Buoyed by a beneficial legal climate on the Federal, state
and local levels, growers, processors & formulators, distributors and
retailers are taking advantage of enthusiastic consumers’ interest in
therapeutic and recreational cannabis – the basis of marijuana.
But first, a few definitions of comm
only used terms:
Hemp: Also known
as industrial hemp, is a botanical class of Cannabis sativa cultivars grown
specifically for industrial or medicinal use. It can be used to make a wide
range of products. Along with bamboo, hemp is among the fastest growing plants
on Earth.
Cannabis: Also
known as marijuana among other names, is a psychoactive drug from the Cannabis
plant. Native to Central and South Asia, the cannabis plant has been used as a
drug for both recreational and entheogenic (psychoactive substances) purposes
and in various traditional medicines for centuries.
CBD: Cannabidiol
is a phytocannabinoid discovered in 1940. It is one of 113 identified
cannabinoids in cannabis plants, along with tetrahydrocannabinol, and accounts
for up to 40% of the plant’s extract.
Tetrahydrocannabinol
(THC): Together with cannabidiol (CBD) are the two primary
cannabinoids that occur naturally in the Cannabis sativa plant, most commonly
known as cannabis. Both of these substances interact with the cannabinoid
receptors found in the human body and brain, but they differed dramatically in
their effects.
Delta-8 THC is
one of over 100 cannabinoids produced naturally by the cannabis plant but is
not found in significant amounts in the cannabis plant. As a result,
concentrated amounts of delta-8 THC are typically manufactured
from hemp-derived cannabidiol (CBD).
Apparently many of the exhibitors and attendees at the White
Label World Expo at the Javits Center in New York last Thursday and Friday,
September 29-30, were in the know about this expanding market segment. A
majority of the 250 exhibitors are involved in some form or another in the
cannabis industry. Attendees were able to discuss the latest trends with
growers or famers, processors, formulators and packagers, wholesalers and
retailers. Many were eager to accommodate inquiries about developing a white
label relationships, private label, or off-the-shelf products.
But still, the vast array of ideas, developments and
applications was mind boggling to the unsuspecting visitors. Also, note that
the smoking version of cannabis is not legal everywhere across the country,
even for medicinal use, so consequently some exhibitors only showed it in large
sealed glass containers.
What’s driving this market? For one thing, it’s a new
industry that recently emerged from the shadows.
I asked Dr. ZaLonya Allen, president of the National Entrepreneurs Association, for
her opinion of what’s going on. “This is new and it’s part of a multi-billion
industry. Businesses are jumping on this bandwagon in hopes of making a lot of
money. There will be a lot of opportunities to grow profitable businesses,” she
opined.
Many exhibitors expressed the same hope. They indicated that
in the past three - five years, business has skyrocketed up to 200 percent. Official
figures corroborate that expectation. The US cannabis market size was valued at
$10.8 billion in 2021 and is expected to expand at a compound annual
growth rate (CAGR) of 14.9% from 2022 to 2030, according to Grand View
Research.
While there’s money to be made, it’s not that easy. For one
thing, there isn’t a single national law on how to buy and sell cannabis. Rules
and regulations continue to roll out but in the meantime businesses may
encounter different and contradictory laws among Federal, state or local
governments.
“It’s not like selling chocolate bars,” observed Ken Tays,
founder and president of Green Leaf
Marketers, www.greenleafmarketers.com.
While the company handles the full gamut of marketing tasks solely about
cannabis and hemp products – except logo design, advising clients whether or
not their products will sell in specific locations is its crowning service.
Without Tays’ knowledge of the laws and regulations, which he honed as a postal
employee, companies could be stopped dead in the water with nowhere to go for
their misjudgments.
“You have to know the regulations before you sell and ship your
product because each state is different,” Tays said, noting that he first submits
product specifications to compliance lawyers to protect the client.
Today’s range of end uses for cannabis and hemp include
therapeutic as well as recreational
products such as topical creams and other applications, infusible
formulations, beverages, candies and also apparel. Many companies are amenable
to white or private label relations. With the negative stigma surrounding
cannabis evaporating, consumers can be neatly divided into two categories: over
30 years of age up to the later years of their lives that seek these products
for their therapeutic benefits of which there are reportedly many, and under 30
who enjoy their recreational and calming properties.
Growers, processors and retailers emphatically warned that
knockoffs should be avoided at all costs because of inherent dangers that could
threaten not only lives but also the industry’s success. They also pointed out
that the related products should not be marketed to consumers in gasoline
station convenience stores or corner candy stores but rather should be offered solely
in high-end boutiques.
Ashley Shafer, operations director of DNA Hemp, www.dnahempllc.com, a hemp grower
in Wisconsin, described her product as an ancient plant with therapeutic
benefits. “It’s a seed to soul plant that can help small businesses grow their
sales,” Shafer said. “We are passionate about soil to soul practices by
respecting the plant, its diversity and intended purposes.” The company
features hemp flowers, CBD edibles, CBD oil and topicals. Like other
exhibitors, it emphasizes that the products are third-party lab tested.
Mario Irizarry, coo of Treehouse
CBD, https://treehouse-cbd.com, said
he and his partners launched the company in response to the growing demand premium
CBD products over the past five years. With stores located in the Metro-Detroit
area and shipping nationwide, Treehouse CBD provides novel CBD solutions;
including CBD gummies, topical CBD ointments, CBD salves and CBD pet products.
Irizarry is convinced that CBD products can help a small business expand sales
because they have come of age for a wide range of consumers.
What’s Your Treat,
www.whatsyourtreat.com,
took its 60 years of expertise in marketing candy and two years ago expanded it
into CBD candies, according to James Bivens, co-owner and CFO. It’s top sellers
include fudge, taffy, gummies, chocolate pops, and caramels. For its customers
it can create its own brand, design packaging, build product line, package
products and ship to retail location. The company can also infuse its products
with customers’ flavors, Bivens added. “It’s a hot topic. In the past two to
three years, we’ve seen 100-200% growth, he said.
Alabama-based Wagon
Trail Hemp Farms, www.wagontrailhempfarms.com,
works with local farmers in producing an assortment of hemp products. It offers
white label marketing opportunities, according to Shelly Bullard. The company
formulates its products or helps with formulating them according to client
specs. Deregulation and positive consumer health awareness have been a boon to sales
growth, Bullard said.
The diversity of CBD therapeutic applications was pointed
out by Mara McCalmon, director of operations, Thumb Coast CBD, www.ThumbCoastCBD.com. It can be
given to pets as well as children. “We’ve seen the therapeutic benefits of CBD
for years even when we couldn’t study it in American universities,” she said. “We’ve
been fighting the bad connotations and now it’s become the latest health
tonic.” As states open their doors to sales, growth will follow, McCalmon
added.
Bayou City Hemp Co.,
www.bayoucityhemp.com,
is following the hemp profit trail in still another direction. According to
Karen Trotter, CFO and investor relations, 50% of the recreational cannabis
market will be in beverages. But is that different or better than regular
whisky? Trotter explained that cannabis beverages relax and contribute to
socialization without the day after alcohol effects. The company is working
with a beverage manufacturer to produce cannabis on tap.
David Binder of the Doylestown
Hemp Co., www.dhempco.com,
opined that the market is currently saturated with topical and therapeutic
products so he believes the future is moving toward industrial products such as
sublingual tinctures, topical muscle, joint and pain gels as well as hemp
soaps, candles and wax melts in a variety of aromas and decorative botanicals.
Capitalizing on the therapeutic benefits of cannabis and
hemp, WellBeing Farms, www.wellbeingfarms.com,
forthrightly announces this in its tagline “Nature’s Medicine.”
Stiffyz LLC, www.stiffyz.com, is another company
that offers natural cannabis alternatives to promote feel-well living. One
product, as the name implies, is to boost male sexual prowess, and the other,
explained Darin Wells, CEO, is for relaxation and sleep in a black tin and the
other, in a red tin, for a psychoactive high that allows you to go throughout
your day.
One of the few overseas exhibitors, Irish Gold, www.irishgoldcbd.com, growers of
organic hemp on their own farms, is sure its product will be successful on this
side of Atlantic because “It’s Irish and everyone loves Irish,” quipped Oscar
Burns, director. He added that his company knows how to market to small
businesses because it’s also a small business.
In these unstable economic times, the savvy business person
shouldn’t overlook this new, potentially profitable opportunity to grow sales.
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