420 News Archives - Page 33 of 41 - The Real Dirt with Chip Baker

Hemp Industry Win: Farmers Might Finally Get Bank Access

by Travis C | Dec 5, 2019 | 420, 420 News, Blog, Business, Cannabis Law, Hemp, Hemp Law

Banking has been an issue for cannabis and hemp businesses alike due to federal banking restrictions for years. But for hemp, that all could be changing very soon.

It’s safe to say that the hemp industry and cannabis industry don’t have the best relationships with banks. Because most banks are federal institutions, they have to follow federal law. This is why despite cannabis being legal in multiple state, businesses have a lot of difficulty finding a bank that will work with them.

While this will remain the case for the cannabis industry unless the SAFE Banking Act passes, the legal hemp industry has achieved another milestone in regards to banking for legal hemp businesses.

Hemp Industry Banking

Currently, the banks that actually work with legal hemp businesses could be counted on one hand. Due to strict requirements that come with loads of paperwork, most banks just avoid hemp businesses all together. But that is all about to change.

Federal and state bank regulators announced Tuesday that they were scrapping a burdensome requirement that banks said kept them away from the hemp business. With the requirement scrapped, banks no longer have to treat their hemp customers as suspicious and file reams of paperwork to anti-money-laundering authorities for each interaction.

In other words, with less paper work and red tape surrounding the legal hemp industry, banks are about to feel a lot safer about working with hemp businesses. And it’s not like the demand isn’t there either.

In November of 2019, the American Banking Association surveyed 1,800 agriculture-focused banks in the country and found that almost half had gotten questions from their farmer-customers about whether they would still do business with them if they started growing hemp.

Hopping on a moving train

Banks have been sitting on the sidelines of the legal hemp industry and legal cannabis industry for a while now, and the industry has progressed just fine without the financial institutions up to this point. Even though banks have been slow to embrace the cannabis industry, investors have been geared up to profit from it.

Analysts tracking publicly traded companies have added pot producers to their portfolios, in order to help investors decide where best to maximize their exposure to the industry. Ultra-rich venture capitalists have begun to treat pot businesses like tech start-ups. While some stocks have had their hiccups, the industry is looking strong and projected to continue growing through 2020 and beyond.

While banks have been slow to get onboard the legal hemp industry train, hemp businesses will likely be happy to work with them now that the requirements have been lessened. Even though hemp flower producers may still find it difficult having a product so similar to federally illegal cannabis, other businesses in hemp clothing and manufacturing should start finding it much easier to find a bank that will work with them.

Is cannabis banking next?

The hemp industry is making strides on strides in terms of legalization and banking access, whereas legal cannabis industries have been inching along slowly year over year. Progress has been exponential since Colorado first legalized in 2012, with multiple states following suit in the years after. But with federal law remaining the same regarding cannabis, progress has been slow with legal cannabis businesses still lacking banking access, despite state law.

The SAFE Banking Act is currently the best hope legal cannabis businesses have to achieve banking access in the near future. While the bill has already passed through the House of Representatives with large support from the banking industry. However not many are hopeful of the bill surviving the republican controlled senate headed by Mitch McConnell.

The irony of the whole situation is that McConnell is largely responsible for the passing of the 2018 Farm Bill the federally legalized hemp across the country, yet he will also be the reason that legal cannabis businesses may not get the access to banks they desperately need. Only time will tell, and for, all the wires are silent.

First Year of Industrial Hemp: Is it Booming or Bust?

by Travis C | Nov 27, 2019 | 420, 420 News, Blog, Business, Hemp

Millions of pounds harvested. Tons of CBD extracted. But the market might not be ready for so much industrial hemp.

There was no shortage of farmers ready to make the switch to industrial hemp after the Farm Bill passed at the end of 2018. Many were looking for a new cash crop that they could get in on to make some real money.

The beginning of 2019 and outdoor grow season was an exciting time for just about everybody involved. More states passed legislation over time establishing their own ground rules for industrial hemp, and farmers licensed up, cleared out their land and made the transition.

The Industrial Hemp Boom

The mass migration of farmers and traditional cannabis cultivators to industrial hemp led to a massive increase in production. Everything from hemp seeds and hemp flower to CBD extracts and the plant’s fibers were all the sudden in extremely high demand. So much so that just about every dispensary, smoke shop and even gas stations started selling CBD products on their shelves.

Sales exploded with more and more articles vouching for the medicinal benefits of CBD and the potential financial gains the industrial hemp industry could provide the country. On top of the media exposure, plenty of celebrities hopped on the CBD band wagon, with actors and athletes alike sponsoring and being sponsored by CBD companies, and some even creating their own.

CBD is the first real aspect of cannabis to break into the mainstream, and even be celebrated on a massive scale. Recreational cannabis pales in comparison to the international attention CBD has received just in the last 12 months. But with any new industry that takes off sprinting from the gate, there are going to be some trip-ups.

The Industrial Hemp Bust

While industrial hemp production was regulated on the state level, there is very little regulation in the way of CBD production, and barriers to entry were (and still are) extremely low. The lack of regulation allowed a lot of untrustworthy and potentially dangerous products out into the market. While the producers of these products made a pretty penny, the consumers soon started to learn of the risks of bad CBD products.

A lot of shady CBD manufacturers got in, sold their bad product made from poorly grown “biomass” and got out with their money. There was an industrial hemp seed deal in which the buyer was promised feminized seeds but received more than half male seeds, resulting in a multi-million dollar law suit.

As the hemp harvest season came to a close, a lot of farmers were hit with a massive reality check; too many people are growing hemp. Farmers brought their hemp to auction, some hauling thousands of pounds hundreds of miles in the hopes of getting a big chunk of change in return. Almost every single farmer at the auction left without a sale.

The overflow of product, both in biomass and CBD extract has led to a crash in the price as supply for outweighs demand. While the consumer may benefit from lower prices, many farmers who were hoping the industrial hemp would be the answer to their financial problems are starting to second guess their decision.

What Does 2020 Hold for Hemp?

The industrial hemp industry is due to have some fat trimmed. A lot of farmers are going to ditch hemp after an unsuccessful harvest and go back to their traditional row crops. As consumers learn about unreliable CBD products, the shady companies will drop off, and very few might step up and raise their standards.

Farmers with the right connections that were able to secure deals ahead of harvest made a lot of money this year, and it’s only going to increase in 2020. Hemp genetics and seed breeding is going to become more of a desired job title, and more cannabis breeders will begin adding hemp to their repertoire.

Overall, while many did not have a successful year with legal hemp, just as many did. Industrial hemp will keep expanding into different forays of the plant’s abilities, like using its fibers to create concrete, clothing, paper and more. While some states have made a push against it, smokable hemp flower is also getting bigger as people look for a cannabis alternative that still provides medicinal benefits without the THC high.

Frankly, the possibilities of hemp, just like cannabis, are nearly endless. We can only look forward in excitement and enjoy the ride!

Illinois Cannabis is Legal? Why You Probably didn’t Hear about It

by Travis C | Nov 12, 2019 | 420, 420 News, Blog, Business, Cannabis Law, Culture

A major issue in the cannabis legalization movement is that every state can do it differently. Illinois cannabis legalization definitely did it different, and not for the better.

A lot of states that legalize cannabis add something new to their industry. Whether that’s limiting licensing because Oregon didn’t, or lowering regulations like Oklahoma did because California’s are so strict. Illinois is no different.

In June, Illinois became the first state in history to legalize the recreational possession and sale of cannabis entirely through the legislative process, whereas every other state has legalized through state-wide ballots. They also took a huge step in expunging the criminal records of nearly 800,000 residents in the state who possessed or purchased up to 30 grams of cannabis and were prosecuted.

With the state set to begin adult recreational sales in January 2020, all seems well and good. That is until you look a little closer at the legislation.

The Illinois Cannabis Crunch

Some states choose to be very lax with their regulations, like Oklahoma or Oregon. Both states have booming cannabis economies with Oklahoma’s in particular taking off faster than any other medical industry in the country. But both states are also facing serious over-supply issues.

Oregon has already taken the brunt of the surge, with so much more cannabis in the state than its residents consume that they had to pass a law permitting cross-border sales of cannabis to try to get rid of the excess. Oklahoma is following a similar path, with over 4,000 licensed growers and only 1,400 dispensaries for a state that is highly interested in cannabis. On top of that, there is roughly one dispensary for every 70 Oklahomans, which is not ideal for continued business traffic.

To avoid making the same mistakes, Illinois put a cap on how many dispensaries are allowed to open in order avoid cities filling up with pot shops too quickly. However at the end of 2019, the state only has 113 permitted dispensaries for recreational sales. Remember how Oklahoma had a dispensary for every 70 people? Illinois hardly has one for every 100,000.

An Attempt to Keep Big Business Out

It’s fair to say that Illinois’ cannabis legalization intentions were pure enough. The purpose of the dispensary cap is to prevent chains from taking over. The legislation limits chains to no more than 10 locations in the state, and limits the entire state to only 500 dispensaries, total.

That may sound like a lot of dispensaries, but 500 dispensaries is just enough for every 200 people to have a shop to visit. Additionally, the state won’t be adding any new dispensary licenses until May 2020, leaving four months of extremely limited supply. Even then, the state is only issuing 75 more licenses, leaving less than 200 dispensaries by the end of May at the earliest.

Also being a more conservative state, it is expected that a good bit of Oklahoma jurisdictions will ban retail dispensaries altogether, and a lot of people are concerned that the efforts to keep big business out will result in even more solicitation of private market cannabis.

A Slow and Steady Approach

Recreational cannabis sales are set to begin in less than 2 months in Illinois. With a little more 100 dispensaries to serve the entire state on January 1, it’s going be very difficult to get everyone taken care of for some time. But the Illinois cannabis industry doesn’t appear to be in a rush.

To put it all in perspective, by the end of 2020 Illinois is only projected to have about one tenth of the amount of dispensaries as Oregon has, with the maximum allowance of the legislation only being equivalent to one quarter of the Oregon cannabis industry when the Illinois cannabis industry is fully up and running in what will most likely be a few years.

This might not be a bad thing for Illinois though. Being a more conservative state outside of Chicago, demand for cannabis likely won’t be as high as other states that have legalized. Also with homegrowing allowed under the new law, residents that can’t find a nearby dispensary will either not participate in the industry, or start growing their own.

While the latter could lead to a rise in private market distribution, it isn’t very likely due to what most are projecting will be low demand outside major metropolitan areas, where dispensaries are most concentrated. This is why the industry hasn’t sparked a lot of interest nationally. A lot of people aren’t expecting any big developments for at least two years, and even then the Illinois cannabis industry will still be a small player compared to other states that have legalized cannabis.

Illinois cannabis legalization is a great thing for the state and the country. They may be moving more slowly than other states, but they may also just be more cautious and hoping to avoid the mistakes made by Oregon or California. Unfortunately it’s much too soon to say how the Illinois industry will perform, but usually where there is legal weed, there is prosperity.

The Vape Pen Controversy Explained

by Travis C | Oct 15, 2019 | 420, 420 Culture & Travel, 420 News, Blog, Broscience Mythbusters, Culture, Stranger Than Fiction

If you’ve watched the news over the past month, you probably think vaping can now kill you.

In today’s sensationalist news cycle, it has become the standard to over-exaggerate. Whether it’s about politics or a major health crisis, the media will always drive a narrative that gets people more worried, and gets them more views.

So it’s no surprise that when people started getting sick from vape pens the media would jump all over it.

The Vape Pen Controversy

It all started in September. A news story broke about someone getting some type of lung-related illness from a vape pen. At first, that was all. But then the story broke. The vape pen they were using had THC in it.

Cue the media leaping into hysteria, claiming that THC vape pens are making people sick. And if you watched the news around this time, there was a clear implication that it wasn’t something else in the pens causing harm, it was the THC. But that didn’t stop other outlets from claiming it wasn’t just THC vape pens to blame, but all vape pens.

Law commercials advocating law suits against Juul started to appear, and talks of a federal vaping ban ensued. Suffice to say, the media — and in turn the country — lost their collective shit.

The Truth

Of course all of the drama and freak out over vape pen related illnesses was based on half truths. Yes, people were in fact getting sick, and even dying, from THC vape pens. But there’s one thing that every single news story in the mainstream media failed to mention. Legality.

Out of over 400 cases of reported lung-related illnesses caused by vape pens, about 99% of them were caused by illicit vape pens. In other words, people purchased vape pen cartridges on the illicit market, and got sick. Why? Because of cutting agents.

Specifically, cartridge producers on the illicit market used vitamin E as a cutting agent. That doesn’t sound like a big deal right? We need vitamin E to stay healthy, you can eat it, you can put it in ointments, so why not a vape?

Well, it turns out that when you vaporize vitamin E, it converts to vitamin E acetate, a solid, viscous state. So these unknowing consumers would hit their pen, the vitamin E would convert to vitamin E acetate, and the residue would attach to the inside of their lungs. That causes some serious respiratory issues, and in a few cases, death.

Harmful Misinformation

There are already plenty of conspiracy theorists out there claiming big tobacco is the culprit for the major media focus on THC vape pens causing the problem. This would be an attempt to take down the vape pen industry that is the largest competitor to cigarettes. Others thought it was lobbying groups pushing to reverse the efforts of cannabis legalization.

But in all of the confusion, half-assed reporting and straight up false information, the people who really get hurt are the consumers. Not just those that are actually getting hurt by illicit vape pens because they don’t have access to safe, legal cannabis. But also your everyday cannabis consumer, and your medical user especially.

There are patients who don’t like to smoke, and choose to vape their medicine. With the rising concern surrounding vape pens, some dispensaries (and even entire states) have taken vape pens off of their shelves to make sure they are safe. Which is all well and good until the people who really need them can’t access them.

High Times Cannabis Cup or Fyre Fest 2.0?

by Travis C | Aug 27, 2019 | 420, 420 Culture & Travel, 420 News, Blog, Growing

It was the first high Times Cup in Oklahoma, and very likely the last.

The hype before the event wasn’t any bigger than past cannabis cups. Just your average instagram posts from local dispensaries and brands that were going to attend, telling customers and attendees to stop by their booth.

But what people anticipated, and what actually happened at the High Times Cannabis Cup in Oklahoma are two very different things. And not for the better.

The Background

High Times has always had a somewhat iffy reputation among the cannabis community, mainly for the company’s poor event planning year after year. Due to the nature of the event, hosting a cannabis cup in a medical only state can cause some problems on its own. Oklahoma happens to be a medical only state.

But that’s not all.

Oklahoma also has the most progressive and fastest growing medical cannabis industry in the country. The state’s medical laws allowed, and even encouraged, outside growers, processors and retailers to bring their experience and knowledge to the new state industry. And boy did they.

As it stands now, there are over 130,000 registered patients in Oklahoma, with over 1,300 dispensaries to service them. Oklahoma is the fastest-growing medical marijuana market in the average number of daily patient increases, and MMJ patients represent 4.1% of the state’s total population – one of the highest rates in the nation. Growth is bolstered by low barriers of entry, including the fact there’s no list of qualifying conditions for patients.

Unprepared, overwhelmed, and even dangerous

To say that the venue was under prepared for the first day of the Cannabis Cup would be a massive understatement. With a huge portion of attendees coming from out of state, and just as many in-state patients, Real Dirt sources on the ground estimated around 40,000 people in attendance.

Other than the fact that it was probably the largest cannabis cup attendance in history, it was also the largest shit show. VIP entrance began at noon, with hundreds of people waiting well past 2 PM to get in “early”. General admission began at 1 PM, which only added to the chaos. Thousands of people showed up at once, making parking a nightmare.

A photo from the line at the Cannabis Cup in Oklahoma, about 1/4 mile from the entrance. Photo by @OKCannaCo on Twitter.

After the parking lots filled up in the first hour, attendees began parking down the street, some well over a mile from the venue. On top of that there were insanely long lines, stretching over half a mile around the outside of the venue, through the parking lot and beyond. Keep in mind this is in 80+ degree weather with extremely high humidity.

With excessive wait times, high heat and no water, people became very unhappy, very quickly, with plenty of evidence on Twitter.

One person eventually got into the event, only to find that there was hardly enough food or water for everybody:

oklahoma cannabis cup problems

Others spent all day just waiting in line:

oklahoma cannabis cup 2019

But for a lot of people, the Oklahoma Cannabis Cup was reminiscent of the extremely hyped up, and extremely unsuccessful Fyre Festival:

high times cannabis cup in oklahoma was another fyre festival

While the High Times Cannabis Cup in Oklahoma may have been a huge success for the organizers and vendors that were able to make it, there were still hundreds if not thousands of people who paid for tickets and never even got into the venue. For those that got in however, the event was a blast and a great way to connect the local and national cannabis community in Oklahoma.

Day 2 of the Cup was inevitably less crowded due to many just avoiding it all together to save the hassle of another long day in line, and so it raises the question, will High Times be back to Oklahoma?

Probably. They vastly underestimated the Oklahoma cannabis community and the interest in cannabis in the state. If they High Times wants to return to Oklahoma, they will need to make some serious changes to the venue, entrance protocols and a lot more. If they do have another cup in Oklahoma, you can bet The Real Dirt will at least try to get in.

Are Big Cannabis Stocks Losing Steam?

by Travis C | Aug 20, 2019 | 420, 420 News, Business

As the cannabis industry expands, so do cannabis IPOs.

In other words, as more and more states legalize cannabis, the opportunity to become a publicly traded cannabis company has become enticing to many in the industry. But restrictions are fierce.

Due to federal law in the United States, no plant-touching cannabis business — regardless of its operation in a legal state — can list their business in American stock markets. Which is why Canadian cannabis stocks have become the focus of any would-be cannabis investor.

Canadian Cannabis Stocks

Being the first first-world country to fully legalize the sale and consumption of cannabis, Canada is on the forefront of managing a nationwide industry. And with a 100% legal industry, Canadian cannabis companies are free to go public. This has led to some big companies all but taking over the entire marketshare of cannabis.

The three main competitors in Canada currently are Canopy, Aurora and Tilray. Over the last year, these companies went public with a bang, building up shares and raking in the investment dollars. But after the IPO, there has been a consistent decline in stock value for all of these companies.

While Tilray made close to $46 million in this quarter ended June 30, they still posted a loss of $32.9 million. The second place contender, Aurora is still holding strong with no reports of major losses that would impact shareholders. However Canopy, the largest marketshare holder in Canada’s industry isn’t showing great gains.

While none of these major stocks are in danger of bottoming out any time soon, the recent projections that show profitability is still some time away have some investors considering other options. This is leading to a rising interest in smaller cannabis stocks in Canada and the US.

Smaller Cannabis Stocks Rising Up

No “small” business is going to be listed on the stock exchange, which means even the smaller cannabis stocks we talk about here are still going to be relatively large businesses. It is also important to keep in mind that as big as Canada is in size, it’s legal cannabis industry is relatively small compared to the U.S.

For example, while Colorado has an average of one cannabis dispensary to every 10,000 people, Ontario has one store for every 600,000 people, and Quebec only has one store for ever 500,000. That’s a lot of people for one location to service, which means that demand is high for quality products from whoever is selling it.

While Canopy made a lot of money in the topical, oils, and edibles market, they failed to account for the demand for high-THC products, including cannabis flower. Now they are changing their strains and upping their THC content, but until that happens, smaller companies can come in and get the deals.

Companies like Supreme Cannabis Co., MediPharm Labs Corp. and Pure Sunfarms Corp. all posted positive gains and earnings this quarter. Pure Sunfarms Corp. even reported a net income of $37.2 million Canadian, which is the largest net income reported to date in the Canadian market.

What’s next for cannabis stocks

There are people who are paid a lot more money than me to determine the future of cannabis stocks, so I won’t even try to guess. What I can say though, is that Canadian cannabis stocks aren’t going to be the only option in the near future.

While plant-touching businesses cannot be listed on the NYSE or NASDAQ, ancillary businesses are all fair game in the United States. This opens the door for companies that design the containers that cannabis is sold in, paraphernalia manufacturers, and other businesses that supply equipment, legal services and more to the legal cannabis industries around the country.

Whether or not companies in these fields will list themselves is up to them, just as deciding whether or not to invest in them is up to you. But The Real Dirt will do its best to keep you updated on exciting stocks and news that you should know about the industry.