Canada Already Setting the Blueprint for Cheaper Cannabis

Although the country just became the second nation to legalize marijuana earlier in 2018, Canada has already began to become an example for the rest of the world. While the United States has been tentative about legalizing marijuana, our neighbors up North have figure out how to do so in an effective manner. The country has learned that it did not need to create completely new facilities to produce cannabis, yet can adjust it’s current infrastructure to do so. Greenhouses that once were used to grow consumer products are now being restructured with air filters and light-blocking shades to create the perfect conditions for cultivating marijuana.

“We haven’t changed the footprint… We’ve just changed the crop.” – Rob Hill, CFO of Emerald Health Therapeutics, 2018

Many tomato and pepper plant growers have already began to replace their crops with cannabis plants. According to USA Today, these new, large scale operations are the future of mass production of marijuana. Obviously the goal of most producers of marijuana is to make money, however, these large-scale operations have real implications on the affect of the black market as well. According to Trevor Hughes, these highly sophisticated operations will drive the price of marijuana so low that black marketeers would have no choice but to give up.

Apart of their legalization of marijuana, Canada requires that cannabis be grown indoors by only licensed providers. Companies such as Emerald Health Therapeutics, that grows marijuana in Delta, Canada, have not looked at the regulation as an obstacle, but an opportunity. The company partnered with a longtime produce operation, Village Farms, in a joint venture of their own. Pure Sunfarms, a product of Emerald Health Therapeutics and Village Farms, is already capable of producing ridiculous amounts of marijuana. According to Trevor Hughes,

“Pure Sunfarms [is] capable of producing a staggering 82 tons of marijuana annually from the 1.1 million square foot greenhouse complex about 30 minutes south of Vancouver.” – Trevor Hughes, USA Today, 2018

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Drone image of the Pure Sunfarms cannabis greenhouse operation. The complex is just 30 minutes from Vancouver.

Countries all over the world are watching Canada very closely after their legalization of marijuana. The financial implications of the new law can be ground breaking for many countries around the world. According to Hughes, Trevor Hughes states that just three years ago, wholesale marijuana was selling for $2,000 per pound. Wholesale marijuana currently sells for $600 a pound on average in a few states that have legalized it in the USA, making it far more financially valuable than any other crop. When analyzing on per-plant profit margin basis, lettuce, tomatoes, potatoes, and even almonds are all usually measured in fractions of a penny.

 

Since its cultivation is widely still illegal in many places in the US, many farming operations have decided to stay away from marijuana, fearing potential prosecution. By Canada making it legal nationwide, they actually combat the problem of marijuana related crime face-to-face. With the ability of many to produce marijuana legally, the country has already driven down the price of cannabis. By driving down the price, experts agree that it will assist the Canadian government in ridding itself of cartels and other black-market dealers. According to BDS Analytics,

“In Colorado, for instance, the price of smokable “flower” has dropped 40 percent since January 2014, from $7 a gram to $4.19 a gram today,” – BDS Analytics, 2018

As laws continue to grow with the industry, it is clear that Canada is just the beginning of what we will see with marijuana growth. Hughes states that indoor growers of legal and black-market marijuana consumed 4.1 million megawatt-hours of electricity in 2017. That number is roughly equal to the total amount of electricity generated by the Hoover Dam, according to New Frontier Data. Yes, the Hoover Dam! Though it may be expensive to grow indoors, those who harvest the plant can cultivate year-round. In an industry with constant demand and a growing consumer base, this is extremely important for those who are not located in warm weather climates.

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Photo of Greenhouses filled with marijuana at Pure Sunfarms in Delta, Canada

Since regulation has begun to flow through the United States and to our neighbors above the border, the price of wholsale marijuana has continued to fall. As we begin to develop proven tactics and effective methods of cultivating the plant, I am sure that the trend will tend to continue. I’m also very curious to see what the ultimate price floor for wholesale marijuana will be. As more and more producers come into the market, prices will be undercut and consumers will have less loyalty. At it’s current price, marijuana is still considered a boutique crop, however, as the market grows it will be interesting to see its value change. The following graph from Cannabis Benchmarks is a great visual of the downward sloping price curve that currently characterizes legal marijuana.

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Information from states that have already legalized marijuana in the USA. Source: Cannabis Benchmarks

Let us know your thoughts on the current state of pricing in the cannabis industry!

Article: Future of Legal Marijuana by USA Today

 

Artist Feature: 2 Chainz Launches Gas Cannabis Co.

Following in the footsteps of many fellow artists, Tauheed Epps,  known as 2 Chainz, has decided to launch his own line of cannabis based products. Formerly known as Titty Boi, 2 Chainz has been a staple of the Atlanta music scene for a while now.2 Chainz

Born and raised in College Park, Georgia, 2 Chainz attended North Clayton High School. Tauheed Epps was raised by his mother mainly, as his father was in and out of prison multiple times. Though he was a star basketball player and ranked second in his graduating class, 2 Chainz also dealt marijuana and other drugs. At the age of 15 years old, 2 Chainz was arrested for possession of cocaine, yet he rebounded to make a career out of his talent on the court. Epps attended Alabama State University from 1995 to 1997, yet transferred to Virginia State University after some “complications”, which he is reluctant to speak of.

While in college, Epps formed the hip-hop duo Playaz Circle with Earl Conyers, a friend from high school. Though it took him a while to break into the main stream hip-hop market, it is now undisputed that 2 Chainz has a real influence in the industry. 2 Chainz is currently signed to Def Jam Records, and has 4 successful studio albums and 10 mixtapes in his discography. Since his debut studio album, Based on a T.R.U Story, 2 Chainz has never looked back. Now at age 41, it is clear that the artist has learned how to make money off of what he loves; including cannabis.

On October 29th, 2 Chainz revealed that he is partnering with Green Street Agency to launch Gas Cannabis Company. The name plays off of one of the many nicknames that people have for marijuana. People refer to marijuana as pot, tree, weed, and in this case, gas. The brand carries three different strands of premium weed, which are all named after the different octane levels you can find at your local gas station. The company’s baseline offering is called the 87 line, which is considered, “the most affordable”. The rapper follows up with an 89 Gas line that caters to those who want a “supercharged and powerful” but “smooth ride”. Inevitably, the company offers the highest quality strain under its 93 line. All three strains are available in either pre-rolls or 3.5 oz. packages. Though at the moment they do not offer concentrates or edibles, the official press release indicates that the company plans to do so soon.

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Depiction of the given products that Gas Cannabis Co. will offer initially. Pre-roll’s and 3.5 oz. packages.

Similar to his first studio album that was released, the name of the company also stands for something more than what is indicated on the surface. In his first album, Based on a T.R.U Story, TRU stand for “The Real University”. He takes a page out of his own book with his cannabis company, and revealed that GAS stands for “Good A** S**t”. The rapper and weed connoisseur goes further to say,

“I know quality GAS by the look, the feel, the smoke… GAS stands for one thing, and you’ll know it when you experience it. It’s top-end, but at an affordable price, because I want everyone to be able to understand that GAS is the real fire.” – 2 Chainz, Gas Company Co., 2018

The company is currently housed at the Westside Station dispensary in Van Nuys, CA. Green Street Agency has also partnered with popular artists Rae Sremmurd, The Game, Snoop Dogg, and Waka Flocka Flame to develop other successful strands. The company has capitalized on their ability to connect entertainers to the industry in a way that makes money for both parties. Their mission statement is as follows, Green Street

“We’re a full service creative agency that works exclusively within the marijuana industry. We enable brands to connect with influencers and consumers through non-traditional means to build brand awareness and loyalty.” – Green Street Agency, 2018

Be on the look for other partnerships that Green Street Agency initiates. Already a large player in the industry, I am sure that we will continue to see their name circulate as the industry continues to grow!

Article: 2 Chainz Launches Premium Marijuana Brand

Website: Green Street Agency

 

The Great Experiment

While many states have legalized marijuana as of 2018, well at least medical marijuana use in most cases, Colorado was the first of its kind. The legalization of marijuana use in the state of Colorado is considered one of America’s greatest experiment to date. Though no one knew exactly what was to come from marijuana legalization, it is clear that the state has seen numerous benefits. In 2014 Colorado became the first state where marijuana, often referred to as “pot”, was made recreational. Voting numbers for the so called “Great Experiment” were unprecedented, and natives of the state have seen vast changes since its implementation. The so called “experiment” has been very beneficial for Colorado.

As of 2018, just four years after the legalization of cannabis, Colorado continues to be characterized by record low unemployment rates. As of March of 2018, according to the Bureau of Labor Statistics, Colorado has an unemployment rate of just 3%, while the national average is at 3.9%. In 2017, only three years after it’s legalization, Colorado reached a record-low unemployment rate at 2.6% in May. Multiple factors contribute to Colorado’s low level of unemployment, including the state’s business-friendly policies.

Colorado Chart
The chart from the Bureau of Labor Statistics provides the historical high and low unemployment rates for Colorado

According to Colorado’s governor, John Hickenlooper, Colorado’s very low business tax rate is one of the lowest in the country at 4.6%. Carey Wedler from the Word On Tree, another blog based on the business of cannabis, noted that Colorado’s approach to business taxes has helped create over 60,000 jobs in the clean energy sector, however it is undeniable that the cannabis industry has played a vital role in the states development. Wedler states that in 2016 alone,

“Cannabis generated $1.3 billion in profit, which yielded nearly $200 million in tax revenue that the state is using for various programs, including education, substance abuse and cannabis awareness programs for youth, and even the Attorney General’s office.” – Carey Wedler, Word on Tree, 2017

With over a billion dollars worth of business in one industry, it is inevitable that jobs would follow. In 2015 alone, just a year after the implementation of recreational cannabis, the industry created 18,000 full time jobs. The Washington Post reported that,

“These indirect impacts of marijuana legalization came from increased demand on local goods and services: growers rent warehouse space and purchase sophisticating lighting and irrigation equipment, for instance. Marijuana retailers similarly rely on other companies, like contractors, lawyers and book-keeping services, to conduct their own businesses.”

marijuana-legal-pot-sales-620The trend has not slowed down, as the industry continues to increase on jobs and revenue. In 2016, CBS posted a report that according to the Marijuana Business Daily, Colorado has more than 27,000 occupational licenses, which was up from the nearly 16,000 licenses that were held at the end of 2014. In order to compare the impact of the economy that the legalization of cannabis has versus clean energy, we can look at the number of jobs that were created. In the article on Word of Tree posted by Carey Wedler, clean energy jobs outnumber the amount of cannabis jobs by more than 35,000, the actual speed of job creation is faster with marijuana. According to the Denver Business Journal, the clean energy sector created 1,583 new jobs in 2014. In opposition, the Marijuana Business Daily reported that,

“….  In May of 2014 that less than six months after legalization, the cannabis industry had already generated between 1,000 and 2,000 new jobs — roughly the same number of jobs as clean energy created in the course of the whole year.”

These numbers really speak for themselves and have major implications for the rest of the country. Born and raised in Los Angeles, I have already seen some of these implications manifest themselves first-hand. Business Insider noted that the state of California, which legalized marijuana in November of 2016, could see major economic benefits. In the state capital region alone, there can be an increase of 20,000 potential jobs if it becomes a hub for the industry. Even though it has proven to be an economic bonus for Colorado and states that have followed suit, many remain reluctant to admit it’s impact. Even Governor Hickenlooper of Colorado initially opposed legalization, yet changed his mind once he saw positive results. He believes it is too soon to know what the downsides are of legalized marijuana, but he now remains optimistic. He even notes that the state has not seen a big spike in teenage consumption, or any consumption; it is now just through a regulated process.

Related Links:

Word on Tree : First State to Legalize Weed Has Lowest Unemployment Rate in the Country

Bureau of Labor Statistics: Eight States at Historically Low Unemployment Rates in March 2018

CBS News: Measuring Colorado’s “Great Experiment” With Marijuana

23 Proven Health Benefits Of Marijuana

Along with Washington D.C, 29 states around the country have legalized medical marijuana. According to an article by the Business Insider, the American public is in large support of medical marijuana use. The author of the article states that:

“At least 84% of the public believes the drug should be legal for medical uses, and recreational pot usage is less controversial than ever, with at least 61% of Americans in support.” – Kevin Loria, Business Insider, 2018

Even the National Institute on Drug Abuse lists that there are viable medical uses for cannabis, though some of its advocates often overstate its power. Though there are about 400 or more chemical compounds in marijuana, scientists mainly focus on the two active ones that are believed to have medical implications. According to Loria, the two are cannabidiol (CBD) and tetrahydrocannabinol (THC). The two min components act in different ways though; CBD seems to impact the brain without a high, while its counterpart, THC, has pain relieving properties but is largely responsible for the high. From Loria’s research, I will provide the 23 health benefits:

  1. The best-supported medicinal use of marijuana is as a treatment for chronic pain.
  2. There is strong evidence that medical cannabis can help with muscle spasms.
  3. The actual smoking of marijuana has not been proven to harm lung capacity (unless used in combination with tobacco) and may in fact improve it.

    “Researchers looking for risk factors of heart disease tested the lung function of 5,115 young adults over the course of 20 years. Tobacco smokers lost lung function over time, but pot users actually showed an increase in lung capacity. It’s possible that the increased lung capacity may be due to taking a deep breath while inhaling the drug and not from a therapeutic chemical in the drug.” – Kevin Loria, Business Insider, 2018

  4. It may be of use in treating glaucoma, or it can be possible to derive a drug from marijuana for this specific use. 51f92144ecad04532d00000e-750-563
  5. It can help control epileptic seizures.
  6. It decreases the symptoms of severe seizure disorder known as Dravet’s Syndrome. The article provided an interesting anecdote about this specific use as well:

    “During the research for his documentary “Weed,” Sanjay Gupta interviewed the Figi family, who treated their 5-year-old daughter using a medical marijuana strain high in cannabidiol and low in THC. The Figi family’s daughter, Charlotte, has Dravet Syndrome, which causes seizures and severe developmental delays. According to the film, the drug decreased her seizures from 300 a week to just one every seven days. Forty other children in the state were using the same strain of marijuana to treat their seizures when the film was made — and it seemed to be working.” – Kevin Loria, Business Insider, 2018

  7. A chemical found in marijuana stops cancer from spreading, at least in cell cultures.
  8. It can decrease anxiety in low doses.
  9. THC can slow the progression of Alzheimer’s disease. This is of particular relevance to me, due to the fact that I lost my grandfather to Alzheimer’s earlier this year. There is no cure to Alzheimer’s, but if I would have known about some of marijuana’s healing ability for it, it definitely would have been explored as an option.

    The 2006 study, published in the journal Molecular Pharmaceutics, found that THC slows the formation of amyloid plaques by blocking the enzyme in the brain that makes them. These plaques kill brain cells and are associated with Alzheimer’s. A synthetic mixture of CBD and THC seems to preserve memory in a mouse model of Alzheimer’s disease. Another study suggested that a THC-bases prescription drug called dronabinol was able to reduce behavioral disturbances in dementia patients.” – Kevin Loria, Business Insider, 2018

  10. Marijuana eases the pain of multiple sclerosis.
  11. It seems to lessen the side effects from treating Hepatitis C and increase treatment effectiveness.

    “… A 2006 study in the European Journal of Gastroenterology and Hepatology found that 86% of patients using marijuana successfully completed their Hep C therapy. Only 29% of non-smokers completed their treatment, possibly because the marijuana helps lessen the treatment’s side effects.” – Kevin Loria, Business Insider, 2018

  12. It has been proven to help with inflammatory bowel diseases.
  13. It relieves arthritis discomfort for many.
  14. Marijuana users tend to be less obese and have a better response to eating sugar.
  15. Though it isn’t a medical or health benefit, marijuana could spur creativity.

    “Contrary to stoner stereotypes, marijuana usage has actually been shown to have some positive mental effects, particularly in terms of increasing creativity, at least in some contexts. Even though people’s short-term memories tend to function worse when they’re high, they actually get better at tests requiring them to come up with new ideas.” – Kevin Loria, Business Insider, 2018

  16. Cannabis soothes tremors for people with Parkinson’s disease.
  17. Marijuana can help veterans suffering from PTSD.
  18. Studies on animals suggest that marijuana can protect the brain after a stroke.
  19. Particularly related to sports, marijuana can protect the brain from concussions and trauma.533c206f69bedd2a3a0a1aab-750-493
  20. Though this one can’t necessarily be proven, marijuana use can help eliminate nightmares.
  21. Cannabis reduces some of the pain and nausea from chemotherapy and stimulates appetite.
  22. Marijuana can help people who are suffering from alcoholism, which has proven to damage the liver and cause aggressive behaviors.

    “Research published in the Harm Reduction Journal found that some people use marijuana as a less harmful substitute for alcohol, prescription drugs, and other illegal drugs. Some of the most common reasons patients make that substitution are that marijuana has less negative side effects and is less likely to cause withdrawal problems.” – Kevin Loria, Business Insider, 2018

  23. Medical marijuana legalization seems to reduce opioid overdose deaths.

Article: 23 Health Benefits of Marijuana