Blue Forest Farms used to grow hundreds of acres of kale, squash and pumpkins. But it has since switched its focus to a different cash crop: hemp.The farm, which is located in Erie, Colorado, has dedicated 150 acres to growing hemp so far — and it’s still planting. “We’re now expanding it to 1,000 acres,” said McKenzie Mann, Blue Forest’s production manager.About 500 acres will come from land previously used to grow kale and squash.Farmers across the United States have been rushing into hemp ever since President Donald Trump signed the Farm Bill into law in December. The legislation removed hemp from the government’s controlled drug category, triggering a surge in demand for cannabidiol, or CBD, a chemical that is derived from hemp and marijuana plants.Content by ANAHow motifs and iconography in design can tell a story that’s hidden in plain sightWhy a Japanese airline approached a design studio on the other side of the world to redefine the air travel experience – a story of east meets west.

Blue Forest Farms in Colorado plans to dedicate 1,000 acres of its land to hemp this year.CBD is non-psychoactive, meaning it won’t get you high. (THC, or tetrahydrocannabinol, is the chemical in cannabis that does that). Instead, CBD extracted from hemp is marketed for everything from pain relief to reducing inflammation, stress and anxiety, and it is sold in an array of products from shampoos and oils to pet treats and granola.Farms that were already growing hemp are seeing both demand and profits surge, while farmers who have never grown hemp before are rushing to plant it in their fields.”There’s a lot of excitement in the farming community because hemp is seen as a high-return crop. There are many farmers around the country who are struggling to make ends meet and they’re looking for an alternative like hemp to boost revenue,” said Eric Steenstra, president of VoteHemp, a non-profit that advocates for the commercial sale of hemp.Suddenly, CBD is everywhere. Here’s what’s nextMann has been fielding multiple calls a dayfrom farmers around the country. “They’re corn farmers, wheat farmers. They want advice on how to grow hemp,” he said.Blue Forest charges $35 to $40 per pound for the high-quality hemp it sells for CBD extraction. That compares to about $1 a pound for the kale it sells. The company declined to disclose its total sales of hemp last year but said the category is very profitable for the business and it expects its hemp sales to double this year.Mann said the price of hemp went up slightly after the Farm Bill was signed. Industry watchers say the price could stay at these levels or inch even higher if supply for CBD doesn’t meet the demand.But if too many farmers get into the hemp business, the market could become saturated and prices could start falling, Mann noted. Last year, just over 78,000 acres of hemp was grown in the US, up from 9,649 acres in 2016, according to VoteHemp’s 2018 Hemp Crop Report.

More than just CBD

“There’s a lot of excitement in the farming community because hemp is seen as a high return crop.”

ERIC STEENSTRA, PRESIDENT, VOTEHEMP

Total sales for hemp-based products in the US were about $1.1 billion in 2018, and are expected to more than double by 2022, according to New Frontier Data, a market research firm focused on the cannabis industry.Much of those gains will stem from demand for CBD products. But hemp can also be used for a variety of other products, such as fibers, clothing, rope and building materials.”It’s important to take a longer-term picture of the hemp market,” said Steenstra. “Right now, CBD is the hot commodity and is a significant driver of the market and profit for farmers. But as an agricultural crop, hemp has significant market potential for grain and fiber.”

After it was legalized in December, hemp has become one of the most lucrative crops for US farmers.Andy Rodosevich is cofounder of Hemp Depot, a Colorado Springs, Colorado, business that operates its own farms and is a distributor of CBD and hemp products.

“My advice to farmers is learn as much as you can about it and then enter at your own risk.”

RANDY WENGER, CORN FARMER

The company planted 5.2 million hemp plants in 2018. “This year we are planting three times that number. We’re trying to keep up with demand for CBD and scale up production,” said Rodosevich.Hemp Depot charges $35 to $40 for a pound of the high-end hemp it sells for CBD products. Last year, the business sold about 25,000 pounds of hemp, helping the farm log a total of $10 million in sales. This year, he expects to sell350,000 pounds with total sales crossing $50 million. Rodosevich said the goal for next year is to sell 2 million pounds.He says he’salso gotten calls from enthusiastic farmers asking for advice on how to grow hemp. He understands the excitement but tries to set reasonable expectations for them.MORE FROM SUCCESS

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Are you ever too old to start investing?“While hemp is unbelievably profitable for farmers, growing it has its challenges,” he said.For starters, the seeds aren’t cheap. Good quality seeds guaranteed to provide high CBD levels and low amounts of THC that fall below the federally mandated 0.3% threshold, can range from $1 to $2 each.Hemp farming is also labor intensive. While large-scale farms use machinery for growing traditional crops like wheat and corn, specific machinery for planting and harvesting hemp is still lacking. So hemp farms rely on manual labor for planting, harvesting and removing weeds.Randy Wenger, a corn and wheat farmer whose 5,000 acre farm in Yuma County, Colorado, has been in the family since 1919, tried hemp farming for the first time last year.”I was looking for an alternative crop that could be profitable for me and wouldn’t break the bank,” he said.

Randy Wenger with his wife on his family farm in Colorado.Even though he sought advice from other hemp farmers and researched farming techniques online, it was still a challenge. He was surprised at how much manual labor was needed to tend to hemp. “You can spend a lot of money just on the labor,” he said.She thought flowers were a waste of money. Until selling them brought in millionsThe hemp he was growing for CBD didn’t turn out to be the best quality either. ‘It was a total failure,” said Wenger.Nevertheless, he is willing to try again.”CBD is a popular topic,” said Wenger. “But my advice to farmers is, learn as much as you can about it and then enter at your own risk.”Correction: An earlier version of this story incorrectly stated the number of pounds of hemp Hemp Depot expects to sell this year.

Although marijuana and related products are not fully legal across the United States, the move by individual states to legalize cannabis for medical or, in some cases, recreational use has opened up many avenues for potential investment opportunities. As the cannabis industry changes in order to fall in line with regulatory requirements, the field of companies hoping to become established early on in the process is huge. At the same time, there is tremendous interest among investors hoping to cash in on what they believe to be an up-and-coming sector of the market thanks to the growth prospects of the industry.

One company, in particular, has drawn attention from many investors. GW Pharmaceuticals PLC ADR (GWPH) is a biopharmaceutical company headquartered in the U.K. GW aims to develop products within the medical cannabis portion of the legal marijuana industry. Below, we’ll explore what this company does and how it has already made a name for itself.

Medical Marijuana Products at the Forefront

As of this writing, 19 states allow marijuana to be purchased for medicinal purposes, while just 7 states have legalized some quantity of marijuana for recreational purposes. States tend to focus on medical cannabis products before they legalize recreational usage, so companies like GW Pharmaceuticals have been incentivized to focus on developing these offerings first and foremost.

GW Pharmaceuticals is focused on discovering, developing and marketing therapeutics based on proprietary cannabinoid compounds. The company has seen early success with Epidiolex, an oral medical product which aims to treat patients with Dravet syndrome or Lennox-Gastaut syndrome. Significantly, the Food and Drug Administration (FDA) has signaled its approval of Epidiolex. Now, GW Pharmaceuticals is continuing to explore related treatment options; according to a report by Stock Investor, the company has submitted an application in Europe for additional therapeutic products related to these syndromes and other rare epilepsy conditions.

Another key offering that GW has developed is Sativex(R), the first plant-derived cannabinoid prescription drug. Currently slated for a phase 3 trial in the U.S., Sativex(R) has the potential to corner a significant portion of the medical marijuana industry if it meets final approval. GW also has an impressive pipeline of additional products related to the treatment of autism spectrum disorder, schizophrenia, glioblastoma and more.

Wall Street Takes Interest

GW Pharmaceutical’s success has already drawn the attention of Wall Street firms. In late September 2018, Morgan Stanley raised its target price for the stock to $240. As of this writing, the stock trades for just over $143 per share. GW’s revenues for 2018 are forecasted at $17 million, but revenue for 2019 is expected to increase by a margin of more than 700%, yielding revenues upwards of $146 million.

As of now, shares of GWPH have been fairly volatile, but after testing technical support over the summer GWPH has hit new highs as recently as September. As of this point, the legal cannabis space is highly unsettled, with a large number of companies vying for attention and dominance. If GW is able to bring key products to market before its competitors, it could establish itself as a major force within the growing sector. Nonetheless, cannabis is unproven as a sector, and investors are best advised to be cautious when exploring this area. In order for investors to be able to make profits in this space, they will need to not only pick the correct companies to invest in but also be careful in how they time their buys and sells. If GWPH is poised to break out, it may be best to buy it sooner rather than later.SPONSORED

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Many farmers are now considering making the switch to hemp farming, but what is the process of making the switch? Would it be a worthwhile venture?

Did you know that Hemp was one of the first crops cultivated in the world, with records of hemp harvesting as far back as 8,000 BC?

Many farmers and now contemplating making the switch to a hemp farming enterprise, with some farmers claiming the ability to grow between 5-6 tonnes of Hemp per acre! They say they can do this, whilst also reducing their carbon footprint significantly, as Hemp only uses about one and a half tonnes of Co2 per tonne of hemp.

But how do you go about getting involved? How does it grow? What should you know before entering the sector? Keep on reading and it will all be revealed!



Uses –
There is an abundance of uses for Hemp, with in excess of 50,000 products produced from the plant.

The seed from hemp plants can be used to create a variety of products for many different uses such as Animal Feed, Foods, Tinctures, Health oils (CBD), Fuel, Cosmetics, Paints, Lubricants, protein powders beer and much more.

Straw from hemp plants can be used for the production of insulations, building materials such as the concrete alternative (hempcrete), ropes, textiles, furniture, canvas, carpets, clothes, animal bedding and much, much more!

How to grow it –
Hemp plants are actually very easily grown and need no chemical treatments of any type, as the plant is naturally more resistant to pests and weeds.

Hemp plants grow very tall (up to 16 feet) and seeds germinate very quickly, which is why weeds are no competition for them. Hemp plants also naturally help clean up soils and thrives best in well-drained pastures, with high levels of organic matter. In fact, some farmers even use hemp as a catch crop to allow their pastures time to recover and to rejuvenate them.

When planting, seeds are usually sown directly into the soil (up to one inch deep) and should only be planted after the last frost occurs. The ideal date for planting is late April or Early May, with temperatures in excess of 10 degrees as Hemp plants fare better in warmer weather. It can, though, survive when temperatures drop to as low as -5 degrees.

Seedlings will require access to water in overly dried pastures. A soil pH of between 7-7.5 is recommended, though the plant will grow in soils with a pH of 6.0. In order for Hemp to be a profitable enterprise, a farmer would need to grow an abundance of the crop. Some hemp farmers advise that in excess of 50-acres should be planted, in order to ensure a good profit level.

Restrictions –
As Hemp plants come from the same family as the Cannabis plant, there are some legal restrictions to consider and adhere to before beginning your ‘hempire’.

In Ireland, Hemp classed as a controlled drug and a special grower’s licence must be obtained before growing the crop. The HPRA (Health Products Regulatory Authority) are currently the only governing body that can issue a license to grow hemp.

Any Hemp plants grown must contain less than 0.2% of THC, the component in Cannabis which causes a ‘high’, if grown in Ireland. The crop cannot be grown in an area which is visible from the road and the location of the crop has to be proven to Gardaí via land mapping (OS maps), prior to the commencement of planting. All farmers must be Garda vetted prior to the commencement of planting and Gardaí are also permitted to visit the holding for an inspection.

To obtain your license all interest parties must email controlleddrugs@hpra.ie. They will then provide a list of questions seeking information on the applicant. The HPRA will request all of this information prior to sending out an application form.

The information likely to be requested includes personal information on the applicant, company registration documentation, Ordinance survey maps of the land in question and other identification methods, information on the end-use of the product, information security arrangements, information on any prior convictions, information on Authorisation for making Confidential Enquiries by the Gardaí, any information on suppliers and the Specific details of any seeds grown, including certification.

What is it worth –
At the moment, there is no real paper-proof of how much switching to hemp farming is actually worth to Irish farmers.

In the US, a recent study from Cornell University found that profits usually ranged from $130 to $730 per acre (€113 to €638), though some farmers claim to be making up to $3,000 per acre for industrial hemp!

Currently, the majority of hemp is imported into Ireland, though the Irish Hemp Growers and Processors Association (IHGPA) hope to create a viable market for farmers to sell their hemp crop, in a bid to encourage more farmers to grow it. They and other hemp organisations within the country say that the hemp sector will only get bigger and better over the coming years, as the world seeks more renewable and environmentally friendly way of producing products.

Could hemp farming be the latest craze to sweep the nation?

The results, recently published in the journal Brain Structure and Function, show that not only were the effects in these three categories different, but also that the group using both nicotine and cannabis more closely resembled the control (non-user) group in brain connectivity. The isolated nicotine and isolated cannabis users showed equally less connectivity in general.

Previous research in rats has suggested that nicotine may be a “gateway drug” leading to cannabis and other drug use. Studies performed with rats exposed to THC — the main psychoactive compound found in marijuana — demonstrated an increased likelihood to self-administer nicotine that was not observed with rats exposed to heroin or cocaine, suggesting that there is something unique about the cannabis-nicotine interaction.

“Most of the literature to date has focused on associations of isolated cannabis and nicotine use, even though concurrent cannabis and nicotine use is more prevalent in society than cannabis use alone,” said the study’s lead author, Dr. Francesca M. Filbey, the Bert Moore Chair in BrainHealth at UT Dallas. “Our findings confirm the limitations of existing research.”

While the outcome of the study could be, in part, due to the opposing effects nicotine and cannabis have on the brain, the difference in the brains of concurrent users versus isolated users of each product begs for further research in functional connectivity metrics in these populations, Filbey said.

MRI scans were used to evaluate resting state functions in 12 different regions of the brain among four groups of participants: 28 nicotine users, 53 cannabis users, 26 nicotine and cannabis users, and 30 non-users in a control group. These scans revealed that the control group displayed greater connectivity in almost all of the networks compared to the nicotine and cannabis groups, while the combined nicotine plus cannabis group had greater connectivity than the only-nicotine and only-cannabis groups. Notably, this study did not demonstrate a correlation between substance use severity and functional connectivity.

Differences in brain network connectivity suggest alterations in the underlying neural architecture of the brain that support brain function. Overall, Filbey said the study suggests unique and combined contributions of cannabis and nicotine on brain network connectivity, which could be helpful knowledge for intervention programs.

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Materials provided by Center for BrainHealth. Note: Content may be edited for style and length.

A new study from the University of Kent has found no evidence that teenage cannabis use is lower in countries with tougher policies.

The study, by Alex Stevens, Professor in Criminal Justice in Kent’s School for Social Policy, Sociology and Social Research, used data from the World Health Organisation’s Health Behaviour in School-aged Children survey. This survey asked over 100,000 teenagers in 38 countries, including the UK, USA, Russia, France, Germany and Canada, about their cannabis use.

Professor Stevens’s analysis of the data found no association between a country having a more liberal policy on cannabis use and higher rates of teenage cannabis use. The analysis controlled for differences between the countries, including their national income, and between the teenagers, including their gender, their affluence and psychological problems.

The new study was undertaken in response to a 2015 study that had concluded there was an association between policy liberalisation and a higher likelihood of adolescent cannabis use. This study has been used in the past to justify calls for tougher policies for cannabis use.

However, Professor Stevens found this was based on a misinterpretation of that study’s own numerical results. When taking into account the differences in cannabis use between boys and girls in different countries, and using more of the available data, a statistically significant association between policy liberalisation and adolescent cannabis use cannot be found.

Professor Stevens said: ‘My new study joins several others which show no evidence of a link between tougher penalties and lower cannabis use. This is useful information for governments as they consider the best way to deal with cannabis. As it is, the harms and costs of imposing criminal convictions on people who use cannabis do not seem to be justified by an effect in reducing cannabis use.’

Researchers use mobile app to measure how commercially available cannabis products affect pain intensity

Date:August 21, 2019Source:University of New MexicoSummary:Using the largest database of real-time recordings of the effects of common and commercially available cannabis products in the United States, researchers found strong evidence that cannabis can significantly alleviate pain, with the average user experiencing a three-point drop in pain suffering on a 0-10 point scale immediately following cannabis consumption.

Using the largest database of real-time recordings of the effects of common and commercially available cannabis products in the United States (U.S.), researchers at The University of New Mexico (UNM) found strong evidence that cannabis can significantly alleviate pain, with the average user experiencing a three-point drop in pain suffering on a 0-10 point scale immediately following cannabis consumption.

With a mounting opioid epidemic at full force and relatively few alternative pain medications available to the general public, scientists found conclusive support that cannabis is very effective at reducing pain caused by different types of health conditions, with relatively minimal negative side effects.

Chronic pain afflicts more than 20 percent of adults and is the most financially burdensome health condition that the U.S faces; exceeding, for example, the combined costs of treating heart disease and cancer.

“Our country has been flooded with an over-prescription of opioids medications, which then often leads to non-prescription opioid and heroin use for many people. This man-made disaster is killing our families and friends, regardless of socio-economic status, skin tone, and other superficial human differences” said Jacob Miguel Vigil, one of the lead investigators of the study, titled “The Effectiveness of Self-Directed Medical Cannabis Treatment for Pain,” published in the journal Complementary Therapies in Medicine.

Vigil explains, “Cannabis offers the average patient an effective alternative to using opioids for general use in the treatment of pain with very minimal negative side effects for most people.”

The researchers relied on information collected with Releaf App, a mobile software program developed by co-authors Franco Brockelman, Keenan Keeling and Branden Hall. The app. enables cannabis users to monitor the real-time effects of the breadth of available cannabis-based products, which are always variable, of course, given the complexity of the Cannabis plant from which these products are obtained.

Since its release in 2016, the commercially developed Releaf App has been the only publicly available, incentive-free app for educating patients on how different types of products (e.g., flower or concentrate), combustion methods, cannabis subspecies (Indica, Sativa, and hybrid), and major cannabinoid contents (THC and CBD) affect their symptom severity levels, providing the user invaluable feedback on their health status, medication choices, and the clinical outcomes of those choices as measured by symptom relief and side effects.

Scientifically, software like the Releaf App enables researchers to overcome the inherent limitations of government-funded clinical trials on the real-time effects of Cannabis, which are rare in general, but also often limited by onerous federal regulations, including its Schedule I status (no accepted medical use and a high abuse potential) and the mandate that investigators use the notoriously poor quality and low potency cannabis products supplied by the National Institute of Drug Abuse.

“Even just rescheduling cannabis just from Schedule I to Schedule II, i.e., classifying it with fentanyl, oxycodone, and cocaine rather than heroin and ecstasy, could dramatically improve our ability to conduct research and only would require that the DEA recognizes that accepted medical uses for cannabis exist, as clearly evidenced by our results and the flourishing medical cannabis programs in the majority of U.S. states,” pointed out co-author Sarah Stith.

Among the study’s findings the greatest analgesic responses were reported by people that used whole dried cannabis flower, or ‘buds,’ and particularly cannabis with relatively high levels of tetrahydrocannabinol, otherwise known as THC. The more recently popularized cannabinoid, cannabidiol or CBD, in contrast, showed little association with the momentary changes in pain intensity, based on the massive database explored in the study.

“Cannabis likely has numerous constituents that possess analgesic properties beyond THC, including terpenes and flavonoids, which likely act synergistically for people that use whole dried cannabis flower,” said Vigil, “Our results confirm that cannabis use is a relatively safe and effective medication for alleviating pain, and that is the most important message to learn from our results. It can only benefit the public for people to be able to responsibly weigh the true risks and benefits of their pain medication choices, and when given this opportunity, I’ve seen numerous chronic pain patients substitute away from opioid use, among many other classes of medications, in favor of medical cannabis.”

“Perhaps the most surprising result is just how widespread relief was with symptom relief reported in about 95 percent of cannabis administration sessions and across a wide variety of different types of pain,” added lead author of the study, Xiaoxue Li.

The authors do caution that cannabis use does carry the risks of addiction and short-term impairments in cognitive and behavioral functioning, and may not be effective for everyone. However, there are multiple mechanisms by which cannabis alleviates pain suffering. In addition to its anti-inflammatory properties, cannabis activates receptors that are colocalized with opioid receptors in the brain. “Cannabis with high THC also causes mood elevation and adjusts attentional demands, likely distracting patients from the aversive sensations that people refer to “pain,” explains Vigil.

“When compared to the negative health risks associated with opioid use, which currently takes the lives of over 115 Americans a day, cannabis may be an obvious value to patients. Chronic opioid use is associated with poorer quality of life, social isolation, lower immune functioning and early morbidity. In contrast, my own ongoing research increasingly suggests that cannabis use is associated with a reversal of each of these potential outcomes,” said Vigil

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Scientists at The Scripps Research Institute in La Jolla, California, have found that THC inhibits the formation of amyloid plaque, the primary pathological marker for Alzheimer’s disease. The study to be published in Molecular Pharmaceutics says, THC is “a considerably superior inhibitor of [amyloid plaque] aggregation” to several currently approved drugs for treating the disease.

According to the new experimental study THC inhibits a protein, which acts as a accelerator of the formation of amyloid plaque in the brains of Alzheimer victims. Although experts disagree on whether the presence of beta-amyloid plaques in those areas critical to memory and cognition is a symptom or cause, it remains a significant hallmark of the disease. With its strong inhibitory abilities, the study said, THC “may provide an improved therapeutic for Alzheimer’s disease” that would treat “both the symptoms and progression” of the disease.

(This story has been updated with the DEA’s response on finding a testing lab.)

Hemp farmers and industry advocates are alarmed that federal agriculture officials have brought drug enforcement back into the fold to ensure that cannabis produced for hemp in the United States does not exceed the acceptable limit of 0.3% THC.

The U.S. Department of Agriculture’s interim federal rules for hemp production, released Oct. 31, require that only laboratories registered with the U.S. Drug Enforcement Agency (DEA) will be qualified to conduct THC testing of hemp crops.

Industry members worry the limitation could delay THC testing and create bottlenecks, especially in remote areas far from a DEA-registered lab.

“It appears that many of the existing (DEA) labs don’t have the equipment and capacity to service the hemp industry,” cannabis attorney Shawn Hauser of Denver-based firm Vicente Sederberg said last week during a webcast with Hemp Industry Daily.

The rules propose that the U.S. Department of Agriculture (USDA) may establish an approval process for labs that want to offer THC testing services. Those labs would need certification by the International Organization for Standardization (ISO), which could be a suitable alternative, according to Hauser.

If the USDA chooses to approve testing labs, it could accredit laboratories that perform to a certain quality, in addition to requiring a particular ISO accreditation.

This is a departure for the DEA, which does not require labs to be accredited to handle narcotics. However, the USDA-approved labs would still have to be registered with the DEA.

The alternate testing protocol “would give USDA the proper oversight of the laboratories doing the testing, providing quality assurance and control procedures that ensure a validated and qualified analysis, and defensible data,” the interim rules state.

The USDA is requesting comments on the requirements for laboratories and will likely need to make changes regarding this issue, Hauser said.

Lab availability a mystery

The rules state that DEA-registered labs – and, potentially, USDA-approved labs – will ultimately be listed on the Agriculture Department’s Domestic Hemp Production website.

However, DEA spokeswoman Katherine Pfaff told Hemp Industry Daily that agency policy conflicts with that statement.

“DEA is still working through many of these details with USDA,” Pfaff wrote in an email to Hemp Industry Daily, which asked about the testing plans.

“We do not release information about specific DEA registrants, so we do not provide a list of labs registered with the DEA.”

Meanwhile, laboratories looking for information on becoming DEA-registered to perform chemical analysis should visit the DEA Diversion Control Division website to apply for an analytical lab registration. Form DEA-225 should be used, according to Pfaff.

DEA anxiety

For some, the idea that the DEA is involved at all is upsetting.

Denver attorney Frank Robison said he counted the number of times DEA was mentioned in the rule. By his calculation, the agency had 42 mentions, compared with two references about banking.

“It just shows that the priorities within the rule are skewed against the farmer in a way that would prohibit and restrict commerce as opposed to promoting commerce,” Robison told Hemp Industry Daily.

“And, in my view, the intent of Congress is to promote a commercial environment and commercial industry for hemp.

“We’re worried about 1,000 parts-per-million THC, when we should be worried about getting this industry off the ground and helping American farmers, providing them access to capital and making sure that their crops are insured.”

Hemp industry consultant Ryan Pettigrew said it makes sense the DEA would be involved, considering that crops testing hot would technically be marijuana, which remains a Schedule 1 drug on the controlled substances list.

“That one was obvious – there was really no argument to it,” Pettigrew told Hemp Industry Daily.

“Granted, in a perfect world, they would just deregulate everything,” he continued. “But that’s just not going to happen.”

The USDA predicted that about 20% of hemp samples collected in 2020 would exceed the 0.3% THC limit and need to be destroyed. The USDA rule lays out no plan to appeal testing results.

Criminals, not farmers

Robison contends that for the micro levels of THC involved with hemp production, the USDA shouldn’t have to involve drug law enforcement.

“The USDA should have the capacity to manage 1,000 parts-per-million THC,” Robison said.

The DEA should be focusing on drug criminals, not farmers, he said.

“The folks that know how to work with crops are the people that should be managing the data and working with these farmers, not a law enforcement agency charged with pursuing crystal meth and fentanyl criminals,” Robison said. “They should not be even in the same ballpark.”

Further, he continued, the U.S. Congress did not mean to scare farmers and put them on a watch list, but that’s the message the USDA rules send.

Legitimate American farmers may have been sold “bogus seeds” or seeds that tested below 0.2% THC in Europe but went hot when grown in a warmer U.S. climate, he said.

“Now, all of the sudden, because they wanted to be part of this congressionally opened-up market, why now are they in a DEA database?” Robison said.

“Congress passed a law to promote the hemp industry in the United States of America,” he said.

“The regs that just came down, the No. 1 thing that they accomplished, if I was a farmer, was to scare me and to provide me with a doubt of whether I should be entering this market until there is additional clarity about whether or not I’m committing a criminal activity.”

Adult-use cannabis sales fell sharply in September in every Eastern Canadian market except Quebec, a reflection of the industry’s inability to open new stores to meet consumer demand in those provinces.

Overall sales of recreational marijuana in Ontario, Quebec, Newfoundland, Nova Scotia, Prince Edward Island and New Brunswick declined 5.5% to 71 million Canadian dollars ($53 million) in September from the previous month.

The fall would have been steeper had Quebec not recorded a 5% increase to CA$26 million.

Quebec was the only province among the group to add to its roster of cannabis stores in the month by increasing its outlets by four, according to the Société québécoise du cannabis.

Canada’s largest consumer market, Ontario, remains stuck at 24 cannabis stores.

Ontario experienced a 6% decline in the amount of money spent on marijuana, recording CA$31.7 million in sales.

The steepest declines in Eastern Canada were seen in New Brunswick, which saw sales collapse 40% to CA$3.2 million, and PEI, where receipts fell 15% to CA$1.4 million.

Eastern Canada’s struggles helped pull down Canada’s overall sales in September to CA$123 million, a month-over-month decline of 2.4%.

Western Canada – where new cannabis stores opened their doors in September – experienced a rise in retail sales.

Cumulative receipts for adult-use cannabis products in British Columbia, Alberta, Saskatchewan and Manitoba rose 2.6%, to CA$50.8 million.

Alberta had 7% more stores licensed in September (283) versus August (265), said Chris Damas, editor of Ontario-based BCMI Cannabis Report.

He also noted that the number of private stores in British Columbia rose to 77, with another 157 in the queue.

“It has been shown that consumers prefer conveniently located bricks-and-mortar stores to buying at government online stores, so they can see and smell the product they are buying, and to ensure confidentiality,” he said.

Damas said store openings in underserved locations are important for retailers, whether they’re privately or provincially owned.

“They allow the legal industry to better penetrate markets currently served by illicit dealers and illegal online dispensaries,” he noted.

‘Market has spoken’

With new products (edibles, extracts and topicals) not hitting store shelves in meaningful quantities until next year, store openings will continue to be the most important driver of retail sales growth – or lack thereof – in Canada for some time.

Craig Wiggins, managing director of market researcher TheCannalysts, said consumers do not like shopping online for a variety of reasons.

“The market has spoken,” he said. “Shoppers want to go and peruse a store. New consumers into the market definitely want to go into a store versus doing it online.

“Online for a new consumer is just way too difficult to figure out where to start.”

The German federal government will buy at least 650 kilograms (1,433 pounds) of medical cannabis flower from domestic producers for approximately 1.5 million euros ($1.66 million) per quarter, which sets the average wholesale price at 2.3 euros per gram.

The wholesale price implies that the high margins medical marijuana companies once enjoyed in that market could soon become a thing of the past.

The German subsidiaries of Canadian-based Aurora Cannabis (250 kilograms per quarter) and Aphria (250 kilograms) as well as Germany-headquartered Demecan (150 kilograms), were the three winners of the cultivation tender.

They must supply the Federal Institute for Drugs and Medical Devices (BfArM) with a combined total of 650 kilograms per quarter. The BfArM expects to receive the first shipments at the end of 2020.

The government and companies might agree to increase the quantities up to 10% per year over the four-year period.

The companies have not disclosed the prices they offered during the application process, and the government did not reveal how much it will pay each company – only the total.

However, applicants had an incentive to offer a very low price to win the tender, because scoring points related to price accounted for 40% of the criteria.

The government also mentioned the option of buying 325 more kilograms per quarter, also at 2.3 euros per gram.

However, according to Marijuana Business Daily‘s interpretation of the contract between the BfArM and the suppliers, the price for the optional extra kilograms should be lower, something that would drive the average price even further down.

The BfArM did not immediately respond to an MJBizDaily request for comment.

Packaged flower to be supplied

Aphria, Aurora and Demecan will supply the BfArM with packaged flower. German authorities also said that a distribution application process will be launched in the future.

This means producers will not be allowed to supply pharmacies with their domestically grown cannabis through the distribution channels they already spent millions of euros establishing unless they win the future distribution tender.

But they will be able to continue importing from other countries for pharmacy distribution in Germany.

Domestic supply is not expected to be enough to cover demand, meaning the market will continue to rely on imports.

Cannabis producers based in Australia, Colombia, Denmark, Greece, Lesotho, Malta and other countries are planning to join those in Canada, the Netherlands and Portugal in filling the gap. But if price compression continues, making any money will be challenging.

In 2018, Germany imported about 3,000 kilograms of flower.

In the first half of 2019, imports amounted to 2,500 kilograms, indicating that demand might double again this year and could reach as much as 6,000 kilograms.

Assuming demand continues to rise to 10,000 kilograms in 2021, domestic production would cover at least 26% of the market. It could potentially cover about 40% of the market if the option for extra quantities is executed.

Germany is the largest medical cannabis market in Europe – larger than all other countries on the continent producing the medicine combined.

High margins not the norm

The price at which domestically produced cannabis will be sold in Germany confirms the margin depletion that MJBizDaily has been reporting throughout the past year.

Current high retail prices of medical cannabis in Germany – about 20 euros per gram – are an anomaly created by a combination of:

• A domestic cultivation tender that suffered many delays until it was finalized.
• The low number of suppliers of flower from European Union Good Manufacturing Practice-certified facilities around the world that can export to Germany.
• A pharmacy markup of about 100% that the law mandates.

All these factors are changing quickly.

Domestic production is set to kick in by the end of 2020, more countries than ever are planning to supply Germany and the government is in ongoing discussions to reduce retail prices.

In Italy, most of the medical cannabis supply is imported from the Netherlands, with Aurora being the only Canadian supplier of a small slice of the market after winning a contract in which it offered to sell flower to the government at an average price of 1.73 euros per gram.

Recently, the Italian government canceled a portion of that supply agreement.

In Luxembourg, Aurora was the “exclusive supplier” to the government, selling flower at 2.5 euros per gram.

On Oct. 21, Canopy announced it was the new “exclusive supplier” for Luxembourg.

Canopy did not immediately reply a media query about the price at which the company sells in Luxembourg.

Costly indoor grows

German growers are incurring huge capital expenditures to build bunker-style, indoor cultivation facilities required by German regulations.

In the company’s third-quarter 2019 earnings conference call, Aphria’s interim CEO, Irwin Simon, said capital expenditures required for the company’s German facility were 25 million euros, of which 8 million euros had already been spent.

Even in the most positive scenario – assuming the government buys as much as legally possible throughout the whole four-year period contract with domestic suppliers – it is not clear how companies will be able to make any profit considering both the quantities and the price agreed upon with the government are very low.

Demecan announced last month that it raised 7 million euros, but the company has not replied to requests for comment asking if more capital raises would be needed to be fully funded to build the facilities as agreed to with German authorities.