Cannabis Extract Sales Soaring in Colorado

Cannabis Extract Sales Soaring in Colorado

Cannabis concentrates or marijuana extracts, are without question the new frontier of cannabis consumption. According to recent reports, the demand for concentrates in Colorado was up by nearly 125% for the first quarter of 2016 over the previous year.

Whats the deal with cannabis extracts?

The demand for cannabis extracts, also known as concentrates has sparked a wave of innovation and scientific advancement in extraction technology, and has resulted in a significant portion of the overall cannabis market sales. Cannabis extracts can be used in cooking and tinctures, but are primarily consumed by dabbing. Dabbing involves the vaporization of THC-rich cannabis oil, typically extracted from the trimmings of the cannabis plant. Extraction techniques involve the injection of high pressured gas, through cannabis trim, resulting in a concentrated oil, wax, or hard shatter.

Cannabis extract sales TerpX

While flower sales will always be popular, their growth pales in comparison to that of cannabis extracts who went from just under $27 million in early 2015 to over $60 million by the end of the first quarter of 2016. That sort of increase in market share undoubtedly caught the attention of would-be cannabis investors looking for the next big thing in the marijuana business.

Anyone familiar with extracts and dabbing knows about TerpX, the Colorado based concentrate company. Jordan Psigoda has taken his connoisseur concentrate brand TerpX to the High Times Cannabis Cup and come home with no less than five awards. Their Lemon Amnesia Shatter, Kosher OG, and San Lorenzo Valley OG have all made waves in the world of high end dabbing. But what goes into the best of the best of concentrates? According to Jordan, its all about terp profiles.

Why are cannabis extracts all the rage?

So why the cannabis extracts blowing up right now? Here’s the deal. Terpenes are the invisible hand behind the THC and cannabinoids that marijuana is usually known for. Terpenes are responsible for the incredible aromas, and scents we taste as we inhale our favorite strains. The various extraction processes that have come to be are able to isolate these terpenes, which have been shown to have a profound effect on our buzz. Various terpenes appear to have varying effects in not only our mood, but also in how THC and CBD interact with the body.

There are half dozen primary terpenes that make up the majority of cannabis flavors and aromas. These terpenes, however, do more than just affect taste and smell, they have a direct impact on our experience. For example, Limonene is what gives cannabis its citrusy scent. It is also believed that strains high in Limonene are more likely to have a soothing or relaxing effect. Myrcene is another terpene that has an earthy smell, and appears to increase the flow of THC and CBD through what is known as the blood-brain barrier. Terpenes, as it seem, are far more important to our understanding of cannabis than we previously could have imagined.

Cannabis concentrates are the future

The science of cannabis extraction has not only produced new methods and techniques, it has helped carve out an entirely new industry. The increased demand for cannabis extracts are evident in the numbers.  As cannabis sales continue to grow throughout the nation, extract sales are sure to follow. There will never be a shortage of cannabis consumers who want frosty green nuggets, however, extracts are sure to give flower sales a run for their money in the years to come. The growth of  concentrate sales and the development of advanced extraction technology marks a new era for an industry that is never short on innovation.

Cannabis Cultivation and Economy of Scale

Cannabis Cultivation and Economy of Scale

When getting into cannabis cultivation, many people don’t think about having to choose quality over quantity or vice versa. What it usually boils down to is not a matter of choice, but of economy of scale aka money stuff. Producing quality cannabis is about removing your ego and aptly identifying the needs of your plants. Producing quantity is about finding the right balance between healthy plants and your overhead costs.

Quality cannabis cultivation techniques

Technique is really what it comes down to when you opt for quality over quantity. So which techniques really make a difference and why? You won’t find much flexibility in environment once you achieve your target climate. There’s no need to improve on optimal. Your nutrient feed and the ecosystem you create in your soil are what will make all the difference.

The best quality cannabis cultivation comes from plants that have achieved maximum nutrient uptake. Nutrient bio-availability is the key to rich, full flavored and oh so savory marijuana. Methods of organic cultivation have shown produce cannabis with double the nutrient absorption of traditional salt based nutrients.

Organic cannabis cultivation

Organic and veganic cannabis cultivation techniques foster the growth of beneficial bacteria and microbes, which in turn convert the nutrients in the soil into a form that is more readily absorbed by the root system. It is this relationship between these beneficial microbes and bacteria, and your plants, that is ultimately responsible for the best cannabis out there.

Organic cannabis cultivation depends on nutrients that utilize animal and plant matter instead of elemental salts. There is a distinct difference in quality attributable to the symbiotic relationship formed between the roots and the microbes. Veganic cultivation takes this concept a step further and by using simply a compost tea, rich with beneficial microbes, increases nutrient uptake to nearly 100%. However, implementing these techniques in a large scale commercial grow simply doesn’t fit the bottom line. Also, due to a multitude of sources for contamination, most cannabis that is claimed to be “organic” actually has traces of inorganic contaminants.

Benefits of home growing

For the home grower it fundamentally comes down to basic understanding of plant biology and how to ensure the variety of needs are met. The budget for the home grower is negligible when it comes to the method of cultivation. Their methods are usually picked by familiarity or a spirit of exploration, pushing them to try new and innovative techniques. The home grower isn’t as restrained by investors looking to maximize profit, thus has more freedom in their application of technique. Additionally, when you’re growing on a smaller scale, your overhead is going to be significantly less/more contained than commercial growers. This means that home growing could potentially be extremely profitable (selling legally or illegally), with low overhead and high revenues.

Benefits of commercial growing

You can produce quality cannabis in a large scale commercial grow using hydroponics and nutrient salt solutions. There is no doubt about that. While it is totally subjective, many people believe that commercial cannabis cultivation frequently does not achieve the fullness of flavor, aroma, and essence of a boutique strain grown with the right techniques due to the homogenization that occurs in every big grow. When you have ten strains per room and ten rooms to water in a day, no commercial grow has the time, money and staffing to cater to the needs of every plant. The result is a fairly standardized, abundant cannabis product, that doesn’t differ much from dispensary to dispensary, and is for the most part, accepted by the vast majority of cannabis consumers in Colorado. Obviously, one of the main benefits of commercial growing is the sheer quantity of product that you are capable of producing. However, the overhead for the average commercial grow is well over $1 million.

Bottom line (literally and metaphorically)

Bottom line, the difference between quality and quantity of cannabis cultivation comes down to a matter of economy of scale. Many people aspire to have a huge commercial grow producing tons of dank ass cannabis. However, you can avoid huge overhead costs (which matters if you’re just starting up) and produce quality cannabis at home. No matter what route you choose, you can have both quantity and quality, if you apply the proper techniques which includes removing your ego from the process.


How to Navigate Cannabis Industry Compliance Regulations

How to Navigate Cannabis Industry Compliance Regulations

The Colorado cannabis industry compliance regulatory landscape has changed dramatically over the last decade here in Colorado. Long gone are the backpack days, when anyone with a closet and a green thumb could cash in on the fledgling market.

Pre cannabis industry compliance

Retail cannabis sales for recreational use threw a whole new set of rules and regulations into the mix. For anyone who has worked in the industry and tried to maintain within marijuana grow compliance, it sometimes feels like the rules are written arbitrarily by people who have never worked in cannabis cultivation. Running a profitable grow and maintaining compliance along the way in an ever-shifting legal landscape is as challenging as it sounds.

Once upon a time, talented home growers could walk into a dispensary with absolute fire, and flip it on the spot for upwards of $4500 per pound. There were no safety checks, tests for pesticides, microbes or anything else for that matter. They were the days aptly labeled the wild west era of the Colorado cannabis industry. Those pre cannabis industry compliance days didn’t last long, and it was a miracle they happened at all.  New states hopping on the legalization bandwagon have bypassed that phase entirely and seemingly learned from Colorado’s mistakes.

The evolution of cannabis industry compliance

By late 2010, Colorado mandated that medical dispensaries grow at least 70 percent of the cannabis they sell. This forced dispensaries to hire growers of their own. Along with that came a slew of new cannabis grow rules, regulations and the modern era of compliance was born. Nowadays, every last detail of a grower’s day is mapped out. Each plant is tagged, numbered and monitored by the state. Every bag of waste is counted, weighed and the contents are shredded beyond recognition before disposal. Every step of the way, the eye of the Marijuana Enforcement Division documents everything.

There are a few cannabis industry compliance areas which all operations struggle with, and it isn’t really their fault. The vast amount of regulation hoisted upon this burgeoning industry is a lot, even for seasoned professionals to swallow. The biggest shortcomings of dispensaries are in the areas of physical inspection, security, licensing,  inventory and financial issues. Physical inspections are akin to the health inspector looking for cat fur at the neighborhood Chinese restaurant. Anyone who has worked in a service industry knows that inspectors always find something.

Security & inventory compliance

Security is a bane of every cannabis business owner. Adhering to the Marijuana Enforcement Division’s strict security regulations, which include specific numbers of cameras per facility in very specific locations, is no easy feat. Security compliance mostly revolves around documentation of who went where and when, and keeping logs on specific security activities.

When it comes to inventory, the Marijuana Enforcement Division has done everything they can to eliminate the possibility of a black market forming right out the back door of legal grow operations. Inventory compliance is one of the biggest concerns for dispensary and grow owners. Compliance errors involving innocent mistakes, such as placing a recreational plant in a medical room could result in an entire crop being destroyed. The government wants to know where all of the weed is all of the time, and has implemented a system to achieve just that.

Pesticide compliance

Lately, the trends in grow compliance have mostly fallen to the regulation of pesticides. Understanding pesticides is a complex topic, so to make it easy, the state issued a list of approved organic products. Here we are years after the list was finalized, yet business who are established and should know better, are continually getting busted using banned pesticides. This example alone shows the need for increased regulation and the need for every grower and dispensary owner to want to remain in compliance. The last thing we want is to fall victim to is a company that wants to take shortcuts with our health.

For more information on compliance within the Colorado cannabis industry, make sure to listen to The Real Dirt with Chip Baker episode featuring Matt Bickel of Bickel Consulting.

What do you think about cannabis industry regulation? Let us know on social media.

Five 420 Friendly Ways to Enjoy a Holiday Weekend in Denver

Five 420 Friendly Ways to Enjoy a Holiday Weekend in Denver

It’s a holiday weekend in Denver and it’s time to figure out what you’re going to do with that extra day. In an amazing city like Denver, there are so many fun activities and strains to smoke that it might seem overwhelming. Good news, we did the decision making for you. Here are our top five choices of fun things to do on your holiday weekend and the strains to bring along.

1. The Ogden Theater with Durban Poison

Concerts are the one of the best ways to celebrate life (and long weekends). Luckily, Denver‘s local music scene is always popping. For a good show, you’re going to need a strain that will energize you and won’t burn you out. This weekend Drive By Truckers are playing two nights at The Ogden Theater. You’re not going to want something that will let your mind wander with the music while your eyelids stay wide open. Durban Poison is a great choice for lofty head highs that won’t drain you of energy.  Durban Poison is a pure sativa that is strong and flavorful. It’s a popular choice among cannabis enthusiasts making it pretty easy to find.

2. Skiing adventures with Northern Lights

We know it’s a little cold out, but the crisp Denver air is just a little sweeter this time of year. Rent a little cabin, hit a bed and breakfast, or go skiing for the day. If you want to stay close to Denver and still enjoy that fresh pow, check out Arapahoe Basin. Enjoy the very best of the winter season and don’t forget to bring a little nug of cheer. A nice indica will help take the edge off of that winter chill. Nothing goes better with winter than Northern Lights. Northern Lights is a popular indica hailing from the Pacific Northwest. The sweet and piney flavors will go well with your wintertime outdoor activity of choice.

3. Gaming with Blue Dream

For those of us who are scared of a little frostbite and prefer to spend the day indoors, cozy in our Denver homes, plugging into an Xbox or Playstation can be just as satisfying, especially since you don’t actually need to leave your house to hit the ski slopes anymore. Video games have become a perfectly good way to spend your time…or all of your time. Now just which strain do you need to go along with a day in front of the tube? You want to stay focused so a nice hybrid like Blue Dream will do the trick. Blue dream is sweet and fruity strain with a high THC count that will keep you elevated game after game.

4. La La Land with Death Star

Everyone loves going to the movies. In Denver, there are a series of historic Landmark Theaters that make the move going experience even better. Playing this weekend at The Mayan in Denver is “La La Land,” which is quickly cleaning up in awards and accolades.  You’ll want to stay focused enough to follow the plot, yet relaxed enough to really enjoy yourself. Regardless of what movie you go to see, Death Star is what’s going to get you there. Death Star is a pungent indica dominant hybrid known for its heavy diesel flavor. Use the force and grab some Death Star, the perfect compliment to a day at the theater.

5. Doing nothing and dabbing

You don’t have to succumb to the pressure of finding something to do in Denver on your holiday weekend. You can sit at home, relax and take advantage of not having to anything whatsoever. For the extreme tasks of sitting on the couch and staring off into space, skip the bud all together and get yourself a nice concentrate. Shatter, wax or butter doesn’t really matter, the concentrated dose of THC will put you in a place that will make doing nothing feel great.

What are your favorite strains for long weekends? Let us know on social media.

How Section 280E Affects the Cannabis Industry

How Section 280E Affects the Cannabis Industry

One of the benefits of owning a business in the U.S. is the leeway one has in writing off business related expenses to reduce your overall tax burden. Unfortunately, when it comes to the cannabis industry, business owners are not afforded the same luxury.

What is Section 280E?

Under section 280E of the U.S. tax code, tax credits are not available for incomes derived from substances listed as either Schedule 1 and Schedule 2. In other words, cannabis industry entrepreneurs are drug dealers in the eyes of the feds and therefore get no breaks.

Where did Section 280E come from?

Section 280E came about in September of 1982, after a cocaine dealer was busted, but maintained he had the right to write-off non-drug related expenses as part of his business operations. Nice try, but the court disagreed and shortly after, the IRS adopted 280E. Fast forward thirty plus years and the situation has changed. The overwhelming consensus among Americans is that marijuana should be legal. A small faction of individuals in various parts of the government whose careers are dependent on marijuana prohibition are doing everything they can to delay the inevitable, including the IRS.

How 280E affects the cannabis industry

The IRS has not made any progress in softening the burden for cannabis entrepreneurs as they continue to do everything in their power to make operating a cannabis business a difficult as possible. While most entrepreneurs freely write-off just about everything, cannabis business owners are restricted to a handful of deductions including labor and limited costs surrounding production. The failure to progress with the attitudes of the populace and create new regulation for cannabis entrepreneurs demonstrates the resistance of the old guard.

The cannabis industry is raking in cash hand over fist. While the IRS can do nothing to stop the industry from growing, they can do everything in their power to maximize the amount of money they extract from it before more comprehensive, cannabis industry specific tax law can be written. Efforts have been made to reign in the IRS in as far as cannabis goes. In 2013, legislation was introduced that was meant to remove cannabis business from federal tax regulation while new cannabis specific law could be written. While legislation like this seems to go nowhere, the reality that cannabis must be dealt with under its own tax parameters is becoming harder to ignore.

Section 280E successes in the cannabis industry

There have been incremental victories won, including the 2007 CHAMP decision. CHAMP, a medical dispensary in California was taken to court over its tax bill. The lawyers for CHAMP argued that despite the strict guidelines of section 280E, cannabis businesses still had a right to deduct the costs of operating a business that were not related to the trafficking of controlled substances. Ultimately the ruling allowed cannabis entrepreneurs who ran multiple businesses under one roof to deduct some of the operating costs of both companies. As example, CHAMP ran a dispensary which sold marijuana, but also ran a consulting and patient referral business.

The CHAMP ruling allowed many cannabis businesses to split their operations into multiple companies as a way to get around many of the 280E regulations and still remain in legal compliance. The intent of section 280E was fundamentally to prevent cocaine dealers from writing off mansions and yachts, but the emergence of industries that overlap with the previous law just doesn’t square.

Tax code 280E reform and progress

The failure to implement new tax code for the purpose of distinguishing between legal cannabis businesses and illicit drug dealers has done nothing but force legitimate businesses to resort to makeshift fixes, like the CHAMP ruling and other loopholes they can find. Much like prohibition created a black market, inappropriate tax law does nothing but force cannabis businesses to find new and creative ways to reduce their tax burden. As cannabis acceptance continues to grow, it would seem that these problems in the tax code are transitional. Let’s hope they are.

What do you think about Section 280E reform? Let us know on social media.

The Pros and Cons of Vertical Cannabis Grows

The Pros and Cons of Vertical Cannabis Grows

As people look for better usage of space for cannabis growing, vertical cannabis grows have come under the spotlight. To maximize yields, growers traditionally analyzed how many grams of marijuana were being produced per square foot. Taking your cannabis growing up, instead of out, seemed like the obvious solution.

How vertical cannabis grows work

But how exactly do you grow cannabis vertically as opposed to the traditional flat grow system that we have all become accustomed to? There are several types of vertical cannabis grows, but they all revolve around similar principles. They all look to increase production while maximizing efficiency of space using a system of vertical lights and reflectors.

Vertical cannabis grows can employ either traditional soil systems or hydroponics, however, the set-up for both of these systems is quite different. The one thing they have in common is that the vertical cannabis plant arrangement is circular around central light source. If you are considering a vertical grow, it’s a great way to produce quality cannabis but there are a few pros and cons to consider before making the switch.

The pros of vertical cannabis grows

One of the biggest benefits to vertical cannabis growing is the increase in yields. Vertical growers swear up and down that when done right, increased light distribution through the use of reflectors leads to heavy weights. Some have even claimed yields as high as 2.5 grams per watt. Achieving these kinds of yields through the cannabis growing stages takes practice and a precision not easily achieved. One of the major downsides of vertical growing is the setup cost. Building your own circular shell complete with reflectors and shelving can save you some money, but all-in-one vertical grow systems will cost you a chunk o’ change.

Extend your cannabis growing cycle

A vertical cannabis grow will also let you squeeze in one extra cycle annually which means more product at the end of the year. Often clones are only allowed to remain in the vegetative state for a couple of days which greatly increases their exposure to the twelve-hour light cycle. One idea of vertical farming is grow more plants of a smaller size.

Starting the cannabis flowering stage early helps vertical growers meet this goal. Small plants, however, do not necessarily mean small buds. The down side to this is that smaller plants means you need a lot more of them. A lot more, which means you’re going to want to keep a mother on hand or have access one.

The cons of vertical cannabis grows

Another thing to keep in mind is that balancing temperatures and humidity with plants literally stacked on top of each other can be difficult. The more plant mass located in a confined space means temperatures and humidity will go up. That triggers the need for excellent cooling and ventilation. The never-ending battle between environment and your HVAC can be exacerbated by the tight quarters of a vertical grow.

So what’s the consensus?

The single biggest benefit of a vertical grow is space. Arranging plants vertically and allowing them to bathe in a central light source utilizes the cubic feet in the room that would otherwise go ignored. Growing up instead of out increases efficiency and will ultimately lead to an all-around boost in production.

The single biggest challenge to vertical growing isn’t the method or the technique or even the price. The biggest challenge to overcome in vertical growing is you. Overcoming what you have learned before and reshaping your perceptions of what it takes to grow quality cannabis will be the hardest step you take on your venture into vertical cultivation.

What do you think about vertical cannabis grows? Let us know on social media.

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