Cannabis Small Business

Cannabis: The Newest Corporate Frontier

The marijuana industry is really starting to take off. Here is all that you need to know.

From January of 2014 to April 2019 total marijuana sales increased in Colorado from a total of six hundred and eighty-three thousand dollars to roughly six billion and five hundred and sixty-two thousand dollars. Those numbers show the increasing amount of opportunity that there is in this industry, especially in states that are just now beginning to legalize cannabis.

People of all ages and demographics are finally beginning to understand what cannabis does and how it can benefit our health and wellness.

Cannabis is complex but can primarily be broken down into two main types such as “Marijuana” and “Hemp.” Marijuana produces cannabinoids such as THC and CBD. These cannabinoids are receptive to our endocannabinoid system which then in return give us the benefits. There are many benefits such as reduced anxiety, reduced inflammation, reduced pain and much more. THC and CBD work well together to even slow cancer cell growth.

THC is the psychoactive cannabinoid of the marijuana plant which would give you the effect of a “high” while CBD will not. THC is used to treat pain, anxiety, insomnia, nausea, glaucoma and even muscle spasticity. CBD is used to treat inflammation, pain, depression, anxiety, migraines, seizures and more. THC and CBD together work super effectively and have something called the “entourage effect” since they work with each-other when treating for wellness and health. I believe research for what cannabis can do for us is just in the beginning stages, and there is so much more we have yet to find out. 

Hemp as well as marijuana was used thousands of years ago before the cultivation of cannabis was banned by the Controlled Substances Act of 1970. Hemp can be used for so many things from textiles, paper, building material, soaps, oil paints, fuel, and printing ink. Ancient civilizations mainly used hemp for clothes, paper, and rope. At one point in time it was a law that if you were a farmer under King Henry VIII you were fined if you didn’t cultivate hemp for industrial use.

With legalization coming of age in many states in the U.S and countries around the world, there are many companies that want to become the Coca-Cola of Cannabis. Some of the largest companies competing to gain market share are Aurora Cannabis, Cronos Group Inc., Tilray Inc., Curaleaf, and iAnthus. Many of these companies have the best tech equipment in some of the largest grow rooms and labs that help them produce high quality cannabis for large scale distribution. For example, last quarter Aurora Cannabis sold around 8164 kilograms of marijuana while they forecast to increase production to 780,000 kilograms by 2022; Curaleaf currently operates in 11 states and just expanded to Ohio with a $20 million dollar acquisition and Cronos Group sold 1,111 kilograms the first four months of 2019 which increased 122% from 501 kilograms sold in the first quarter of 2018

Some of these companies, specifically Tilray Inc. have been on the radar of investors for the last year. The stock of this company was trading at around $24 in August, 2018, and surged as high as $148 in just one month as investors flocked to invest. Users of cannabis are not the only ones excited about legalization, those wanting to invest are also intrigued by the new billion dollar industry.

With large scale production like this it is tremendously hard to produce consistent high-quality cannabis when you have hundreds of plants to tend to. That is one of the reasons I believe the market is still open not only for some to become the Coca-Cola of cannabis but also the success of small cannabis companies in the future. 

There was a quote I heard while listening to CNBC that was “We don’t need hundreds of cannabis companies” and that’s true to an extent. The extent of hundreds of cannabis companies is that they should not only be in city hubs but all over individual states for those who are not looking to drive 40 minutes or more to get cannabis. The demand for this crop allows a niche market where small cannabis businesses can flourish compared to a large-scale producers whose sole purpose is to sell cannabis compared to selling customers an experience.

In the future of the cannabis industry I expect several of the smaller chains that are out preforming their other small competitors to merge or be acquired to create large companies that own multiple brands either nationally or globally as Nestle, Coca-Cola, Pepsico, Kellogs and a few other businesses do. These smaller brands are already mostly established and have production and sales going so investment cost is generally cheaper (aside from major expansion investments) than starting from a blue print of a building, hiring personnel etc…  BUT this will not be the end of small cannabis companies.

I believe that in the future small cannabis companies will thrive just as micro-breweries did and currently do. From traveling to Colorado, Massachusetts, Maine, and New York to network and study dispensaries I have noticed that the ones who do the best are the ones who correctly harness their own business image to their production, display, and sale of cannabis.

As someone could be a connoisseur of IPA’s, someone can be a connoisseur of cannabis and different CBD products. Many high-quality cannabis companies will create their own strains or offer more strains that will allow the diversity that micro-breweries offer now that major cannabis companies lack. Major cannabis companies focus on only a few strains at a time while smaller cannabis companies have more flexibility to what they can produce for their audience.

In closing, the next ten years of the cannabis industry will be some of the most important. From major acquisitions across state boards, to overseas mergers, the opportunity is rising, and it is rising fast. It is expected that by 2022 there will be at least 330,000 jobs in the cannabis industry in the United States and that the US market for marijuana is estimated to be worth over fifty billion dollars. With the opportunity there, there is one thing we cannot forget though.

We cannot forget the communities affected by the war on drugs and those who have been incarcerated for cannabis. It isn’t fair that someone who was arrested for consuming or selling cannabis to be locked up while people will be cashing in millions or billions of dollars from this flourishing industry.

Local governments are doing their best to make sure that people affected from the war on drugs have a chance to get into the industry and that portions of the tax dollars from legal cannabis go to such communities that were affected by the war on drugs to fund programs or fund cannabis businesses for those applicants within those communities.

I wish you all the best in your potential cannabis journeys and I hope you can witness first-hand the amazing benefits that cannabis has to offer.

As Wiz Khalifa said,

“Smoke some weed and handle your business. You’ll be good.”

Steven Tobey is a passionate advocate for cannabis and has been ever since he witnessed the benefits that it can provide for many individuals. With a drive and passion to inform and connect with people who may have never used cannabis or use cannabis regularly, he founded Dankest Digest, a blog that discusses all aspects of cannabis including lifestyle, health and wellness, science, cultivation, news, and much more.

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