A venture capitalist I sat down with recently explained her desire to invest in startups focused on converting federally legal hemp into something that can get you high.
“The federal government”, she surmised, “unintentionally legalized cannabis with the 2018 Farm Bill. We are most interested in companies who can exploit this at scale.”
This statement is significant on at least two fronts. First off, venture capitalists have been avoiding the cannabis sector for the last 18 months. Any interest in the plant, novel variations or otherwise, is a signal that investor sentiment is warming back up to an industry that normalizes by the day.
Secondly, at least as far as this investor is concerned, there is no putting the Delta 8 hemp-derived THC genie back in the bottle. Even if provisions in the upcoming Farm Bill attempt to modify today’s Kafkaesque status quo – where some parts of the plant are federally legal and restricted in multiple states while other variations of the plant are federally illegal but sanctioned in nearly 40 states – there will always be workarounds and at the end of the day consumers will continue to flock toward legally accessible weed.
Which brings us to questions about what is in the best interest for the consumer, and how can we adhere to fair and equal business practices between licensed cannabis operators and unregulated hemp proprietors?
“I think we are in the early days of really allowing the public to be empowered with access to products like hemp and cannabis that can improve the quality of life,” said Dr. Jennifer Weiss, the founder and CEO of Cubbington’s Cabinet, a high-end CBD shop on Chicago’s northside.
Weiss is a proponent of strong regulation and consumer education mandates for hemp-derived THC retailers.
This issue will be a primary topic of conversation on Wednesday evening during a Town Hall Meeting organized by Illinois Senate Majority Leader Kimberly A. Lightford.
Also participating at the Town Hall will be Cresco Labs, the Illinois Department of Finance and Professional Regulation, hemp-derived THC beverage startup Plift and representatives from the Cannabis Business Association of Illinois and various social equity groups.
“There’s a lot of risk legally that companies like ours focused on educating consumers and providing carefully sourced products will be shut out entirely by larger players mostly incentivized by selling cannabis for money,” Weiss said.
Of course, not all hemp-derived THC proprietors are as invested in regulation and education as Cubbington’s. The licensed industry in Illinois, and all other states, incur considerable costs and operational obstacles that are not required by this new set of competitors. There is also scant information about what goes into a hemp-derived THC product and how it will impact consumers.
“There’s a lot of consumer confusion right now between all the different businesses operating in the cannabis space,” said Tai Duncan, vice president of community integration at Cresco Labs.
“Senator Lightford wants to educate her constituents to make sure they are buying and consuming regulated and tested cannabis products and not intoxicating synthetic products. It’s also really important to highlight the future business opportunities that lie ahead in this growing industry.”
1871 Cannabis Innovation Lab Kickoff This Thursday – Last Call for Registration, New Hemp Topic Added
Several dozen stakeholders committed to advancing the cause of commercial cannabis will convene in-person in Chicago and virtually for the Cannabis Innovation Lab Community Kick Off on November 16 from 2pm to 6pm CST.
The event will begin with a panel conversation focused on funding and public-private partnerships in the cannabis sector featuring Michael Sachaj of Hyde Park Angels, Lisa Evia of SeedFund Capital and Ameya Pawar of the Economic Security Project and OKAY Cannabis.
Confirmed attendees include representatives from Curaleaf, Cresco Labs, Hyde Park Angels, Aon, Canopy, Marimed, NOBO, SeedCap Fund, 4Front, Fiserv, Treez, Denton’s, OKAY Cannabis, Nu Era Cannabis, Discovery Partners Institute, Chicago Booth, State of Illinois Division of Cannabis Regulation, Illinois State Policy, and dozens of others.
What the Hemp?!
Due to popular demand, a “What the Hemp” topic has been added as a small group conversation during Thursday’s Cannabis Innovation Lab Community Kick Off.
Dr. Jennifer Weiss of Cubbington’s will facilitate a conversation on the subject alongside others from the licensed industry as well as startup hemp-derived businesses.
Register below to join our movement.
Cannabis taxes collected in Michigan more than beer, wine and spirits combined
It seems that Autumn of 2023 represents the best of times and worst of times for Michigan’s longstanding and unwieldy cannabis industry.
On the one hand, the four-year-old adult-use and 15-year-old medical markets are in crises. Competition within the unlimited licensed state is driving down prices, making it difficult for hundreds of cultivators, retailers, and manufacturers to stay afloat.
On the other hand, consumers love their cannabis.
According to the Michigan House Fiscal Agency’s October update, tax receipts for recreational sales for fiscal year 2023, which ended September 31, totaled more than $266 million. This is more than beer, wine and spirits combined. The recreational tax rate in Michigan is 10 percent. Cannabis sales have an exceedingly healthy impact on the state budget, with considerable room to grow. While Michigan as a state has no licensing limitations, only 15 percent of municipalities allow for the sale, cultivation and manufacturing of the plant.
Beyond the ability for many operators in Michigan to remain solvent, additional headwinds remain. Last week’s referendum in Ohio to legalize adult-use cannabis sales in the Aviation State will negatively impact gross sales in Michigan – particularly in border towns like Morenci, which has 5 dispensaries.