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How to Manage Risks in the Cannabis Industry

It is no secret that the cannabis industry has a lot of associated risks that business owners need to be able to preempt and take the necessary steps to protect themselves from. There are different types of risks that should be evaluated in order to ensure your business thrives. Here are a few types of risk and how you can protect your business from them.

General Liability

A cannabis business is not much different than any other business when it comes to operation risk– Liability insurance (also known as Commercial General Business Liability) protects a company’s assets and pays for obligations – medical costs, for example –incurred if someone gets hurt on your property or when there are property damages or injuries caused by you or your employees and is a good starting point for insurance for any business (not just cannabis business).

Legal and Statutory Risks

These are the most common risks that your cannabis business can be exposed to. There are numerous rules and regulations that guide the conduct of business in the industry. It does not help that each state in the country has their own specific laws too. Therefore, it goes without saying that you should be interested in protecting your business from these risks. A good way to do this is to seek for help from professionals who understand the industry and will be able to provide solutions that best suit your business. You can hire compliance officers to help you manage these risks. They will also handle the policies of your company more efficiently especially because they have the needed knowledge and they will also be able to look at your company’s situation from an objective perspective, thereby ensuring that there are no oversights due to any form of bias.

Contractual Risks

These involves risks due to contracts that may include local zoning laws, land ownership disputes and these risks are also common. Contracts usually contain a lot of complicated legal jargon that can be properly interpreted by a competent legal counsel. It is best that you seek extra help from a local licensed attorney even though it may be expensive. However, you should view it as an investment that will be beneficial in the long run. Additionally, an attorney will be able to help you write your risk management policies and they will also scrutinize every contract to ensure that the interest of your company is protected at all times. They will also help you establish the standard operating procedures with respect to the content of the contract, access to the contract, authority to modify contract and of course, termination of contract.

Reputation Risk

The public’s perception of your company is as important as what your company does, or even more important in some situations. In today’s world, the power of social media should not be underestimated especially because any corporate decision, actions or decisions can become public knowledge within minutes. It is therefore important that companies strive to maintain a good public image and avoid any risks posed by a bad reputation. It is advisable that you enforce strong corporate values and ensure that your employees believe and adopt them as well. In addition, it is important that you scrutinize every step of your production and supply chain for possible risks to your reputation and formulate strategies that will be used to eliminate or reduce them.

Product liability

This is one of the most important risks that a cannabis business will have to deal with. The provisions of the law regarding product liability varies from state to state, but the implications are generally the same thing. The law holds the producers, retailers and distributors accountable for any product liability. It cites strict liability, oversight, implied or express warranties and falsification or misrepresentation of concepts. This is a huge cause for concern among retailers and it results in them mounting pressure on the producers to improve on and maintain the quality of their products. Product liability is quite expensive and it is estimated that damage awards could be up to $350,000. This liability is most important for products that are ingested like edible products. The good news is that there are several ways by which you can reduce the risks of product liability.

Comprehensive Documentation

Documentation is one of the most important steps in ensuring your business has complete protection from the risks posed by product liability. With proper documentation, you can prove that your company followed all the good quality production guidelines, in the case of a lawsuit or even for inspections. Ensure that you have proper batch identification and also have informative labels on every product, bearing all the necessary information which include content, strength, date of manufacture, batch number, directions for use, storage advice and expiration date. It should also contain warnings where necessary and they should be clearly spelt out in a way that they can be easily understood. Proper documentation makes it easier to track a product in case of any problems down the line.

Take advantage of the product life cycle

Every product has a life cycle that has different stages which include pre-production, production, and post-production. When each of these stages are treated individually, it is a whole lot easier to figure out the different possible risks at each stage and how best to prevent them. It also makes it easier to improve on the quality of the product. This can be achieved by ensuring the design is flawless, the process is controlled and the products pass proper inspection tests before being released for consumption. Every step of the production process is subjected to routine inspections to ensure the final product meets all quality requirements.

Independent testing

It is advisable that every batch of your product should be inspected by a third party with no ties to your company that may result in bias. The aim of the testing is to ascertain the quality of the product and to ensure that the product is wholesome and free of contaminants and unwanted ingredients. After the results of the test have been obtained, it is also recommended that the test facility keep small samples of each tested batch for three months as “controlled” samples.

There are several other tips that would be helpful in protecting your business from the risks due to product liability. Your insurance provider will be able to provide more information. However, here are a few extra tips to help protect your business: Use a batch number for products in order to easily identify a lot that needs to be recalled

  • Use packaging that prevents tampering and preserves the quality of the product.
  • Make use of an efficient system that can capture patient information, product testing, and sample recall.
  • Ensure your retailers and vendors have their own insurance cover

In conclusion, the cannabis industry has a lot of risks, but by taking the necessary steps, you can preempt the risks and protect your business. With the right information and by securing experienced and professional help, your business will be better off for it in the long run.

December 3, 2020 / by / in
Federal Cannabis Legalization: Coming Soon?

The cannabis industry needs federal legalization, and it needs this legislation now. Although cannabis is legal in some form in most states, the lack of federal approval creates many unnecessary roadblocks to success, including problems with financing, insurance, supply chains, investment, etc. The patchwork of state laws is harming the industry and stunting its growth.

Two-thirds of the American public is firmly behind the legalization of cannabis, but there is a political divide. Nearly 80% of Democrats or those leaning Democrat support legalization while only 55% of Republicans and those leaning Republican do. So more Democrats in power should make passing a federal law easier. 

The results of the latest election improve the odds of federal legalization, although it will take some months to be certain. The Democrats will control the executive branch and the House in January 2021. Senate control depends on two seats in Georgia that will not be determined until January. Voters in six states passed positive cannabis laws. With more states legalizing cannabis, it has a better chance of gaining federal approval, but success is not certain. In the short term, passage of the MORE Act would ease the way for cannabis entrepreneurs and VA doctors.

Federal Law Proposals

Several proposed laws are currently before Congress, and House Majority Leader Steny Hoyer (D) announced that one such law, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, will be brought to the floor in December. While other Marijuana reform acts are currently before Congress, such as the Medical Marijuana Research Act, the MORE Act is considered the most comprehensive and important one up for vote. It would remove cannabis from the Controlled Substances Act, which would reduce the friction between state and federal law. The act would also let VA Administration physicians recommend medical marijuana to vets living in states where it is legal. Also, it would let states expunge the records of people with low-level cannabis offenses.

 And while the act is expected to eventually pass the House, it’s unclear if that will happen in December or be postponed until 2021. Some lawmakers are worried about focusing on marijuana legislation before they pass another COVID-19 relief bill. 

Passage in the Senate will be more difficult if the leadership remains the same and clings to its current position on advancing and passing the act. In fact, progress may be delayed until early 2021.

State Law Changes

As more and more states embrace legalization, it becomes harder to reject it on the federal level. five states just voted for more favorable cannabis laws this election, including Arizona, Mississippi, Montana, New Jersey, and South Dakota. Now, a total of 15 states has approved cannabis for adult recreational use. Most other states allow some level of medical use. Only seven states, Idaho, Wyoming, Nebraska, Kansas, Tennessee, South Carolina and Alabama, ban all marijuana use.

  • In Arizona, voters voted to allow adults aged 21 or over to possess up to one ounce of marijuana and be allowed to cultivate a maximum of six plants for personal use. Voters rejected this same initiative four years ago. 
  • Mississippi voted to allow medical marijuana – up to 2.5 ounces per 14-day-period for certain debilitating conditions. 
  • Conservative Montana passed a resolution to legalize marijuana for those aged 21 or over. 
  • New Jersey voters passed a resolution for legalizing adult use, and the legislature is on a fast track to making that happen, according to Governor Phil Murphy, an advocate of the measure.
  • South Dakota went from banning all marijuana use to making recreational use legal for those 21 or over. Citizens with debilitating medical conditions will be able to purchase marijuana as well. 

With many states embracing legalization, US legislators don’t have much of a rationale for maintaining the federal ban. In fact, the general feeling in the US is that it’s past time to take action and change federal law. 

Senate Positions on Legalization

So far this year, the Democrats have failed to take control of the Senate despite polling that indicated they would. Currently, the two parties are tied at 48 senators. However, in the two Georgia Senate races, no candidate managed to get the mandatory 50% of the vote needed to win. According to Georgia law, the state must now hold a runoff election to determine the winners. So in January 2021, voters will cast their ballots in two Senate races that will have an enormous impact on the US government and its stance on cannabis.

Democratic Senate control would probably lead to federal legalization because Chuck Schumer would become the Majority Leader. He has already pledged support for a cannabis bill and would make it a priority. Nancy Pelosi, the Democratic Speaker of the House, has made similar promises. If a Democratic House and Senate passed legislation, the pressure on the President.

Most Republican legislators support legalization, but the party leadership does not. Current Majority Leader, Mitch McConnell, is not a supporter of a bill and would be unlikely to even bring one to the floor for a vote. If Republicans keep control of the Senate, the chances of passing a federal law are slim. For instance, David Perdue, one of the Republican Georgia candidates, wants to leave cannabis laws to the states and not take federal action. A Democratic candidate, Jon Ossoff, believes Congress should pass a federal law to legalize marijuana. Georgia could well determine cannabis policy for the foreseeable future. 

The End Game

The cannabis industry would become more profitable and attract more investors if it were legal on the federal level. Currently, the differences between state law and federal law pose many costly complications, including funding and supply problems. Federally insured banks cannot provide traditional loans, and transporting the product across state lines raises tricky legal issues. Also, selling cannabis for recreational use is a simpler process than selling medical marijuana, which comes with mounds of red tape. In fact, the reasons for federal legalization far outweigh the reasons against it.

The prejudices against cannabis are wearing away, and most Americans accept it for both medical and recreational use. Still, there are holdouts, and many of those are in government, particularly in the leadership.

November 12, 2020 / by / in
Legal Cannabis Landscape Expands as 2020 Ballot Initiatives Pass

Counting ballots for the 2020 election took much longer than usual because many states allowed residents to cast their votes by mail to prevent COVID-19 from spreading. While many races remained in limbo for days, new voter initiatives against cannabis prohibition took an early lead. Voters seem to have made a clear statement: they may differ on politics and political parties, but most of them want an end to strict laws that punish people for using medical and recreational marijuana.

Voters in five states (Arizona, Mississippi, Montana, New Jersey, and South Dakota) approved ballot initiates that will lead to an expanded landscape for legal cannabis. It will take some time for states to write the regulations that will let consumers purchase cannabis from approved dispensaries. Even though it will likely take a state like South Dakota up to two years to prepare for the legal changes, investors and business owners in the cannabis industry need to take action now before they get crowded out of emerging markets.

A General Shift Away From Cannabis Prohibition in the United States

A few decades ago, cannabis legalization looked nearly impossible to many reform advocates. Even in 2020, the federal government considers cannabis possession illegal for any reason, including medical reasons.

After the 2020 election, 15 states have legalized recreational cannabis for adults. Once the newest states approve their regulatory processes, adults 21 and over will have access to quality, legal cannabis products through licensed dispensaries.

It’s important to note that these states do not always share political ideologies. South Dakota and Montana voted heavily in favor of Republican candidates in 2020. New Jersey favored Democrat candidates by a wide margin. Democrats and Republicans ran tight campaigns in Arizona that lead to a slight lead for the Democrats. Across political ideologies, people recognize that cannabis prohibition causes more problems than it solves. It simply makes more sense to write laws that give adults access while generating taxes for state governments.

Medical marijuana has become even more widely accepted. In 2020, 35 states have legal medical marijuana. Washington, DC, Guam, Puerto Rico, the Northern Marina Islands, and the U.S. Virgin Islands have also legalized medical cannabis.

How the 2020 Election Will Shape the Future of Cannabis Consumption

Citing the National Academy of Sciences, Drug Policy Alliance notes that decriminalizing cannabis doesn’t necessarily increase marijuana usage. People who haven’t used cannabis may purchase edibles, flowers, and other products out of curiosity. Few of them remain steady buyers, though.

Legalizing cannabis can create the appearance of increased use, though, by bringing black market buyers into regulated dispensaries. When cannabis is illegal, authorities can only estimate the number of users by extrapolating from arrests and citations. The approach may offer a ballpark figure, but it will never give an accurate number of cannabis users.

The 2020 election will make it easier and safer for cannabis users to purchase the products they use. Many will also discover opportunities to use new products, such as concentrates and edibles that do not require smoking.

Expanding cannabis legality also moves money from the black market to regulated dispensaries that must follow rigorous laws regarding who gets to buy products and how products get labeled. In the black market, buyers don’t know what they get from dealers. In an open, legal market, customers can make informed decisions by comparing the levels of THC, CBD, and other chemicals to pick an option that matches their preferences.

Reducing the size of the black market means that more outdoor and indoor farms can start growing cannabis openly within the United States. Instead of supporting criminals trafficking drugs across borders, customers can support businesses that think about health and giving back to communities.

Anyone interested in benefiting from the expanding landscape of legal cannabis should begin looking for opportunities now before their competitors take advantage of the best real estate options, dispensary locations, and limited licenses.

Arizona Passes Ballot Initiative for Recreational Cannabis (search Arizona Listings)

Quick facts about Arizona and cannabis laws:

  • Arizona has a population of about 7.279 million people.
  • A recreational cannabis ballot initiative failed to pass in 2016.
  • Arizona Proposition 207 legalized cannabis with approval from nearly 60% of voters.

Arizona has a diverse ecosystem that makes it suitable for indoor and outdoor cannabis cultivation. Some parts of Arizona have become essential to growing grapes for wine. Outdoor farms could play a similar role in growing cannabis for consumers within the state. With such a large population, entrepreneurs have ample opportunities to earn money from cannabis grown and sold in Arizona.

Mississippi Voters Pass Law for Medical Cannabis (Search Mississippi Listings)

Quick facts about Mississippi and cannabis laws:

  • Mississippi has a population of about 3.15 million people.
  • 2020 ballots included two voter initiatives for medical cannabis.
  • Initiative 65 offered a more lenient approach to Alternative 65A offered by the state legislature.
  • Initiative 65 passed with 74% of voters approving.

Passing medical marijuana will give patients access to the cannabis products they need to feel better while undergoing treatments for numerous conditions, including cancer and PTSD. Typically, medical marijuana has stricter regulations than recreational cannabis. Still, cultivators and sellers have opportunities to earn money while helping patients choose products that treat their unique conditions.

Montana Voters Pass Legal Cannabis Initiatives (Search Montana Listings)

Quick facts about Montana and cannabis laws:

  • Montana has a population of about 1 million people.
  • Montana passed medical marijuana laws in 2004 and survived a 2011 attempted repeal.
  • Nearly 57% of Montana’s voters chose to legalize recreational cannabis for adults.

Montana passed its medical marijuana law more than a dozen years ago. Since then, it has overcome several attempts to repeal or limit the law. Now, Montana voters have decided that they want to legalize recreational cannabis for adults 21 and over.

Montana’s frosty winters probably mean that most cannabis cultivators in the state will opt for indoor operations that let them control factors like temperature, soil acidity, and light exposure.

Medical dispensaries might start selling recreational products, too. Bringing underground market buyers into the public space, however, will likely mean that more dispensaries open to serve the needs of recreational users.

New Jersey Voters Legalize Recreational Cannabis (Search New Jersey Listings)

Quick facts about New Jersey and cannabis laws:

  • New Jersey has a population of about 8.88 million people.
  • New Jersey passed medical marijuana laws in 2010 that applied to people with a limited number of health conditions.
  • The state has increased the number of qualifying conditions since 2010.
  • Nearly 67% of New Jersey voters approved a constitutional amendment for cannabis possession, cultivation, and sales.

New Jersey’s decision to legalize recreational cannabis will have a huge impact on surrounding states, especially New York.

New Jersey already has a large population that will support a growing cannabis industry. Inevitably, people from neighboring states will cross the border to buy legally. New York, for example, has not been able to end prohibition on recreational cannabis (although it does offer medical marijuana).

Now that New Jersey has made the step to full legalization, New York will feel pressured to follow the state’s lead. Otherwise, New York will lose tax revenues as people hop a bridge to buy diverse cannabis products from legal dispensaries.

South Dakota Passes Ballot Initiative Legalizing Cannabis (Search South Dakota Listings)

Quick facts about South Dakota and cannabis laws:

  • South Dakota has a population of about 885,000 people.
  • An attempted 2018 initiative for medical marijuana did not receive enough valid signatures to get placed on the ballot.
  • Slightly more than 54% of South Dakota voters approved a constitutional amendment legalizing recreational cannabis.

South Dakota voters surprised the nation when they passed a constitutional amendment legalizing recreational cannabis. It’s surprising because cannabis advocates in the state couldn’t get enough signatures in 2018 to even get a medical marijuana initiative on the ballot.

South Dakota has a climate similar to Montana’s, so most cultivators will choose indoor grows over farmland.

What Expanding Cannabis Legality Means for Investors

Expanding cannabis legality across the country means that investors need to start exploring their real estate options as soon as possible. Cities throughout the United States have seen higher real estate values after passing recreational cannabis laws. Even home prices have skyrocketed in recent years. One study shows that legalizing retail cannabis in Colorado contributed to a 6% increase in housing values.

Making money from newly legal cannabis markets requires investing in real estate for growing and selling products. In some states, investors have spent millions on farmland and warehouses that get retrofitted to grow marijuana. Retail space also comes at a premium when selling legal cannabis.

States will need some time to determine how they want to regulate new markets. That gives investors some leeway before real estate prices increase. For many people, it makes sense to buy property for cultivating and selling marijuana now instead of waiting for the state to solidify their regulatory requirements. Investors that wait will end up spending more money on properties that they could have gotten for considerably lower prices today.

November 8, 2020 / by / in
Cannabis and Real Estate – The All-Inclusive Guide

The legal cannabis industry started attracting big money during the “second wave of decriminalization.” During the early 2000s, several states decriminalized cannabis possessions for personal use. The plant hadn’t become legal, but savvy entrepreneurs could see the tide changing.

By 2012, two states (Colorado and Washington) legalized recreational cannabis. By 2020, 11 states and Washington, DC, had made it legal to sell and possess medical and recreational cannabis. Businesses selling cannabis have to follow strict guidelines, but everyone from consumers to state governments benefits from looser laws governing marijuana sales.

Many states are still pushing to pass laws that will allow the sale of recreational marijuana. For many people, nationwide legalization looks like an inevitability. It may have to happen state by state, but eventually, all adults 21 and over will have access to legal, safe cannabis for medicinal and personal use.

The room for growth has fueled much of the interest in cannabis as an industry. Smart investors know that they will make the most money by entering an emerging industry early and riding the growth to profits. The fact that plenty of states still don’t allow cannabis sales could actually encourage more people to invest in the industry. Right now, it looks like there’s unlimited room for growth. Who wouldn’t want a piece of that?

COVID quarantines make cannabis real estate even more attractive as states deem cannabis an essential business. Cannabis has become so critical to the health of individuals and economies that states like California, Colorado, and Illinois allowed delivery and curbside sales.

Legal Cannabis Has Had a Remarkable Impact on Real Estate

It’s not surprising that so many companies have entered the legal cannabis industry. Growth, however, has made some unexpected changes. Certain types of real estate, for example, have become significantly more valuable as places to grow crops and distribute products through storefronts.

The Jump in Urban and Suburban Real Estate Values

Typically, old, cinderblock warehouses don’t attract much attention from potential buyers. The building might work as a storage facility, but not much else. Until that is, a state legalizes cannabis. Suddenly, that old warehouse on the edge of town looks quite appealing. With a little retrofitting, a burgeoning cannabis company can turn it into a grow operation that produces hundreds of pounds of cannabis.

In 2017, the New York Times described how marijuana was affecting real estate prices around the country. The article described old gardening centers and warehouses recently turned into high-security grow operations. Some of the money to fund these new operations came from individual entrepreneurs. A lot of the cash came from Wall Street, though. When real estate companies start raking in money, traders on the New York Stock Exchange take notice.

As more property owners realized that they could turn their urban and suburban buildings into indoor farms, they started charging higher prices for rent. In Denver, the price for warehouse space grew by more than 50% over 5 years. Amazingly, Denver had more cannabis stores that Starbucks coffee shops.

While some municipalities in states with legal cannabis have rejected licenses for stores to operate, most neighborhoods welcome dispensaries that keep a low profile and follow the law. After all, two-thirds of Americans support marijuana legalization. To a lot of people, a new dispensary doesn’t seem that much different than a new liquor store. It’s just another opportunity for the community to thrive from the success of local businesses.

Since property owners realize that they can charge cannabis companies higher prices, dispensaries have to charge slightly more for their products. The prices tend to come down a bit over time, though.

When an area first introduces legal cannabis to consumers, businesses get rushed by people curious to learn about their options. It doesn’t take long for the novelty to wear off. Once that happens, growers and sellers can make accurate decisions about how much product they need. Even when prices remain higher than black market cannabis, many consumers are willing to spend extra money to know that they’re getting reliable products from local sources.

The Rural Boom for Cannabis Real Estate

Growing cannabis indoors has several advantages. Cultivators can grow more crops because they have control over factors like moisture, temperature, lighting, and fertilizers. A rainy or dry season won’t stop them from producing a full crop of profitable cannabis.

Still, sellers can charge a premium for cannabis grown outdoors. Some consumers say that they enjoy the smell and flavor of outdoor cannabis more than cannabis grown inside carefully-controlled warehouses.

Plus, farmers around the country are looking for cash crops. Kentucky makes an excellent example. The state’s farmers once relied on tobacco as a top earner. As the number of smokers falls, though, tobacco has lost much of its appeal as a crop. Mitch McConnell played a key role in passing legislation that legalized hemp production. Part of his motivation was to provide a new cash crop for agricultural areas of his state.

Kentucky farmers still cannot grow marijuana, but other states’ farmers have benefited. As a result, owning farmland in places like Oregon and California has become a way to generate significant income.

Cannabis Real Estate Must Meet Strict Regulations

Looser laws mean that more companies can cultivate and sell cannabis products to adults 21 years and older, but businesses still have to follow strict regulations.

Buying or renting cannabis real estate quickly becomes confusing for new entrepreneurs because the laws vary so much from location to location. Even within a state, each city can establish unique rules that influence tax rates, advertising options, security requirements, and licensing.

A look at three cities in Southern California shows how much rules can vary within just 100 miles. Keep in mind that the state of California charges a 15% tax for cannabis cultivation and consumer sales (meaning that farmers selling to dispensaries and consumers buying from dispensaries have to pay). The taxes listed for each city are in addition to the state tax.

Desert Hot Springs, CA

Desert Hot Springs considers cannabis a vital part of its economy. The city, which is about 1.5 hours outside of Los Angeles, has plenty of room for cannabis cultivation.

Desert Hot Springs charges 10% for all cannabis sales. It gets more complicated for cultivators, though.

Farmers pay $22.50 twice a year per square foot of cultivation up to 3,000 square feet. Cultivation over the 3,000 square feet costs $10.20 per square foot, again twice per year. A -farmer cultivating 3,000 square feet would pay the city $153,000 over the year.

All cultivators and dispensaries in Desert Hot Springs must get licensed by the State of California. Additionally all cultivation facilities must be located in the city’s Light Industrial Zoning District. Dispensaries can only operate in Commercial Zoning Districts, which essentially means that few cannabis storefronts exist close to residential neighborhoods.

Los Angeles, CA

Los Angeles has a slightly less confusing tax system. According to the Los Angeles Office of Finance:

  • Medical cannabis sales carry a 5% tax
  • Recreational cannabis has a 10% tax rate
  • Cannabis cultivators pay a 20% rate

Cannabis dispensaries in LA also have to follow regulations to maintain their licenses. For instance, medical and recreational stores must:

  • Pay a $5,000 bond to the State of California
  • Employ at least one security guard during business hours.
  • Only operate in jurisdictions that give them permission.
  • Avoid advertising within 1,000 feet of a school, daycare, playground, or youth center.

It’s important to remember that there’s a difference between Los Angeles County and Los Angeles. Unincorporated areas of Los Angeles County can establish their own rules. Anyone who wants to purchase, rent, or sell cannabis real estate in unincorporated areas should reach out to the local government for guidance.

Long Beach, CA

Long Beach has a straightforward taxing system that charges 10.25% on top of the state tax. That makes purchasing cannabis rather easy and affordable.

Entrepreneurs need to consider other factors when buying, selling, or renting real estate for cannabis use. For instance, Long Beach forbids outdoor cannabis cultivation. No company can legally grow marijuana unless it has an indoor facility that can support the plants.

Additionally:

  • No medical cannabis retail store can have a location within 1,000 feet of an existing cannabis dispensary.
  • Companies must have independent laboratories test their cannabis for pesticides and contaminants.
  • Dispensaries cannot operate within 1,000 feet of a school, daycare center, playground, or youth center.

Long Beach does have a Cannabis Social Equity Program that helps budding entrepreneurs access the funds they need to start businesses.

Getting Information About Cannabis Property Listings

Obviously, entrepreneurs have to consider a lot of factors when purchasing cannabis real estate. The long list of rules can make it challenging for people. It certainly doesn’t help that each state and city can set its own laws. Even small changes from city to city can affect the success of a cannabis farm or dispensary.

Currently, federal banking laws add a thick layer of complexity and uncertainty to investors that want to support the cannabis industry. Banks worry about extending lines of credit to cannabis businesses. Property owners may also worry about leasing or selling real estate to businesses in the cannabis industry. If legalized, those uncertainties would largely evaporate and the owners of cannabis real estate would see a huge spike in their property values.

At least six states (Arizona, Arkansas, Florida, Missouri, New Jersey, and South Dakota) are trying to expand cannabis legalization during 2020. Some of those states probably won’t succeed in 2020. By 2024, though, two-fifths of the U.S. will likely have laws that allow the sale of recreational marijuana. That would increase the number of states with recreational cannabis from 11 to 20 within a few years. It’s practically impossible to overestimate the opportunity that these legal changes will make within in the real estate and cannabis industries.

The good news is that no one has to go into the cannabis industry without help from experienced professionals.

420property.com is the best place for cannabis real estate. You can use the website to research cannabis farmland for sale, cannabis businesses for sale, and properties that you can use to cultivate cannabis. In this case, the word “cannabis” applies to CBD hemp and THC marijuana. The state that you want to operate may have laws that make hemp more feasible than marijuana. Regardless, 420property.com can help you find the right real estate for your project.

If you already own cannabis real estate, you can list the property on 420property.com. It’s the right place to find serious investors who want to make money using your real estate to grow or sell cannabis.

You can also use 420property.com to:

  • Connect with appraisers, business consultants, real estate agents, and lawyers.
  • Find investment opportunities in the cannabis industry.
  • Get financing to fund commercial real estate, equipment, and capital.
  • Compare your insurance options to make sure you have policies for crop failure, workers’ compensation, general liability, product liability, product recalls, and equipment failure.
  • Advertise your cannabis real estate listings to find an option within your price range.

The cannabis industry stands to grow quickly over the next decade. Investors that purchase real estate now stand to earn the most money. Whether you want to buy cannabis real estate that’s right for your business plan or you need to sell a piece of land to someone willing to pay its true value, 420property.com has the features to put you on the right path to success.

June 2, 2020 / by / in
Selling a Cannabis Business – Things to Consider

Selling a cannabis business can generate significant profits that fund future companies or help entrepreneurs find financial freedom. Like selling any type of business, though, owners need to consider several factors before they even start to approach potential buyers.

The following guide will help anyone selling a cannabis business make smart choices that lead to a smooth transaction and tidy profits.

Evaluate the Value Before You Sell a Cannabis Business

The value of cannabis businesses can vary significantly. A successful dispensary may earn strong profits without having exceptional value. Before anyone can sell a cannabis business, it makes sense to evaluate all of the company’s profit potential and the value of its assets.

The Value of Assets

A cannabis business’s assets may include:

  • Products currently in stock, such as cannabis flowers, tinctures, and edibles.
  • Equipment used to make cannabis concentrates.
  • Farmland used to grow cannabis, hemp, and related products.
  • Buildings, such as storefronts, warehouses, and barns.
  • Computers and software that track inventory, invoices, receipts, and how many hours employees work.
  • Items required by states, such as identification card readers and security systems.

Every asset counts, so make sure they all get included in the business’s valuation.

The Value of Current and Future Sales

A cannabis business’s value doesn’t end with the assets that it owns, though. It’s essential to consider the company’s earning potential. When selling a cannabis business with a price-to-earnings ratio of 15 and a projected earning of $500,000, the company could have a value near $7.5 million.

Sellers should consider meeting with valuation professionals to determine how much their businesses are really worth. Ideally, someone with a background in accounting and business should review the company’s projected revenues and debts.

The Value of a Cannabis Business’s Brand Identity

A cannabis business’s brand also has value. If the company has a reputation for providing excellent products and professional services, it has more value than a business with a negative reputation. That needs to be considered when selling a well-known company in any industry.

Gather Proof of Ownership and Licensing

No matter where a business operates, the owner or owners must have documentation. When it comes to selling a cannabis business, owners also need to gather all of the licensing that proves they meet local guidelines.

States have unique licensing requirements. Regardless of location, though, cannabis and hemp businesses must follow strict regulations. Falling short of those regulations can lead to fines and even prosecution.

All potential buyers will want to see the documentation that proves ownership and licensing. Without those documents, it’s too risky for them to take steps toward purchasing the company.

Update Revenue and Expense Documents

Before selling a cannabis business, owners need to collect books and records that show the company’s financial success. No one will take the current owner’s word for it. Update all revenue and expense documents now so interested parties can see the numbers.

Financial records should detail how the business is functioning. It’s not enough to show receipts that say the company had $100,000 in revenue last quarter. Buyers will also need to know things like how much the business spends on:

  • Operational costs (utilities, rent, etc.)
  • Marketing and advertising (including costs connected to website maintenance and content creation)
  • Labor (how much employees get paid in money and benefits)
  • Taxes (including local, state, and payroll taxes)
  • Insurance (policies for your real estate, professional liability, vehicles, workers’ compensation, business interruption, etc.)
  • Payment processing (credit cards, for instance, charge retailers a percentage of their sales)

Expenses, in other words, can add up quickly. That’s why revenue and expense reports are some of the first things that potential buyers will ask for. Without those documents, no one will think twice about purchasing the cannabis company. They will move on to look for an option that conforms to their expectations.

Communicate With Other Stakeholders in Your Business

Cannabis businesses often have multiple stakeholders who need to make decisions together. In some cases, two people might co-own a dispensary or farm. In other situations, dozens or hundreds of people might own stock in the company.

Granted, not every stockholder needs to know about a potential sale. Anyone with significant ownership, however, will need to be consulted. Otherwise, that person could cease negotiations and raise complaints.

The best option is to discuss selling with all stakeholders well before preparing the cannabis business for sale. That way, everyone is on the same page about factors such as the business’s value and how much they expect to profit.

It May Take Time to Get the Right Deal for a Cannabis Business

The cannabis and hemp industries have grown incredibly fast over the last few years. As more states legalize medical and recreational sales, the industry will keep growing.

What does this mean for people trying to sell a cannabis business? In part, it means that they should be willing to wait until they get the right deal. Interested parties may approach owners with low-ball offers or unrealistic expectations about what they will get for their money.

The willingness to wait several months or even a couple of years for the right buyer to come along and finalize a deal could be the difference between making a lot of money and losing a lot of money.

Conclusion

In conclusion, cannabis business owners should recognize that they have a lot of opportunities to grow. It often helps to get advice from a professional who has helped broker several deals. Knowing how to build a business isn’t the same as knowing how to sell one to a reliable buyer. You may even need assistance from real estate agents, appraisers, lawyers, and business consultants. Don’t rush into a sale. Take some time to make a wise decision that rewards the hard work of building a business from the ground up.

May 21, 2020 / by / in
Cannabis Business Proving Itself Pandemic and Recession-Proof

Near the end of January 2020, the United States officially entered the longest period of economic growth in the country’s history. Growth had slowed significantly by 2020, but the economy still showed signs of moving forward. At the time, it seemed like nothing could stand in its way. On the other side of the globe, though, cases of COVID-19 started to spread beyond the borders of Wuhan, China. No one knew it, but COVID-19 was coming for the U.S. and world economies in a big way.

Now that the U.S. has gone from growth to recession at breakneck speed, entrepreneurs and investors want to find opportunities that will help them earn strong returns despite the mounting damage of a global pandemic. The cannabis industry stands out as one of the best options as it proves itself pandemic and recession-proof.

Cannabis Sales Increase Even as the Economy Stumbles

Slowing the progress of COVID-19 means that people need to isolate themselves and stay at home. As a result, service industries came to a sudden halt. Restaurants, hotels, and movie theaters shut their doors during March because they didn’t have any customers. As more businesses layoff workers, unemployment claims have skyrocketed. The Department of Labor reports that in March 2019, about 1.7 million people applied for unemployment. In March 2020, the number of filers exceeded 3 million.

The slowing economy and job loss haven’t hurt the cannabis industry, though. In fact, recreational cannabis sales rose by 50% between March 16 and 22. Compared to March of 2019, medicinal marijuana sales grew 41% by the end of March 2020.

Analysts say that sales in Oregon, a state that allows medicinal and recreational sales, increased by 75% while the price of the average order grew by more than $10. In California, dispensaries say that the number of first-time buyers has jumped 50%.

Why the Cannabis Industry Can Grow During a Recession and Pandemic

A few key factors make cannabis industries pandemic and recession-proof.

First, economic uncertainty creates a lot of anxiety in people. Jobs that seemed secure a month ago have evaporated. Whether currently employed or not, people don’t know how long they will keep receiving paychecks. Using cannabis helps many of those people control their anxiety so they can focus on staying safe and sane during isolation. Others use marijuana to cope with symptoms of depression that often increase when they can’t socialize.

Second, people get bored quickly. Even with countless movies, songs, and games to access online, humans crave social interaction and novelty. Dispensaries in California may have seen an increase in first-time buyers because people who don’t typically use cannabis are seeking novelty.

Consuming marijuana also improves sound perception. Listening to music under the influence of cannabis can create euphoric feelings. People need the escape of euphoria most when they feel like everything else in the world has gone wrong.

Third, many states and cities have decided that cannabis distributors are essential businesses that aren’t held subject to government orders to close. California Governor Gavin Newsom announced on March 19 that cannabis distributors with medicinal licenses were considered essential. Unlike bookstores, clothing stores, and bars, dispensaries did not have to close their doors to customers.

The decision to include cannabis dispensaries as essential businesses means that companies can continue making money during the pandemic. Since consumers have fewer places to spend money, it makes sense that more of them will head to their local stores to purchase cannabis products.

Cannabis Has Replaced Alcohol for Many Consumers

During the Great Recession that lasted from December 2007 to June 2009, alcohol sales grew. As people lost their jobs, they turned to alcohol to cope with the situation.

Stores will continue to sell alcohol during the worldwide downturn caused by COVID-19. Most states list liquor stores as essential businesses. Consumption trends have evolved a lot over the last decade, though. Today, a lot of people who enjoy cannabis say that they don’t consume much alcohol.

Millennials are fueling the trend away from alcohol and toward cannabis. Many Millennial consumers say that they don’t get much enjoyment from drinking alcohol. They also complain that alcohol costs a lot of money. Spending one evening drinking at a bar can easily cost $30. Plus, plenty of cannabis users say that they prefer marijuana because it doesn’t give them hangovers like alcohol does.

Cannabis gives consumers a cheaper, more enjoyable experience than alcohol. Some companies that understand this trend have already started investing in cannabis-based drinks that offer a buzz without the booze.

The Cannabis Industry Has Ample Opportunities to Grow During a Recession

Most states have some level of cannabis legalization. The industry, though, has ample opportunities to grow during a recession. As of 2020, only 11 states have fully legalized marijuana for adults over 21. Thirty-three states have medicinal marijuana.

During a recession, states will need to find new sources of revenue. States that have been close to legalizing cannabis, such as California and New Jersey, might get the nudge they need to follow through during the 2020 and 2021 elections.

Within two years of full legalization, California collected more than $1 billion in cannabis tax revenue. As states realize the financial burden caused by unemployment, closed businesses, and slowed travel, they cannot afford to ignore the benefits of passing laws that favor the cannabis industry.

Cannabis businesses already have a lot of ways to earn profits. The pandemic and recession may prove that people need the relief, jobs, and taxes that the cannabis industry can offer.

April 4, 2020 / by / in
2020 Elections, Cannabis, and Increased Demand for Cannabis Real Estate

Regardless of their political party, the majority of Americans support cannabis legalization. According to a 2019 Pew Research Center survey, 55% of Republicans and 78% of Democrats agreed that marijuana “should be made legal.” Overall, 67% of Americans want to see cannabis legalized. Only 32% think that cannabis “should not be made legal.”

The American public’s evolving position on cannabis legalization could have significant ramifications for 2020 state electrons and the demand for cannabis real estate.

The Effect of Cannabis Legalization on Real Estate

When Americans consider the effects of cannabis legalization, they rarely think about whether updating laws will raise or lower real estate values. Cannabis entrepreneurs, however, need to take changes in cannabis real estate seriously. Deciding when to purchase land and buildings could partially determine whether companies succeed or fail.

Colorado, one of the first states to legalize recreational cannabis, offers an excellent case study that could predict how changing laws affect real estate prices.

One study finds that Colorado’s decision to legalize marijuana helped increase home values by 6%, which comes to about $15,600 per property. Legalization may contribute to higher values because it creates a new industry and jobs, attracts job seekers, and encourages investors to spend money on property.

Interestingly, areas that legalize medical marijuana do not see such a significant jump in property values as those that legalize recreational cannabis.

How Legalization May Influence Cannabis Real Estate Investors

Considering that property values increase after legalization, it makes sense for cannabis real estate investors to purchase land and buildings before states change their laws. A storefront that costs $250,000 before legalization could easily reach $265,000 after legalization.

Unfortunately, researchers haven’t spent as much time studying the impact of cannabis legalization on farmland. One could assume, though, that farm prices will go up as more investors purchase land for growing cannabis.

2020 State Elections That May Lead to Cannabis Legalization

Cannabis investors should pay close attention to 2020 state elections that will affect cannabis legalization. The closer a state comes to recreational legalization, the more expensive property will probably become.

Every investor will need to gauge the landscape to determine the right time to buy land and pour money into the equipment, infrastructure, and employees. Paying attention to 2020 state elections may play a crucial role in when entrepreneurs decide to invest.

States That May Pass Medical Cannabis Laws in 2020

So far, medical marijuana hasn’t had much of an influence on real estate prices. States that pass medical cannabis laws, though, have taken a first step toward full legalization. Once they find that medical use benefits people more than harms them, it becomes easier to make recreational cannabis easier.

Idaho

Regions with recreational cannabis surround Idaho. The state’s government has resisted pressure to conform to its neighbors’ laws.

The 2020 election, however, may include a ballot initiative that would let Idaho residents decide whether they want to legalize medical marijuana.

Kansas

As of March 2020, Kansas has some of the country’s strictest marijuana laws. Governor Laura Kelly, who took office in 2019, supports medical cannabis, though. Kansas’s Senate and House have Republican leaders who do not support the governor on her position. This creates a tense situation that could influence how people choose to vote in 2020.

Kansas has been put in an odd position, geographically. It shares borders with Colorado, which has fully legalized cannabis; Missouri, which has medical cannabis and decriminalized recreational use; Oklahoma, where patients can access medical marijuana but authorities can prosecute recreational users; and Nebraska, which has decriminalized personal cannabis use even though it does not have medical marijuana.

Mississippi

Mississippi’s cannabis advocates are encouraging residents to support a ballot initiative that would let them, the voters, decide whether the state adopts medical marijuana. Note that winning would not legalize medical marijuana. It would just give residents the right to vote for or against legalization. Still, it’s a big step forward for the state.

States That May Pass Recreational Cannabis Laws in 2020

Some states that allow medical marijuana could begin the transition to recreational cannabis after the 2020 elections. Depending on the state, recreational cannabis laws will depend on voter initiatives and who wins elections.

Arizona

Arizona failed to pass a ballot initiative by just 3% in 2016. Assuming that supporters can get at least 237,645 signatures, a new initiative will appear on the 2020 ballot.

Interestingly, some cannabis groups oppose the initiative, so the ballot may have two options for voters to consider.

New Mexico

New Mexico always seems on the cusp of legalizing recreational cannabis. Governor Michelle Lujan Grisham already had a task force to create a blueprint for legalization. The House passed a law that would let adults consume cannabis legally.

New Mexico’s Senate, however, remains skeptical. Without the Senate’s support, New Mexico will not pass new cannabis laws in 2020. That means that the 2020 Senate races could determine the fate of legalization in New Mexico. If the skeptics lose their positions, the state could start passing updated laws.

New Jersey

New Jersey fell short of passing recreational cannabis laws in 2019. In 2020, voters will get a chance to have their say.

One poll shows that 62% of New Jersey residents support legalization. Only 32% oppose it. The 2019 version of the survey showed 59% support. The slight increase could give the state enough votes to enact recreational cannabis laws. Legalization will likely depend on whether people turn up to vote.

New York

Most politicians in New York seem to agree that the state needs to pass recreational cannabis laws. New York, however, failed to reach this goal in 2019. The issue isn’t so much whether the state supports recreational legalization, but how to write laws that would promote social justice during the legalization process.

If Governor Andrew Cuomo gets his way, New York will set aside 50% of cannabis tax revenue to invest in communities that have been disproportionately harmed by prohibition.

Connecticut

New York’s passing recreational cannabis could stimulate Connecticut to follow its neighbor’s lead. Currently, it seems unlikely that Governor Ned Lamont will stick his neck out to support legalization. If New York chooses legalization, though, it will become less risky for Lamont to do the same. It’s a long-shot, but it’s possible.

Conclusion

Most states have some form of legal marijuana. The influence of cannabis on real estate prices doesn’t become significant, though, until states pass recreational marijuana laws. Once that happens, the industry starts to attract more investors, which can drive up the price of buildings, farmland, equipment, and employees.

Every investment requires some level of risk. Whether buying cannabis real estate now will lead to future profits largely depends on predicting how voters will respond to the country’s evolving beliefs.

March 17, 2020 / by / in
Directors and Officers Liability Insurance in the Cannabis & Hemp Industries

The legal cannabis and hemp industries have enormous room for growth. One report from New Frontier Data shows that legal cannabis sales will come close to $30 billion by 2025.

Despite the potential growth of legal cannabis and hemp sales, the industry is still very young. As a new industry, no one knows what will happen. Companies may reach or exceed the projection from New Frontier Data. Then again, the cannabis industry faces a lot of risks that could harm cash-strapped businesses struggling to earn profits.

The wide range of risks makes it crucial for the directors and officers of cannabis companies to get liability insurance that protects them from personal financial loss.

Risks Can Come at Unexpected Times

The cannabis and hemp industries face some ongoing dangers. A lot of states still haven’t adopted recreational cannabis laws. Nearly 18 states don’t even allow medical marijuana.

Luckily, most cannabis and hemp companies understand federal and state laws well enough that they can avoid prosecution. Plenty of other risks, however, can come at unexpected times.

In March, one of the world’s largest cannabis companies announced that it would layoff 500 employees and close two of its indoor cultivation facilities. The Canadian company says that it made the changes because:

  • The recreational cannabis market grew slower than expected in Canada.
  • Changes to federal law permitted outdoor cultivation after the company had invested in expensive greenhouses.

The cannabis company couldn’t have foreseen these risks when it spent a significant amount of money developing indoor cultivation facilities intended to meet the anticipated demand.

Risks That Could Harm Directors and Officers

Other hazards that could harm the directors and officers of legal cannabis and hemp companies include:

  • Failing to meet profit expectations.
  • Falling short of security requirements that protect inventory and cash.
  • Letting customers purchase more products per visit than allowed by local law.
  • Selling products that don’t comply with safety laws, such as labeling products and placing items in childproof containers.
  • Data breaches that leak customer information to criminals.

Like any business, cannabis and hemp companies can also get accused of things like:

  • Breach of duty.
  • Breach of contract.
  • Misrepresentation.
  • Unfair competitions.
  • Misappropriating trade secrets.

Any of these risks could leave companies open to lawsuits from investors, vendors, customers, or government agencies.

Protection Offered by Directors and Officers Liability Insurance

When companies make mistakes, directors and officers can expect repercussions. Failing to label a product correctly, for example, could mean that a vendor can sue the supplier. If the supplier mislabeled the product, the vendor could very well win the suit.

Directors and officers liability insurance helps ensure that the repercussions only affect the business. The insurance offers personal protection to directors and officers who hold policies.

Depending on the policy, directors and officers liability insurance may pay for legal defense related to:

  • Company performance.
  • Decisions that exceed a position’s role.
  • Not complying with regulations.
  • Regulatory infractions.
  • Mismanagement of funds.

Directors and officers liability insurance does not cover all activity, though. Business leaders should not expect liability insurance to protect them from:

  • Property damage.
  • Personally profiting from misdeeds.
  • Fraud.
  • Litigation started before getting liability insurance.

Finding Directors and Officers Liability Insurance for Cannabis Companies

Hundreds of insurance providers sell directors and officers liability insurance policies. Unfortunately, few of them are willing to sell policies to the directors and officers of cannabis companies. Even when a company operates legally, insurance providers tend to avoid the cannabis and hemp industries.

Directors and officers liability insurance also tends to cost a lot more for business leaders in the hemp and cannabis industries. Directors and officers working in the cannabis industry can expect to pay two to 10 times more than those working in areas like technology and manufacturing. Prices can range anywhere from $20,000 to $100,000 per year.

The industry has faced similar challenges from banks and lenders. Until Congress changed its “suspicious activity report” rule, most banks decided that they didn’t want to work with hemp growers, manufacturers, and sellers. Thankfully, the law has been changed to make banks feel at ease when creating accounts for hemp businesses.

The recreational cannabis industry, however, still faces a lot of challenges that prevent companies from accessing the services they need from banks and insurers.

Hopefully, the insurance industry will evolve as more states legalize recreational cannabis. Some insurance companies, however, will probably stay away from cannabis until the federal government lifts prohibition. Until that day comes, directors and officers will have to spend higher-than-average amounts of money on liability insurance available from a handful of companies.

Do Cannabis and Hemp Companies Need D&O Liability Insurance?

Anything can happen in a rapidly evolving market. Investors may feel angry when they don’t see quick returns. Government agencies may pursue litigation against cannabis companies that operate within the law. Business leaders could make bad calls that hurt company performance.

Given the unknown level of risk, it makes sense for companies to protect their directors and officers with D&O liability insurance. Without a reliable insurance plan, experienced CEOs and managers may choose to stay in other industries until they see more certainty. Losing those people would limit a company’s ability to reach or exceed expectations. That makes D&O liability insurance essential.

March 10, 2020 / by / in
Rule Your Extraction Business with an Iron Fist

When it comes to processing cannabis and hemp materials—extraction is one of the most popular methods. All plants are made of chemical compounds, like terpenes/terpenoids for smell and flavanoids for flavor. These compounds are often extracted in plants like lavender, and even your daily coffee or tea is similar. An extraction process essentially uses a solvent to separate the terpenes and flavanoids from the plant material.

There is countless extraction equipment manufacturers and systems on the market that all achieve the same thing, but with varied results in processing power, quality of product, and run-times. Additionally, not all extraction systems are built with quality materials—some are built using inferior steel and use cheap components and pumps. One closed-loop extraction system stands out, and if you’ve ever wondered how award-winning extracts are made, Iron Fist Extractors is the answer. These finely engineered, closed-loop extractors are designed to produce full spectrum extracts with amazing terpene profiles.

Iron Fist Extractors:

  • Made in USA
  • 100% American Stainless Steel
  • Fully Customizable
  • Versatile to use Butane or Propane
  • Use the Highest Quality of Parts and Components
  • Come equipped with Duel Haskel Recovery Pumps
  • Can achieve solvent recovery times of 1lb per minute
  • Produce award winning extracts

Whether you’re working with cannabis, hemp, or any plant you want to extract essential oils from, discover the difference an Iron Fist makes in your products.

Visit: https://ironfistusa.com/extractors/ for more information and pricing.

January 20, 2020 / by / in
Cannabis and Hemp in Thailand

Are you an entrepreneur or business person looking to invest in the cannabis and hemp industry? If yes, Thailand might be your most probable destination. With numerous developments, regulations, and research, the Thai’s cannabis market is becoming a hit, not only in Asia but also globally,

Thailand is among the most promising nations in terms of cannabis trade and consumption. While other governments are still putting restrictions on cannabis and hemp, Thailand is exploiting this somewhat controversial industry. This article provides a complete overview of the cannabis and hemp industry in Thailand. Read on!

History of Cannabis and Hemp in Thailand

Cannabis, (popularly known as kancha) and hemp use have come a long way, from the traditional kitchen ingredient to the modern medicinal substance. Laborers used marijuana as a muscle relaxer while women used it to ease labor pains. However, the Cannabis Act, B.E. 2477 of 1935, criminalized the possession, use, or sale of cannabis.

What Does Thai’s Cannabis Look Like?

Thailand’s kancha is different from that from other parts of the world. It is a pure Sativa landrace highly popular for its high THC content and relatively low CBD. Its leaves grow in clusters and feature wispy hairs. Also, it has a citrus scent and produces a lighter “high” than other types of cannabis.

The majority of Thai’s cannabis varieties take around 20 weeks to flower due to lack of light variation and temperature between seasons.

In the modern-day, many people in Thailand regard cannabis as traditional medicine. Unlike other drugs, cannabis doesn’t experience a lot of stigmas. The government’s contribution to the legalization of kancha removes any significant war on it.

Cannabis and Hemp Regulations in Thailand

Thailand has laws in place that regulate the production and use of hemp and marijuana. Although the rules were more stringent in the past, the Thai government is easing them day by day.

To start with, the government has separate laws for hemp and cannabis. Hemp is legally distinct from cannabis as it contains less than 0.2% THC. In 2018, the government enacted its first regulations that allowed government entities and agencies to apply for hemp cultivation permits. The registered entities would grow hemp in any of the following provinces: Nan, Chiang Rai, Mae Hong Son, Tak, Phetchabun, or Chiang Mai. Hemp strains from these provinces are highly regarded for their high-quality fibers, making them suitable for the textile industry.

In December 2019, Thailand legalized the medicinal use of cannabis. Medicinal kancha can be used to treat the following;

  • Multiple sclerosis
  • Child epilepsy
  • Cancer

Recreational use, however, is a crime that attracts more than 15 years in prison.

In the new regulations, 99% pure hemp extracts containing a CBD to THC ratio of 0.01%:0.2% weight can be used in pharmaceutical drugs and herbal products. Dried hemp back, seeds, fibers, and stems can as well be used in food products, cosmetics, and traditional medicines.

In recent regulations, Thailand removed hemp extracts and low-level cannabis from the list of banned narcotics. Hemp seed and oil derivatives are allowed. CBD extracts from hemp plants and marijuana were also removed from the list of banned narcotic substances.

Currently, kancha is grown by government agencies and research institutions such as universities. They grow industrial-grade cannabis rather than the typical garden cannabis.

Production and Trade of Hemp and Cannabis in Thailand

Thailand highly restricts the growth, manufacturing, and trade of both hemp and kancha. It is illegal to grow cannabis at home whether for recreation or medicinal use. Also, the sale of cannabis seeds is illegal. This means that you cannot purchase them in Thailand or buy from another country.

With a government permit, a farmer can cultivate hemp. The law requires that hemp must not exceed more than 1% THC. Hemp can only be grown in designated areas, while seeds can exclusively be sourced from licensed hemp-harvesting producers.

With a valid license, the farmer can grow, harvest, or process hemp for;

  • Research
  • Commercial use
  • Production and distribution of seeds
  • Household use

Thai Cannabis Market Scope

The Thai cannabis and hemp industry is soaring very fast since the legalization of medicinal cannabis and hemp on medicinal and food products. According to the Bangkok Post, Thailand’s cannabis industry is estimated to hit around USD 661 million by 2024.

Thailand approved USD 4 million to expand marijuana farms for medicinal purposes. This will help fend off any foreign competition for medicinal marijuana.

The Future of the Hemp and Cannabis Industry in Thailand

Thailand is poised to overtake the United States’ Hemp and Cannabis Industry within the next 5- 10 years.

There are various proposals to legalize the cultivation of kancha. Thailand is gearing up towards full legalization of kancha that will allow Thais to cultivate up to 6 cannabis plants at home. This kancha will be sold to the government for conversion to medicinal marijuana.

It looks likely that farmers will be able to plant cannabis trees in their gardens. While this will have to wait, the government has built a very large industrial-scale, medical marijuana facility. The Government Pharmaceutical Organization (GPO) is hoping to cultivate plants that will produce enough ingredients for the manufacture of a million, 5ml kancha oil bottles by Feb 2020.

Future kancha strains will have differing percentages of CBD and THC. Maejo University, the premier cannabis research institution, has developed a marijuana strain called Issara. This strain offers equal percentages of CBD and THC. These strain will treat illnesses and symptoms that require different ratios.

January 13, 2020 / by / in
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