By Simon Cimiluca Radzins
2016 has been an eventful and interesting year for the world; from a new president-elect to Simone Biles. But what about the progress in the cannabis industry? 2016 has been a remarkable year for the industry. Here’s an overview of my top 10 Cannabis Events of 2016.
Number 10: CBD and the DEA
Ever since Charlotte’s Web was developed in 2011, the CBD market has been anything but stagnant. Many states, including Kentucky, Alabama, Texas, and Utah have allowed CBD (Less than .3% THC) to be given to qualified patients. States that have legalized cannabis for medical use also are providing patients with much-needed medicine. This market has been thriving and many in the industry see the CBD and THC markets to be very different. In fact, CBD operators have been shipping across state lines knowing that CBD derived from hemp (less than .3%) is not considered a Schedule 1 Drug.
Unfortunately, the Drug Enforcement Agency (DEA) does not see it this way. In December 2016, the DEA clarified its position on CBD, “Extracts of marihuana will continue to be treated as Schedule I controlled substances,” according to the DEA notice. Although mostly a record keeping notice, one thing is certain, CBD pet treats and CBD oil producers should get brushed up on what 280E is and continue to lobby in Washington.
Number 9: DEA denies rescheduling
The DEA has been petitioned more than once to reschedule or de-schedule cannabis from its current classification as a Schedule 1 Drug under the Controlled Substance Act. There were heavy rumors that the DEA was going to reschedule cannabis in early 2016. On August 11, 2016 the DEA denied two petitions to reschedule cannabis under the Controlled Substances Act (CSA). Cannabis is still considered just as dangerous as heroin with no medical benefits. Sigh.
Number 8: Billions and Billions
Cannabis is a multi-billion dollar industry and 2016 was the first year that, according to Viridian Capital, more than $1 billion has been raised in the cannabis industry. According to MJ Biz Daily 2016 fact book, “the portion of new companies backed primarily with founders’ own savings and debt is at its lowest point ever, 72%, while nearly half of investors in privately held companies plan to invest at least $10 million each in 2016.” In that same report, MJ Biz daily states, “The total estimated annual demand for recreational cannabis alone in the United States is about $40-$45 billion, exceeding that of craft beer, wine and organic food.”
It was very clear that there was a new onset of capital at the MJ Biz Conference in Vegas in November 2016. It was the largest trade show to date, with over 10,000 cannabis professionals in attendance.
Number 7: The IPOS
Publicly traded cannabis companies have been traded on the pink sheets/OTCB market for quite some time. Pink Sheet requirements aren’t as stringent as other major stock exchanges. In November 2016, Innovative Industrial Properties, a cannabis real estate investment trust filed an IPO on the NYSE. The Company plans to buy industrial properties and lease them to licensed cultivators. Their stock is currently hovering around $17.50 a share.
Number 6: Onsite Consumption
Colorado was the first state to legalize and regulate adult use of cannabis, and Denver is the first city to allow for on site cannabis consumption in bars and cafes. A cannabis consumer’s dream — to be able to consume cannabis at a venue with friends and family. Initiative 300 passed in November 2016, and allows bars to decide if patrons can bring and consume their own cannabis. Cannabis consumption will be allowed in establishments or areas within establishments that are restricted to adults 21 years of age or older, and not visible to individuals outside of the restricted areas where consumption is allowed. Sign me up, please!
Number 5: HMBLT
The first time I saw it, it was at a cannabis startup event in Oakland this September. There was a massive line just to get this free goodie. The second time I saw it, it was in Vegas at the MJ Biz Conference, the third time I saw it was in a conference room in East LA.
Awarded in the list of Best Inventions by Time Magazine, this delivery device has sleek features, a rounded shape, and almost resembles a product line of Apple. White packaging with red, blue, or green design, the hmbldt’s delivery devices are designed exclusively for their formulas to ensure a safe, controlled and accurate dose. And how do they label their products? With the simple word of relief, calm, and bliss. Say good-bye to the days of holding down the button to get your perfect toke.
Number 4: Oregon regulates cannabis
As a native Oregonian, I was thrilled when my state passed measure 91 and within less than 12 months allowed adults over 21 to purchase cannabis in a dispensary. Talk about a way to move quickly. On top of that, Oregon has one of the most informative governmental websites I’ve seen, which details out specific key dates, a start-up business guide to help the cannabis business owner and a very cool interactive map. But to all greatness, comes the crippling clash between regulators and business owners. Due to the newness of the industry, Oregon faced several hiccups.
March 2016 ended up being very difficult for cannabis processors in Oregon, when the Oregon Health Authority warned Oregon’s medical marijuana dispensaries not to accept cannabis extracts from unlicensed processors. This was before processing licenses were even awarded! This delay, although reversed with a lot of push back, forced cannabis processors to shut down operations and leave the shelves dry in Oregon.
Fast forward to the one year anniversary of legal cannabis for adults. On Oct 1, the Oregon Liquor Control Commission implemented new rules governing the laboratory analysis of cannabis products. Oregon law requires that all cannabis products be lab tested before they can be sold at a dispensary. The onerous of lab tasting is on the cannabis cultivator, processor, or wholesaler, not the retailer. The Oct 1 law made it even more onerous. Couple this with less than 10 licensed lab facilities, you’ve got a supply and demand problem. Companies had to wait up to 6 weeks to get their adult use products tested and certified.
The result? Empty shelves in dispensaries, wholesalers with copious amounts of untested inventory and a lack of sales, just because they were waiting to get the final seal of approval. Luckily, cannabis operators fought back , which resulted in the testing requirements got pushed back until later in 2017. Even with all that chaos, Oregon is expected to collect over $50 million in tax revenue in 2016.
Number 3: Globalization
Globalization makes the world turn around. For quite some time, it’s been apparent that cannabis is an international industry, with the only thing stopping it…legality! In 2016, Canada, Ireland, Australia, Jamaica, Colombia, Australia, and Germany approved measures for its medicinal use this year. I was in Costa Rica this summer presenting on the benefits of legalization, fingers crossed they will regulate in 2017.
Number 2: Legalization
After November 8, 2016, the United States went from 17 million people to 87 million people living in states where cannabis was legal. California, Nevada, Massachusetts, and Maine passed the adult use of cannabis and Florida, Arkansas, North Dakota, and Montana passed medical use of cannabis.
Number 1: Nobody died from Cannabis
As researchers and law enforcement still continue to develop methods for understanding how cannabis use impacts driving and parent’s still worry if their children’s Halloween candy will be swamped with some infused treats, one thing is certain in 2016: Nobody died from having too much cannabis!