts that these sales will grow 49% annually. The report went on to say, “Further, sales of hemp-derived CBD (as opposed to CBD from marijuana) in U.S. general retail stores are expected to makeup $12.6 billion of the $20 billion in CBD sales forecast for 2024.”

The CBD market splits into two categories: the hemp-derived CBD that can be purchased just about anywhere and the CBD from marijuana that contains some amounts of THC. Many consumers believe the latter’s entourage capabilities are more effective. CBD sales in legal dispensaries rose from 3% in 2017 to 10% in 2018. BDS believes that as more mainstream consumers try CBD from hemp, they may be more disposed to going to a legal dispensary to try the marijuana-derived CBD.

The one drawback to the expected enormous growth of the CBD market is how the FDA plans on regulating the products in foods and beverages. The regulatory body has already cracked down on label claims forcing CVS Stores to remove Curaleaf products from its shelves. Hearings were held this past May with over 100 speakers offering their opinions. There is no timeline as to when the FDA will release a guideline as to how corporations and producers should act with regards to CBD products.

CBD Consumers

BDS Analytics Consumer Insights research revealed “That consumers primarily use CBD as a ‘natural’ remedy
for pain, stress, anxiety, and depression. Further, CBD consumers are divided 45% female, 55% male with an average age of 43, 40% are higher-educated and 50% are employed full-time.”

The top-selling CBD product categories are:

1. Ingestibles     $883.5M
2. Topicals          $491.2M
3. Inhalables       $395.4M
4. Pet Products   $63.8M
5. Pharmaceuticals   $16.0M