Daily Cannabis

Evidence of Maturing Cannabis Industry Abounds

The wholesale and retail cannabis and hemp industry, once outlawed, reviled and shunned, is estimated to ring up in the near future billions of dollars for businesses from growers to distributors to small retailers across the country. With that vast accumulation of dollars in a relatively short amount of time, supplementary businesses and services, previously associated with developed, Main Street companies, have emerged. Some of them have transitioned from other industries while some offer services exclusively for cannabis and hemp firms.

It’s no longer, “Psst, I have some weed.” Cannabis and hemp products for legal applications are a high-end, top-shelf product available in boutiques, not on seedy urban streets. And in order to grow, the businesses need financial, marketing, tax, legal and other advice.

As an example of these opportunities, in at least one state, Colorado, marijuana sales since 2014, when it was legalized in the Rocket Mountain market, have grown to $13.4 billion, according to the Colorado Department of Revenue. Understandably, a portion of that number also ends up in the state’s tax coffers, which in the case of Colorado amounts to $2.3 billion.

The CannaOne, https://cannaone.com/,  NJ Cannabis + Investment Expo at the New Jersey Convention Center in Edison on October 10-12 was an suitable venue to witness this expanding interest and trend. Additionally, exhibitors touted wares that are natural, ecologically friendly and fast acting.

With the issues of business and sales growth touching all levels of management, including CEOs, the presence of service firms means that the industry is maturing, believes Sandy Suchoff, CPA and founder of The CannaCPAs, https://thecannacpas.com/, with offices across the country. The firm offers a range of financial and tax services dedicated to make cannabis companies more profitable.

“The cannabis and hemp industry is becoming a ubiquitous industry because it has become legal in many states but not yet on the Federal level,” Suchoff said. She noted that the company can help with legitimate strategies to mitigate negative effects of the federal and local tax code.

“We can design a plan to grow profits, set targets and use analytics to align with those targets. We set objectives to grow because, after all, cash is king from farm to retail,” Suchoff said.

According to Dope CFO, www.dopecfo.com, cannabis service companies seek to assist budding firms along the entire supply chain to “make sure that they get a bite out of the market,” observed Malvina Kay. She explained that the future of the industry depends on loosening of federal and local regulations so that sales of the legal version of cannabis and hemp can grow organically.

With consumer demand for cannabis surging, the question of where to find a small business becomes problematic. One solution is an app called Weed Maps, http://weedmaps.com. This downloadable aid assists consumers in connecting with retailers by zip code. As consumer interest grows about a product that is not going to go away, this app resolves the question of where to buy legal weed, observed Bianca Endersby, trade show and evens manager.

Realizing the need to control cannabis absorption by the body to avoid unexpected highs and lows, Azuca, https://azuca.co/, which translates into sugar, developed a time-infusion product that transforms ingestible cannabinoids into fast-acting ingredients for edibles. Alex Archuleta said the company is a manufacturer of the product that works in 5-15 minutes. Licensee relationships are available. He too believes that the industry’s growth hinges on the speed of adopting supportive laws and regulations.

With the industry’s supply chain beginning with growers, the assurance of adequate growing conditions is vital. For those that choose to grow the plant indoors, Trane, www.trane.com, offers a system that establishes and monitors the correct interior environment, observed Richard Dulski, New Jersey account manager. The benefit is that the supply chain is assured of a good product from grower to retailer, Dulski said.

For locations that permit the tobacco or smoking version of cannabis, Tuxedo Paper Co., www.tuxedopaper.com, offers a range of premium rolling paper from the Czech Republic. Ryan Yoon, marketing representative, imports ecologically friendly paper as a competitive edge to the first tier providers. He said this product will satisfy the demands of this growing market.

Devon Darden, financial services representative for Capital Strategies, www.csomtx.com, observed that the industry is riding the beneficial wave of cannabis’ social acceptance. The stigma is evaporating, the industry is maturing, the product is more acceptable, regulations are changing, all of which Darden said is a boon for the supply chain.

“Five years ago I couldn’t speak about this with my mother. Today, cannabis and hemp are acceptable products,” Darden noted.

As cannabis usage and sales become legalized across the country, Amorette Mason, Accounting Buds, www.acctbuds.com, said the need for service companies in this growing industry will be greater.

Drug arrests – even minor ones – still figure negatively on a jobseeker’s employment searchers. President Biden’s recent support for decriminalizing even minor busts is a step in the right direction but exhibitors said it’s not enough. But the personal stigma persists. Cannabis Equity Employment, www.cannabisequityemployment.com hopes to change that. The firm emphasizes social equity, impartiality, fairness and justice for all people as a social policy. Consequently, former inmates should not be denied employment. “We’re looking to create an even playing field so that formerly affected people could get back into employment,” explained Adrian Clarke, chief operating officer.

As with any budding industry with recognizably large sales projections, quality assurance, standardization and industry monitoring eliminates the need for dubious “trust me” marketing. Industry self-regulation is a process whereby members of an industry, trade or sector of the economy monitor their own adherence to legal, ethical, or safety standards, rather than have an outside, independent agency such as a third party entity or governmental regulator monitor and enforce those standards. Understandably, ingredients, top-notch salesmanship and the absence of unregulated knock-offs are essential attributes of this process. Dr. David L. Nathan of Doctors for Cannabis Regulation, www.dfcr.org, is working toward that goal. In this context, regulation does not have a negative connotation but rather a positive one.

Presently Nathan is working to develop a consensus of standards among companies across the supply chain, beginning with the business activities’ logo that is approved by the ASTM International. As with other industries, standards and unanimity ensure that everyone is operating under the same terms and symbols. The promotion of such an industry-wide good policy ensures success and profitability for all participants.

Due to the importance of this issue, we’ll be returning to it regularly in the future.

Hope to see you at the next educational/informational event, the Real Cannabis Entrepreneur LIVE Conference 2022, https://realcannabisentrepreneur.com/, Double Tree Hotel, Newark, NJ, Friday and Saturday, October 21-23.