Business Archives - Page 27 of 34 - The Real Dirt with Chip Baker

Weed Money: Capitalism and Cannabis

by Travis C | Oct 31, 2019 | 420, Blog, Business, Culture

Cannabis grew to the behemoth it is today only by the pursuits of those willing to risk their lives.

This makes it no surprise that as the industry grows and more regulation and legislation is introduced, a lot of older cannabis industry and community members aren’t too happy. But there’s a harsh reality that we all need to face if this industry is going to grow into a federally regulated industry.

America is capitalist. It’s a free market.

Follow the weed money

The cannabis industry was partially built on advocacy, but also greed and capitalistic intent. If growers in California didn’t push themselves to grow more and more, bigger and better cannabis every year to make more money and beat the competition, we wouldn’t have the massive variety of strains and cultivars.

And you can bet your ass that some people have gotten rich as hell off cannabis, with more and more rich getting involved like celebrities, bringing more money and investment into the industry.

When the medical industry first began in Colorado, it was a small community with mom and pop dispensaries. But as recreational came into the state, so did bigger investments, resulting in dispensary chains that knocked plenty of small dispensaries out of business. It’s clear why small business doesn’t like big business, and the cannabis industry was built on small businesses, husband and wife operations, small groups of friends building something together.

But that is all changing, and it’s changing fast.

Capitalism comes for cannabis

States like Colorado and California have had several years to develop their medical and recreational cannabis industries. This means that both states are also filled with highly experienced cannabis industry entrepreneurs, ready to expand.

When a state like Oklahoma legalizes medical cannabis in 2018 with legislation that actively encourages out of state entrepreneurs to get involved, people are going to hop on the opportunity. And in Oklahoma, they definitely did.

Growers, processors, dispensary owners all flocked to Oklahoma to rent their home for 30 days in order to gain residency thanks to Oklahoma’s welcoming cannabis regulations. After they got residency, it was easy to apply and get started in the medical cannabis industry in the state. After August 2019, if you want to move to Oklahoma and start a business, you must live there for two full years before you can get residency now. In other words, if you didn’t get in before August, you’ll be two years behind.

This made a lot of industry entrepreneurs happy, but pissed off a lot of Oklahoma locals hoping to have their own local industry that now have to share it with Californians, Coloradans, Oregonians and others that left their saturated markets to start fresh in Oklahoma.

It’s a double edged sword

Capitalism has always been a double edged sword in America, which is probably why there’s so much debate around whether or not we need a new system. It promotes innovation and progress at the cost of leaving behind those that can’t compete.

Those that were once competitors that had to shut down or move shop because someone bigger or better came in, that sucks. But welcome to America. That’s capitalism, and that is what happens when capitalism and cannabis intersect.

The reality is that with a nation-wide legal cannabis industry that we want to someday achieve (even though there are plenty who don’t want that), big business is going to inevitably get involved, and small businesses will be pushed out if they can’t evolve, adapt and compete. Get an insider’s perspective on capitalism in cannabis from two long time cannabis advocates and growers, Chip Baker and Jeff from Little Hill Cultivators on The Real Dirt Podcast!

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.

What is Green Greed?

by Chip Baker | Jun 29, 2019 | 420, Blog, Broscience Mythbusters, Business, Culture

Green greed! It has plagued the cannabis industry for years. But today it doesn’t mean what it used to.

In our current legal cannabis industry, I have run across so many contractors and vendors that attempt to charge cannabis people more money than their “normal “clients. Maybe this is because they were overcharged for a not-so-great sack years ago. Maybe they’re just greedy.

I’ve been quoted $6,000 for a $1,000 job. I’ve been quoted $3,800 for a $900 job. Now, the joke is on both of those assholes because they didn’t get my money. But for someone not as skilled as me in construction and operating a business, you might get taken advantage of by some dubious contractors.

Here are signs that you might be dealing with a green greedy asshole.

Signs of Green Greed

1. If you tell a contractor you’re in the cannabis business and they clap their hands and say, “You guys must make really good money”…

2. Or they put on a greedy smile and say, “This is going to be expensive, but you can afford it”…

3. They tell you that working with cannabis businesses is too risky, and that they have to charge more to account for the risk.

The reality is that these people are probably all just jealous. We all choose our own lines of work, and they chose theirs. Remember, we’ll only work with them if we get fair rates and quality work.

Countering Green Greed

If you are in the cannabis industry and you get the slightest psychic vibe that you’re getting a high quote from a contractor, immediately tell them, “No, that’s too much, I can’t afford that.“

Immediately asked them for a discount when they give you their quote. Upon meeting these contractors, call out other green greed that you have already had to deal with to show them you won’t be tricked into overpaying. Demand that you get the best price and the best service.

The cannabis industry makes a lot of money, but the people who try to take advantage from the outside don’t know where all that money actually goes. Operating costs, testing, licensing. There isn’t that much left over. Make that clear too.

It started as growers in the private market’s green greed driving up prices in tough times. Now that it’s legal, everybody can try and take a cut. Which is why it’s so important to be mindful as a cannabis business owner.

Next time you’re talking to a contractor and you hear a number that sounds a little high, don’t be afraid to call it out. As long as people get away with taking advantage of new cannabis businesses, they’ll keep taking advantage. Be cautious, be mindful and always get a second quote.

Is New York Next to Legalize Cannabis?

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

New support from New York’s Farm Bureau could be the final push the state needs to legalize cannabis. But will it be enough?

The New York Farm Bureau issued a memo Monday backing a bill that would legalize, tax and regulate marijuana in New York, which lawmakers are considering before they end their annual session June 19. And farmers have a lot to gain if this bill passes and New York decides to legalize cannabis.

This bill specifically includes measures meant to ensure struggling farmers in New York’s poorer counties get a chance to break in to the marijuana and hemp industries. While the farming industry in New York isn’t in any risk of shutting down any time soon, getting preferential treatment should the state legalize cannabis would mean big money for the industry.

What’s in the New York Bill to Legalize Cannabis

The bill, should it pass, would create a new Office of Cannabis Management to oversee the recreational and medicinal marijuana industries, as well as the hemp industry.

Only those above the age of 21 would be able to legally purchase marijuana, and local governments would have the ability to hold a public referendum to block legal sales within their borders. This has happened in states like Massachusetts, where local governments kept cannabis illegal despite the state’s decision to legalize cannabis for adult us.

The bill overall is relatively standard for states that legalized in the past. Adult use, cultivation and sale will be permitted, but until the bill passes, there won’t be an Office of Cannabis Management to begin working on the details.

Farmers Might Not Be Enough

While the Farmers Bureau represents over a thousand farms in New York state, the only votes that matter in this case are those of the Democrats in New York. 30 Democrats have gotten on board with the bill, but 32 are needed to pass without any Republican support.

However the Democrats are confident that the bill will at least have enough votes to pass the lower chamber, and Governor Cuomo of New York has pledged to sign the bill if it gets to his desk.

New York has the third largest population of any state in the country, an a legal cannabis market would bring in massive amounts of revenue to the state. While California has had a slew of problems since they legalized cannabis due to the surplus of private market growers and illegal dispensaries, New York wouldn’t have the same problem.

If done right, New York could potentially become the new cannabis hub of the world. But that is a big IF.

Should New York legalize, there’s going to be a bunch more farmers planting clones outside for the very first time. Luckily The Real Dirt has that covered.

CBD Laws Could Be Changing

by Travis C | May 31, 2019 | 420, 420 News, Blog, Business, Culture, Hemp

CBD has gotten too big for the FDA not to intervene. The question now is what are they going to decide?

Contrary to the hundreds of CBD products you can buy online and at your local health store that would suggest otherwise, CBD isn’t technically legal. However it isn’t technically illegal either. And that’s why there’s a problem.

CBD is a naturally occurring cannabinoid in the cannabis plant. A relative of the cannabis plant that was just legalized, hemp, also contains CBD. With hemp legal, people saw no problem in breeding hemp specifically for CBD to make products.

However, CBD was not included in the legislation that legalized hemp, and because it is also found in psychoactive cannabis cultivars, there’s some controversy over whether or not it should be legal. Now almost 6 months after legalization, the FDA is finally getting involved.

FDA CBD Laws

With economists predicting that the CBD industry could reach a market worth of $16 Billion by 2025, the FDA has no choice but to make a regulation decision. Compared to other non-FDA approved products, CBD is already much more well known and popular, and even dangerous, should the FDA decide so. Which is why their decision is so important.

During a hearing at the end of May, the FDA will be presented with remarks from manufacturers, consumers, health professionals, academics, and more on scientific data and information about CBD products that contain cannabis or cannabis-derived compounds, such as CBD.

Because of the wide range of uses for CBD, from foods and face creams to pills and oils, the FDA needs to regulate CBD more strictly compared to other ingredients that may just be used in one specific product. With now CBD laws specifically on the books, more and more pressure is being placed on the FDA to regulate.

Potential Outcomes

There are a lot of way the FDA could decide to regulate CBD laws. In the worst case scenario, they could ban CBD altogether. This is pretty unlikely, as the now ex-Commisioner of the FDA had stated in February of 2019 that the FDA would take a more “flexible” approach to CBD regulation.

What seems more likely, is the FDA regulating CBD to only be allowed to be extracted from legal, industrial hemp, while banning CBD extraction from cannabis, i.e. any other cannabis plant with a THC level over .3%. They could also permit CBD extraction from any cannabis plant as long as there is no THC included.

All we can do for now is speculate while the hearing takes place, but many CBD business owners and entrepreneurs will be anxiously awaiting the results.

The Future of the CBD Industry

It’s probably safe to say at this point that if the FDA did decide to ban CBD altogether, there would be massive, nationwide outrage. From the parents who use CBD as medicine for children with epilepsy, to the avoid CBD consumers who have made the cannabinoid an essential element of their daily nutrient routine.

While obviously the former would be most negatively affected by a full CBD ban, it would be the masses who consume CBD recreationally that would have the biggest voice in the matter. And with so many hopping on board the CBD bandwagon, we can assume CBD isn’t going anywhere.

Hempcrete: The Billion Dollar Building Material

by Travis C | May 10, 2019 | Blog, Broscience Mythbusters, Business, Hemp, Science & Technology

It could revolutionize home building and construction. If only people could get past the fact that it’s made from hemp.

Hemp is a nuisance. It has this way of growing into a wide variety of uses, from clothing, to paper, to medicine and yes, building materials. Suffice to say, the million-dollar corporations that run the paper industry, the textile industry and others aren’t a fan.

Some would even argue that it is hemp’s fault that cannabis ever became illegal in the first place, because it was stepping on the toes of the cotton and paper industries in the early 1900s. But nevertheless, we’ve entered a new age of hemp legalization, and the opportunities are vast.

While there is a very heavy focus in the hemp industry on CBD products, and hemp biomass for extracting that CBD, another hemp-derived product has been gaining traction. Hempcrete has been a word seldom tossed around among construction and home building circles since the mid-2000s, but it’s finally getting a little bit of the limelight (surprisingly, pun unintended).

What is Hempcrete?

What do you get when you add hemp and concrete together? Hempcrete. It isn’t quite that simple of course, as it’s not really concrete at all. It’s actually hemp and lime mixed together, and that’s really about it.

Hempcrete is made of the inner woody core of the hemp plant and a lime-based binder. It is the hemp’s higher silica value that allows it to bind well with lime. This creates a strong, lightweight product that has been used an effective and durable building material for centuries.

What makes hempcrete unique isn’t merely the fact that it contains hemp, but its potential applications in construction.

Hempcrete Applications

While there are hempcrete buildings dating back to the 6th Century that are still standing today, more modern usage has seen hempcrete utilized as insulation. Due to its light weight, it is not a standalone building material, and must be assisted with wooden beams or other types of support.

Modern day building materials are either mined from the earth or harvested from centuries old forests. Hemp can be harvested annually in perpetuity. One acre of hemp provides as much paper as 4.1 acres of trees. Considering trees take decades to grow and hemp takes about 4 months in comparison, the advantages are obvious.

Some companies have developed hempcrete bricks that account for its light weight and help it to stand on its own without added support, which is going to advance the applications of hempcrete as a building material even more.

Why Does Hempcrete Matter?

If you haven’t noticed as of late, housing isn’t getting any cheaper. This is in part due to the fact that construction costs are also increasing. Concrete needs to be made from scratch with a variety of raw materials that can become difficult to source, especially with so much demand for concrete.

With Hempcrete however, just the pure scale of its applications and potential replacements of other materials in construction will make a huge difference in the future of the housing market. Just think about the costs (and potential health risks) of insulation and how Hempcrete can completely revolutionize how we keep our homes insulated.

The passing of the Farm Bill at the end of 2018 has opened up the national hemp industry across the U.S. with untapped potential in Hempcrete. While many businesses are focused on the hemp plant or its derivatives like CBD, not too many people are capitalizing on the plant’s material applications.

There’s a lot of money to be made in the legal hemp industry, if you start working now. If you want a less saturated competitive space with the potential for widespread expansion, Hempcrete and other hemp materials could be your new avenue.

Learn more about the many applications hemp can have in a new legal industry on The Real Dirt Podcast.

Check out some of our Hempisodes here.