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Last updateTue, 18 Sep 2018 1pm

The California cannabis industry is now in its second year of legalization—and excitement within the industry is building. Experts in the Coachella Valley have been diligently preparing their forecasts for 2019—so we decided to ask them what they’re expecting to happen.

One leader in the industry is predicting great things for 2019. Adrian Sedlin, CEO of Canndescent, which has a large grow facility in Desert Hot Springs, is expecting the industry to boom as legalization spreads globally.

Sedlin notes that in 2018, the adult-use cannabis market tripled in population size, and says that as the industry grows with adult use, so will production. He also thinks the political arena is looking better for legalization, as more political candidates are promoting federal legalization.

“Many critics argue that California made a mess of things in its first year regulating adult-use cannabis,” Sedlin said. “(The year) 2019 will prove far more prosperous for license-holders as operating a cannabis business without a license will finally become a felony.” 

The economic potential in the Coachella Valley is huge, considering the amount of open land and the potential for cannabis-industry growth here. Brent Buhrman, CEO of Nationwide Cannabis Funding and president of the Coachella Valley Cannabis Alliance Network, is predicting the industry in the valley “will see an explosion of growth as new cannabis development becomes vertical and operational.” Buhrman also expects real estate in the valley to hold its value, especially with many cannabis investors who were waiting for two things to happen that, well, just happened: the passage of the Farm Bill and the departure of Attorney General Jeff Sessions. These investors are “ready to play ball,” says Buhrman, “and the watchers are now ready to jump into the game.” Buhrman predicts the Coachella Valley will see a new wave of people and companies come forward as a result.

With the industry starting to mature, Sedlin does expect some—no pun intended—weeding out to occur. He foresees stocks changing drastically, and as a result, the “high-profile sackings” of two or three high-profile CEOs at publicly owned cannabis companies.

Other seasoned cannabis entrepreneurs see different transitions on the horizon. Eric Crowe, of Cathedral City-based Mystic Valley CBD, who has been on the forefront of the Colorado cannabis industry for the last 15 years, predicts Coachella Valley happenings will mirror much of what was seen in Colorado. Crowe is predicting a clearing in the industry, which will lead to legitimacy and credibility as well as a surge in canna-tourism. This surge, Crowe states, “will created unprecedented economic growth in the valley, which will include all ancillary business, such as construction, hospitality and all business trades.”

Crowe cautions that lessons learned from Colorado should be heeded as the Coachella Valley cannabis industry expands.

“All industry in the valley, in some way, will come to depend on the cannabis industry, and as it morphs and grows, oversaturation will happen,” he said.

As happened in Colorado, Crowe anticipates the quality and quantity of the goods in the market will reach capacity, which will result in price reductions and many companies closing as a result. Like Buhrman, he predicts this will allow a new group of players to come to the table. Crowe thinks some of the new business emphasis will be on medicinal uses for hemp, specifically 100 percent certified organic growth and production. He expects that the success of some within the industry will depend on new technology; for example, his company uses reverse-engineered sound-wave technology, which focuses on the DNA of the hemp plant in order to produce the highest level of CBD full-spectrum concentrations.

The economic outlook for the cannabis industry in 2019 and beyond looks very promising—but those in the industry will need to change along with the demands of the industry.

Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.

Published in Cannabis in the CV

For about 162 years, marijuana and hemp were commonly and legally grown in the United States.

Hemp fiber, although derived from a cannabis varietal, contains little to no THC—0.3 percent or less in both the European Union and Canada—and it cannot get a person high. It has been used for centuries to make things like rope, cloth, paper and food. Our founding fathers grew hemp; the Model T was partially made from hemp, and hemp was even used as animal feed.

In the 1930s, the cultivation of hemp was curtailed in the U.S. A combination of big-money interests, including Secretary of the Treasury Andrew Mellon—a major investor in DuPont—sought to make hemp illegal to make room for the synthetic (plastic) fiber industry—which, of course, also benefited the oil industry. Hemp paper posed a threat to the timber industry, too. However, since hemp was such a part of the American consciousness, it needed to be rebranded and demonized.

Enter the term marihuana (marijuana), then a rather obscure Mexican slang word for cannabis containing THC. The government and its allies in big business were able to use what we would today call “fake news” to create horror stories about cannabis use, including movies like Reefer Madness, a 1936 film that shows “reefer” driving people to become murderers.

In 1937, the Prohibitive Marihuana Tax Law was quickly moved through Congress. Because the public did not understand that hemp and “marihuana” had been looped together as the same thing—this was well before you could fact-check news on the internet—there was virtually no public outcry, despite opposition from the American Medical Association.

In the 1970s, the Controlled Substances Act further criminalized cannabis, even classifying industrial hemp as a Schedule 1 drug, making it illegal to grow or even research the uses of hemp.

The war on cannabis has now been going on for more than 80 years. For most of this time, the hemp industry has been working to decriminalize the growth of industrial hemp by actively working to decouple it from marijuana. However, that’s changed, as states have legalized medical and recreational cannabis—meaning the hemp industry is now in the process of re-hitching its wagon to a star.

As recently as 2015, the Hemp Industries Association (HIA), a leading industry trade organization, estimated that retail sales of hemp products in the U.S. totaled $573 million—largely using imported hemp. Hemp can be used not only for food, textiles and personal care, but also car parts, biodiesel, construction materials and many other things. From an environmental prospective, hemp just makes sense: One acre of hemp plants, grown in just three months, can yield as much paper as four acres of trees that have been planted for years. One acre of hemp can also provide as much fabric as two to three acres of cotton—while using a fraction of the pesticides. Hemp can also be carbon-neutral, as carbon that is released from burning hemp as fuel is reabsorbed by the next crop of plants as they grow.

Good news is on the horizon: A provision in the 2018 Farm Bill—legislation totaling more than 1,000 pages dealing with everything from farm subsidies to food stamps—paves the way for the legalization of industrial growth. The bill is due to be voted on by the full Senate before its July 4 recess, and although it would only block federal authorities from punishing hemp farmers and researchers in states where industrial hemp is legal, it is the first meaningful reform we have seen in decades. Even ultra conservatives like Senate Majority Leader Mitch McConnelll, a Kentucky Republican, are pushing for hemp legalization.

“I know there are farming communities all over the country who are interested in this,” McConnell said about hemp as the bill passed through the Senate Agriculture Committee via a 20-1 vote on June 13. “… Younger farmers in my state are particularly interested in going in this direction. We have a lot of people in my state who are extremely enthusiastic about the possibilities. As we all know, hemp is very diversified.”

This is huge news. America’s attitude toward cannabis production from both an industrial and recreational/medical perspective is rapidly evolving—and we may finally see a light at the end of the tunnel regarding the commercial cultivation of hemp.

Published in Cannabis in the CV