fbpx
Cannabis Is America’s New Cash Crop, More Profitable Than Cotton Or Rice

Cannabis Is America’s New Cash Crop, More Profitable Than Cotton Or Rice

cannabis is now the 5th most profitable cash crop in America

Cannabis marketplace Leafly Holdings, Inc. released its inaugural Cannabis Harvest Report on Wednesday revealing that cannabis is America’s 5th most valuable crop. The report takes the first look at cannabis data, insights and projections across the 11 states where Americans can currently purchase both adult-use and medical cannabis.

To conduct the analysis, Leafly’s investigative team teamed up with Whitney Economics and ended up discovering that cannabis has become a major agricultural commodity that supports thousands of American farmers and farm communities.

Based on the report, cannabis crops in adult-use states now support 13,042 licensed farms in the aggregate. On an annual basis, those growers harvest 2,278 metric tons (5,022,990 pounds) of cannabis. To give you a better idea: that’s enough weed to roll more than two billion joints or fill 57 Olympic-size swimming pools

Cannabis Is More Valuable Than Cotton, Rice And Peanuts

That amount makes cannabis the fifth most valuable crop in the United States. With a wholesale harvest value of $6.2 billion, America’s cannabis harvest ranks above cotton and below wheat, based on US Department of Agriculture data for 2020. Only corn, soybeans, hay and wheat bring in more money to American farmers.

Based on wholesale harvest value, this is how U.S. crops rate:

  • Corn $61 billion
  • Soybeans $46 billion
  • Hay $17.3 billion
  • Wheat $9.3 billion
  • Cannabis $6.2 billion
  • Cotton $4.7 billion
  • Rice $3.1 billion
  • Peanuts $1.3 billion

“America’s adult-use wholesale cannabis crop returned a mind-boggling $6.175 billion to farmers last year, ranking it as the 5th most valuable crop in the United States,” David Downs, the report’s lead author and Leafly’s California bureau chief stated. “ Yet, due to federal prohibition, America does not treat cannabis farmers like farmers. They are subject to more state and federal taxes, regulations, and stigma than any other type of farmer. These barriers hurt small legacy farmers the most. This plant is helping generate wealth, employment, and community investment around the country, and our legislators need to recognize the opportunity cannabis presents for Americans—today.”

The report also revealed that legal cannabis is the single most valuable agricultural crop in Alaska, Colorado, Massachusetts, Nevada and Oregon, but remains completely uncounted and ignored by state agriculture officials. In Alaska alone, the state’s cannabis crop is worth more than twice as much as all other agricultural products combined.

Online cannabis marketplace Leafly to go public

Online cannabis marketplace Leafly to go public

cannabis company Leafly is going public

In a historic year for Washington companies going public, Seattle-based Leafly, an online cannabis marketplace, will push the 2021 total even higher.

The company announced Monday it will go public through a special merger with New York-based Merida Merger Corp (Nasdaq: MCMJ). The transaction is expected to value Leafly at $385 million and add approximately $161 million of additional proceeds to the company.

The combined company will adopt Leafly’s name, and is expected to trade on Nasdaq with the ticker symbol “LFLY.” The company said it will list its shares once the merger is complete, likely sometime this fall.

According to PitchBook, 15 companies in Washington have gone public in 2021 so far, five more than last year’s total, and the most the state has seen in the last five years.

“Online retail shopping is in our DNA,” said Yoko Miyashita, CEO of Leafly, in an interview. “What you see is … this realization from consumers that say ‘Oh, (cannabis) is like any other retail product I can order online.”

Leafly earned $36 million in revenue last year, up from $30 million in 2019, according to its investor presentation. This year, revenue is expected to increase to $43 million, and grow roughly 50% annually through 2024.

Still, the company does not expect to be profitable until 2024, predicting it will lose at least $15 million in net income from 2021 to 2023.

The company makes money mostly through subscription fees it charges cannabis retailers who list their menus on Leafly’s platform. Customers place orders with retailers through the online site, but still have to go to the cannabis shop in person to pick up their product. Leafly does not take a commission from each transaction but does make money off ad sales from retailers.

The company said it has 4,600 paying retail subscribers, with approximately 55% of North American retail cannabis licensees on its platform and 125 million annual visitors.

Miyashita said cannabis retailers are “constrained” in their ability to advertise on major social media networks because of federal prohibition laws. Leafly’s platform, giving retailers and consumers an opportunity to reach each other, is “huge,” she said. “We have one of the largest audiences in cannabis.”

Lax THC vape rules still allow toxins into your lungs

Lax THC vape rules still allow toxins into your lungs

THC vape toxins are still prevalent

In 2019 and 2020, vaping-associated lung injuries killed 68 people and injured 2,807 across the United States. As reported by Leafly and later confirmed by officials at the Centers for Disease Control and Prevention (CDC), those injuries and deaths were almost exclusively associated with unlicensed THC vape cartridges purchased from the illicit market.

 

At the heart of the health crisis was a relatively new vape cartridge additive known as vitamin E acetate. Unlicensed cartridge manufacturers were using the substance, a common ingredient in beard cream, to thicken the cartridge oil and boost profit margins.

After the poisonings, officials at the CDC said the number one thing state cannabis regulators could do to protect public health was ensure that “chemicals of concern” like vitamin E acetate did not enter the state-licensed THC vape cartridge supply.

As of early 2021, cannabis regulators have not done that.

 

A Leafly investigation into current and forthcoming regulations around THC vape cartridges in the 15 legal cannabis states reveals that more than a year after the vape lung (also known as EVALI or VAPI) crisis, a few states have banned vitamin E oil, but not a single state upgraded its THC vape cartridge testing requirements up to the standard currently required for all nicotine vape cartridges in Europe and Canada.

State cannabis regulators have generally done a great job of protecting the health of consumers by requiring tests for toxins like pesticides, residual solvents, heavy metals, mold, and bacteria. Manufacturers are also required to test and disclose the exact potency of every product on the label.

But sometime around late 2018, THC vape cartridges escaped the bounds of those safeguards. A new wave of novel cartridge oil additives, thickeners, thinners, diluents, and artificial flavors began flooding the market. The new additives were mostly limited to illicit-market vape carts, but a few seeped into the legal regulated market as well.

Those new additives included:

  • Vitamin E acetate, aka beard cream oil
  • Squalene, a shark liver oil substance
  • Thousands of food flavorings not approved for inhalation

What kept these toxins from flooding into the legal THC vape supply? Only the good conscience of many licensed vape cartridge manufacturers—and a bit of luck. Nothing in the regulatory system of any state would have prohibited most of the new wave of additives.

 

Even today, the existing patchwork of state rules—with their yawning safety gaps and a total absence of federal oversight—has experts throwing up their hands.

Vape chemistry and regulations expert David Heldreth Jr. stepped down as the Chief Science Officer of a vape flavoring company. “It’s painful,” he told Leafly. “It’s one of those things where the industry just popped up and grew so quickly, it’s really difficult to keep up with what people innovate.”

CannaCraft, California’s biggest vape maker, forbids non-cannabis ingredients in its products, citing a lack of safety data. But the only thing keeping the company from adding mystery flavorings is the integrity of company officials. Many in the industry are doing it right. Others have less scruples. Consumers have few ways to tell.

“I think we do a lot of things well, but there’s certainly room for improvement,” said Matthew Elmes, a molecular biologist and Director of Scientific Affairs for CannaCraft. “There are so many things that aren’t tested for, and we don’t know, as consumers, what’s going on there.”

Leafly’s comprehensive review of THC vape cartridge rules in the 15 legal cannabis states found loopholes where those chemicals can get in.