Cannabis Industry Sits on Precipice of Major Expansion

By Bill Meagher
Source: thestreet.com

A string of good news for the cannabis sector may prompt institutional investors to get into the game, but watch valuations increase.

The cannabis industry could be on the precipice of real boom. Not the slow trickle of PIPEs and venture funding rounds investors have seen since 2014 but a full-fledge boom.

Over the last two weeks, the cannabis industry has seen events which could bring a wave of institutional investment into the sector, as well as other changes. 

President Trump cut a deal with Colorado Senator Corey Gardner, R-Colo. to allow states to decide what to do about cannabis. Senator Mitch McConnell's R-KY introduced his own legislation to make hemp farming legal in the U.S. And former Speaker of the House John Boehner became a director with cannabis company Acreage Holdings.

Want more? How about the Food and Drug Administration setting up for an approval of the first cannabis-based drug from GW Pharmaceuticals Plc (GWPH) ? And the Veteran's Administration now wants to study the effectiveness of cannabis for chronic pain and PTSD.

Then there is the highest profile development, New York Democratic Senator Chuck Schumer introducing legislation to remove cannabis from the DEA's list of controlled substances, to decriminalize pot at a federal level and effectively allow states to decide how to regulate the use of medical or recreational marijuana without concern for federal law. 

John Downs, director of business development for Arcview Group thinks the recent events are enough to move some risk adverse investors into the sector. "Investors will see this as a sign. This is extremely positive news for the industry."

Arcview sponsors an investor network that sponsors events putting cannabis companies in front of investors, it also crunches data on the sector and sponsors a marijuana business incubator among a variety of services and businesses.

Downs sounds a note of caution for investors reading too much into Schumer's legislation.

"Introducing a bill and passing a bill are two very different things. That said the toothpaste is out of the tube. Regardless of the politics, the left sees cannabis as a social justice issue, the right is about state's rights. Either way, support for cannabis is growing and the next logical step is the elimination of prohibition."

Under current federal law, cannabis remains a schedule 1 narcotic as classified by the Drug Enforcement Administration. The status keeps pot on par with heroin and LSD as substances with "no currently accepted medical use and a high potential for abuse,"the DEA schedule reads. Pot's status on the schedule makes institutional investors very uncomfortable.

Adding to that discomfort is the rescission of the Cole Memo this past January directing the Department of Justice to enforce all federal marijuana laws. Attorney General Jeff Sessions also gave pause to the industry and investors. "I reject the idea that America will be a better place if marijuana is sold in every corner store."

Not everyone in the cannabis sector is worried about the DOJ or Sessions. "It's all been Kabuki theater," said Leslie Bocskor, president of cannabis consulting and investment firm Electrum Partners. "If Sessions really wanted to destroy the cannabis industry he would come after a company in California or Colorado or Nevada and bring a RICO action and the documents that would get swept up would include the private placement memos that of course say that growing or possessing cannabis is against the law and the investor is agreeing to invest in a company that is doing just that, financing a drug operation."

The Las Vegas-based Bocskor pauses to catch his breath. "Sessions has no intention of harming the industry. And the agreement that Senator Gardner is talking about is great news for our industry. And there is more, the FDA with GW Pharmaceuticals, McConnell on hemp. I'm already hearing from investors."

Then there is Green Bits, a cannabis retail management company raising $17 million from Tiger Global Management and Casa Verde Capital. Some of Tiger Global's more traditional investments include Netflix NFLX and Domino's Pizza DPZ which could fit with the cannabis lifestyle. Another well-known investor which has jumped into the cannabis space is Peter Thiel's Founder's Fund. The fund invested in one of Seattle-based Privateer Holdings PE funds. Privateer only invests in cannabis companies. 

Yoni Meyer, a partner at Los Angeles-based Casa Verde Capital said he expects valuations to climb as more capital comes into the sector. "Given our unique position in the market, we have a solid understanding of realistic valuations, so we're staying focused on fundamentals," he said. As a rule Casa Verde invests in ancillary businesses and not businesses that are touching the plant. Among the partners in the firm is Calvin Broadus, better known as Snoop Dogg.

But Meyer thought the recent events including those tied to Trump and Boehner were harbingers of more positive sentiments flowing into the cannabis space. "I think Tiger Global's investment into Green Bits is a signal that more mainstream investors are on the way."

The investment by Tiger Global, a hedge fund / private equity vehicle started by Chase Coleman III in 2000, also serves notice to institutional investors who have avoided the cannabis industry. With Tiger Global following Casa Verde into the Green Bits transaction, other funds may have to explain to their limited partners why they remain on the sidelines.

Morgan Paxhia, a managing partner at the San Francisco-based cannabis hedge fund Poseidon Asset Management, says that his firm has been talking about legalization not only being a key to unlocking the door to investors, but also as potent political weapon in the mid-term elections November. "We have been saying that it's kind of a political ace in the hole. A candidate could keep in the pocket, leave it alone if you don't need it, or pull it out if it makes a difference."

The Pew Research Center shows that 61% of Americans believe that the use of marijuana should be legalized. That number jumps to 70% if only millennials are surveyed. So opinion regarding the use of pot is clearly moving into the mainstream. 

Investment in the sector has grown more slowly. "We have been here since 2014, so in some ways we haven't had that much company," Paxhia said. "We have invested in more than 40 companies; we have led a lot of financings. It's been a largely open field for us."

One of changes that could take place is that Poseidon might not have as many investing opportunities and the valuations accompanying those opportunities may be higher. "It's possible that our utility may have only had a five year run," he said.

While investment could ramp up, not everyone is convinved that more investors will pile into the sector. Enter Chet Billingsley, CEO of Mentor Capital Inc., a publically listed cannabis investment firm, generally investing in medical cannabis companies. Billingsley said that while his company has seen a $3 million bump in its capitalization since the parade of positive cannabis news hit, he thinks it will take more than that to bring risk-adverse investors on-board. "It's nice that Booker and Sanders and Schumer have introduced bills that could change things from a legal standpoint," Billingsley said. "But those bills need to pass before things change."

Last week, Senators Cory Booker, D-NJ along with Bernie Sanders, I-Vermont, Kirsten Gillibrand D-NY and Ron Wyden D-Ore introduced the Marijuana Justice Act, a bill that would rescind federal marijuana laws leaving states to decide whether to legalize pot.

 

Ahead of Its Time: How PuraEarth is Redefining the Cannabis Experience

By Taylor Johnson
Source: tucsonweekly.com

Thanks to the legalization of marijuana across various states, perception isn't the only thing that's changing. New state of the art technology allows for optimal control, allowing Master Growers to produce cannabis with specific medical benefits and effects. Want to have deep conversations with friends? Run a 5k? Give a presentation to the board? Enjoy more connected down-time with your kids? There are strains for that.

With this newfound technology also comes a better understanding of this powerful plant's constituents. Cannabis used to come unlabeled in a ziploc bag, but companies like PuraEarth have elevated the playing field by subjecting all of their products to multiple state lab tests and proudly publishes the results for patients. Effectively, remedying the "grey area" with cannabis. Producing medicine patients can trust, that they know is safe. PuraEarth's transparency extends further than testing. Patients can reference the education tab on their website for more information, including how to obtain a medical marijuana patient card. 

Modern-day marijuana patients are able to combine in-depth information with a desired effect, and unleash a plethora of experiences. Sure, this may bring back images of the '70s and '80s "Just Say No" days of anti-pot propaganda, where the plant is misunderstood and stigmatized for encouraging slacker behavior. The old slang about cannabis is changing, and for good reason. Some companies are even encouraging cannabis use at work. Take Flowhub for instance, a Colorado-based software company, who allows employees to consume edibles, juices, and sodas that contain THC. In an interview with CNN, Flowhub founder Kyle Sherman said, "Our philosophy at Flowhub is to get s*** done, If [cannabis] helps our employees get work done, then we don't care if they consume at work." 

Modern, forward-thinking companies aren't the only ones opening up to cannabis use. UltraMarathoner, Carolyn Ford, says cannabis consumption makes her 100+ mile training sessions more bearable. "Running while stoned is therapeutic" Ford says, "It helps me concentrate on small movements of my body." Carolyn Ford isn't the only athlete talking about cannabis. Former Philadelphia Flyers left wing, Riley Cote, said his hockey career was like "getting punched in the face for a living," and he found unmatched pain relief with cannabis. After retiring from professional hockey in 2010, Cote founded the Hemp Heals Foundation, an organization focused on sustainable agriculture and holistic health through cannabis. 

As with all things in life, cannabis is best consumed in moderation. Hal Gibbs, Founder and President of PuraEarth, a cutting edge cannabis concentrates company based in Phoenix, recommends patients start with 1-2 puffs of the Uncut vape cartridge for optimum motivation. "Our vapes are great because patients can easily take small and controlled micro-doses. Pura patients don't worry about wasting medicine, like they might after packing a full bowl or rolling a joint. On top of that, nicotine vapes are becoming increasingly common, so patients are not at risk of standing out with our Uncut vape cartridge product line. There is also no marijuana smell so the (vape) pens are incredibly discrete," Gibbs said. "We encourage our patients to live a life that is fueled by cannabis, with the right combination of knowledge and dose, cannabis can be the spark that lights the flames of success." 

Starting in April of 2018, PuraEarth began their "Puradise" campaign, a movement that encourages it's cannabis patients to live enriched lives with passion and confidence. "Cannabis makes the greens greener and the blues bluer, and releases our patients from the burden of their ailment. I think everyone can benefit from a cannabis lifestyle."

 

Official Line of Hemp Clothing is Now Available at Tillys

By Addison Herron-Wheeler
Source: culturemagazine.com

There are more signs of cannabis normalization every day, and the most recent is that a line of hemp clothing is available for purchase through famous clothing retailer Tillys.

Chiefton Supply Co. is a Colorado-based hemp clothing company that makes stylish, streetwear-style apparel. Recently, Chiefton Supply Co. signed a distribution deal with Tillys to be the company’s first official hemp apparel brand.

According to a press release from Chiefton Supply’s PR company, an exclusive run of the company’s men’s tees will be available online and at 30 Tilly’s retail locations.

“Signing with a national retailer like Tillys is demonstrative of how Chiefton is effectively blending cannabis culture with mainstream lifestyle and fashion,” said Bryan DeHaven, managing director of Chiefton, according to the press release. “This is a tremendous opportunity for us to reach national consumers where they shop. Tillys’ customers are active and trend-setting, and Chiefton’s cutting-edge designs make a statement everywhere—on the trail, at the beach or in the city.”

Chiefton Supply Co. prioritize hemp clothing production and sustainable processing in its designs, making their company a positive representation of the hemp and cannabis community in the mainstream. Their hemp is organically produced and grown using less water and land than cotton, a fact that makes many hemp enthusiasts want to legalize the crop and begin phasing out materials like cotton.

“With its high-profile placement in Tillys stores and on its popular website, Chiefton joins an array of top-tier brands for active lifestyles, including Billabong, Volcom, Rip Curl, Burton and Quiksilver, among many others,” the press release stated.

The implementation of Chiefton Supply Co. into Tilly’s helps normalize hemp on a national basis, and introduces sustainable products to a national chain. Moves like this will help raise the status of the cannabis community as legalization continues to spread.

 

The McConnell Hemp Bill and Federal Preemption

By Rod Knight
Source: journal.cannabislaw

The most notable thing about The Hemp Farming Act of 2018, S. 2667, introduced by Senator McConnell on April 12, 2018 (Hemp Bill), is that it will make hemp lawful throughout the country at both the federal and state levels. This is huge. When advising my clients about industrial hemp we invariably discuss the difficult issue of which states they should avoid. The Hemp Bill fixes that problem.

The state-specific problem is based on the wording of the Agricultural Act of 2014 (Farm Act). A state may enact a pilot industrial hemp research program. The word “may” is crucial, since it does not require a state to create a pilot program. It only authorizes states to do so. If a state creates a pilot program then industrial hemp grown pursuant to the program and having delta-9 tetrahydrocannabinol (THC) levels that do not exceed 0.3% is lawful in the state. To be clear, there are two elements involved: (1) that the hemp be grown pursuant to a state’s pilot program, and (2) that the hemp’s Δ9 THC concentrations do not exceed 0.3% (Legal Limit). I’m always taken aback when people are unaware of the first element. A cannabis plant that does not exceed the Legal Limit is not lawful industrial hemp unless it is also grown pursuant to a state’s pilot program.

Additionally, the practical effect of specific provisions in the FY18 Agriculture, Food and Drug Administration, Rural Development, and Related Agencies Appropriations Act (Budget Act) is to make industrial hemp lawful at the federal level throughout the country. And, generally speaking, industrial hemp grown in one state is lawful in another state that has an industrial hemp pilot program. None of this is new or controversial.

The problematic issue is that since the Farm Act does not require a state to enact a pilot program industrial hemp is not legal at the state level in every state. For this simple reason, the Farm Act does not preempt state law. Industrial hemp is nothing more than unlawful marijuana in states that do not recognize “industrial hemp” as a separate legal category. This causes enormous problems for interstate commerce. Every state’s pilot program is different and some are more restrictive than others. This makes it difficult to determine at times whether industrial hemp from one state is lawful in another. Complicating matters is the fact that some states, such as Georgia, Illinois, and Texas, do not have pilot programs but seem to unofficially tolerate industrial hemp. (Texas policy may soon change.) I keep a running and evolving list of “states to avoid” that I often share with my clients. It’s an imperfect list, but I’ve yet to find a better one. In short, industrial hemp is not lawful under the laws of every state.

The Hemp Bill fixes this problem. Rather than using the term “may”, it removes the requirement that hemp be grown according to a state’s program altogether. Hemp is defined as all parts of the cannabis plant with Δ9 THC concentrations that do not exceed the Legal Limit. The first element of the Farm Act, that it be grown pursuant to a state’s pilot program, is removed. Importantly, unless granted specific approval by the federal government, a state does not regulate hemp. The Hemp Bill states, “A state desiring to have primary regulatory authority over the production of hemp in the state or Indian territory” shall submit a plan. This means that a state does not have primary regulatory authority unless it submits a plan which is approved. The Hemp Bill further states that “nothing in this section prohibits the production of hemp in a state or territory” for which a state plan is not approved. The section that follows this grants the federal government “sole authority” to issue guidelines that relate to the production of hemp.

Taken together, the Hemp Bill triggers federal preemption. Federal law governs hemp unless a state’s plan to regulate it is approved. No longer can a state refuse to enact a hemp program and thereby prohibit its citizens from participating in the hemp industry. If enacted, the Hemp Bill will make hemp legal at both the federal and state level across the country. For an industry that is growing rapidly despite the patchwork of state by state laws, this will be a significant boost.

Rod Kight is a lawyer based in Asheville, NC. He is licensed in North Carolina and Oregon and represents legal cannabis businesses. You can contact him by clicking here.

Kight on Cannabis
84 West Walnut Street
Asheville, NC 28801

 

 

philipp hainke presses hemp and organic binder into furniture collection

By sofia lekka angelopoulou
Source: designboom.com

philipp hainke’s organico utilizes traditional and renewable resources for the development of a new, innovative material. presented during milan design week, the collection of chairs and partitioners combines nature and technology with a material that contributes to a new and sustainable way of thinking about materiality and product life cycles.

 

the unique texture is the result of the manufacturing process

 

 

using an adhesive composed from calcium hydroxide and casein, the designer pressed hemp fibers and shives into solid shapes. through extensive research, the optimal composition and structure was found for a sandwich material with a cover of hemp fiber mat and a core of hemp shives that is stable and light at the same time.

the pieces are designed to function as a group

 

 

in a unique, purposeful way, the objects preserve the archaic character of their resources with a clear design that does not forfeit sensuality. the significance of the project can also be seen in the research of various ways of processing and using the material to introduce a new sustainable method.

prototypes from the design and material experiments

the structure is made out of rattan

made to relax in a natural, eco-friendly environment

technical parts like screw sleeves can be directly integrated in the molding process

the colors are made with natural pigments which are added directly to the binder

the two molded pieces of the chair are equal to save manufacturing costs

the innovative sandwich structure allows a variation of thickness within the piece

the final binder recipe has been developed and improved in a long term research

a selection of material samples from the process

prototypes from the design and material experiments in combination with rattan

 

 

designboom has received this project from our ‘DIY submissions‘ feature, where we welcome our readers to submit their own work for publication. see more project submissions from our readers here.

 

edited by: sofia lekka angelopoulou | designboom

 

 

Could hemp help to beat ovarian cancer?

By Toby Murphy
Source: infosurhoy.com

A group of researchers from Kentucky is dedicated to raising the profile of hemp and its potential health benefits. Following their preliminary studies, they conclude that it may help in the fight against ovarian cancer.

 

Hemp and marijuana are in the same botanical family, but the former doesn’t share the latter’s psychoactive properties.

As one of the earliest plants to be cultivated, hemp has been utilized by humans for thousands of years.

Clothing, paper, ships’ sails, ropes, and shoes have all been made from hemp.

However, for a complex web of reasons, it fell out of favor during the 20th century.

But today, hemp is enjoying somewhat of a Renaissance, and, according to a new raft of studies, it might one day play a role in the treatment of ovarian cancer.

In particular, the laboratory of Wasana Sumanasekera — located at the Sullivan University College of Pharmacy in Louisville, KY — is currently a hotbed of research into hemp’s potential ability to fight cancer.

A new strain of hemp

Earlier this week, two of the laboratory’s researchers — Sara Biela and Chase Turner — presented their most recent findings at the American Society for Biochemistry and Molecular Biology annual meeting, which ran alongside the 2018 Experimental Biology meeting, held in San Diego, CA.

Nobody can have missed cannabis’s slow and steady rise into mainstream medicine. Hemp, however, has been all but neglected.

“Hemp, like marijuana,” explains Biela, “contains therapeutically valuable components such as cannabidiol, cannabinol, and tetrahydrocannabinol. However, unlike marijuana, hemp’s therapeutic ability has not been studied in detail.”

Biela and Turner are determined to turn this around. For their experiments, they used a cultivated strain of hemp called KY hemp, which is grown in Kentucky.

It is designed to contain optimal levels of therapeutic ingredients and is grown in an environment that limits the possibility of contamination.

Hemp and ovarian cancer metastasis

In the first study to be presented, the researchers added KY hemp to cultured ovarian cancer cells. As expected, the hemp reduced the cells’ ability to migrate. Similar studies have been carried out using cannabidiol, but this is the first time that the anti-migration powers of hemp have been studied.

The scientists hope that, potentially, the extract might one day be useful for slowing or preventing ovarian cancer metastasis. The study authors write, “Based on the data here, we conclude that KY hemp has significant anti-metastatic properties against ovarian cancer.”

In the second study, they set out to explore how KY hemp might actively protect against ovarian cancer. Specifically, the scientists were interested in interleukin IL-1 beta, a chemical involved in inflammation that is thought to help cancer progress.

The authors write, “We hypothesized that the hemp-induced modulation of interleukin-1 beta production may play a role in hemp-induced anti-cancer effects.”

As predicted, the hemp reduced the levels of interleukin IL-1 beta that were produced. This, they hope, might form a novel way to approach future cancer therapies.

“Our findings from this research, as well as prior research, show that KY hemp slows ovarian cancer comparable to, or even better than, the current ovarian cancer drug Cisplatin.”

Chase Turner

Turner continues, “Since Cisplatin exhibits high toxicity, we anticipate that hemp would carry less side effects. However, that needs to be tested in the future.”

The two scientists plan to continue their investigations into hemp and cancer. Soon, they hope to take their research into a mouse model: the next step on the long road to human trials.

Although these studies are preliminary, they underline the importance of not being bound to one single approach or compound. Therefore, testing as many of the available raw materials as possible is a sensible plan.