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Food Archives - Hemp Market Report

Julie AitchesonJulie AitchesonFebruary 19, 2020
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6min00

Even though the FDA has expressed its displeasure at adding CBD to food, that hasn’t stopped hamburger chains from tossing in some cannabidiol to enhance their burgers. The trend was started last year when on April 20th   of 2019 (yep, that’s 4/20), Carl’s Jr. became the first fast-food chain to sell a CBD burger at one of its franchises in Denver, Colorado. The ambitiously named “Rocky Mountain High: Cheeseburger Delight” was composed of two beef patties, pickled jalapenos, pepper jack cheese, fries, and a Santa Fe sauce infused with 5mg of CBD. And the price? $4.20, of course.

The “Rocky Mountain High”, which was only available for one day, was more of a concept test than a menu change, and given that the location sold more than 100 of them within the first hour and ran out entirely by 4 pm, it was one that the CBD burger passed with flying colors. 

That has sparked Colorado-based Illegal Burger to offer what it calls its biggest differentiator, “its exclusive line of CBD products.” The chain is using the idea of CBD burgers as a way to entice new franchisees. On its website, it states, “As an Illegal Burger franchise owner, you will: Be part of the first CBD restaurant franchise in the U.S.” The company backs its decision by saying, “Cannabinoid, or CBD, is attributed to many health benefits. Recently, the FDA approved of its use to treat two forms of childhood epilepsy, and consumers report it positively impacting anxiety, sleep disorders, and even chronic pain.”

The CBD burger was good for business and, according to reporting by Mike Adams at Forbes.com, even healthier for consumers than a dose of CBD all by itself. Adams cites a study that dosed two separate groups of participants with CBD. One group was placed under fasting conditions (no breakfast), while the other group was fed a high-fat meal. Those who partook of the high-fat meal before consuming a dose of CBD appeared to have a higher absorption rate (as demonstrated by a higher concentration of CBD in their systems) than their fasting counterparts.

So will Carl’s Jr. and Illegal Burgers along with the absorption rate study lead more fast food restaurant chains to jump on the CBD bandwagon in the months and years to come? To a large extent, this depends on how far the FDA goes in doubling down on restrictions prohibiting the addition of CBD to foods and dietary supplements in interstate commerce. Food safety officials in Maine, New York City, Ohio, North Carolina, South Carolina, Florida, and Georgia have all banned the addition of CBD to food.

An April 2019, an  Inverse article on the Carl’s Jr. CBD burger reveals that the Federal Food, Drug, and Cosmetic Act prohibiting any active substance in a pharmaceutical (which, thanks to the advent of  FDA-approved anti-seizure medication Epidiolex, CBD is) from being added to food products further empowers regulators to crack down on the issue. Yet despite the fact that these laws are clearly worded with little room for interpretation, their enforcement still appears to be discretionary, as both the FDA and hemp companies scramble to definitively ensure that the CBD available to the public is pure, potent, and safe.

While private chefs and smaller-scale restaurants are still tempting fate (and upping their prices) to bring CBD and cannabis to the dining public, higher-profile establishments are taking the precautionary principle until federal regulations and law enforcement sort themselves out. Still, given that a National Restaurant Association survey identified CBD and cannabis-infused foods as the top restaurant trend in 2019, there’s still a chance that American consumers might be seeing some “special sauce” on offer at their local drive-thru. 


Julie AitchesonJulie AitchesonDecember 18, 2019
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4min00

Whether as a critique of consumer culture, out of economic necessity, or as the marker of a hipsteresque devotion to all things local and artisanal, DIY (Do It Yourself) culture is alive and thriving in the U.S., and CBD is its newly claimed territory. Recipes for products ranging from gummies to facial scrubs and beard wax to candles and personal lubricant jostle for space online. Message boards teem with recommendations, refinements, and cautionary tales for CBD consumers looking to save, or earn, a few extra bucks by taking a walk on the manufacturing side. 

A small 30ml bottle of CBD oil can cost up to $300 depending on the quality and strength per dose. Many who find previously unattainable relief with CBD for ailments from the minor to the debilitating but struggle to afford the price tag of the more potent formulations are now buying CBD hemp flower by the gram and crafting their own products at home. 

The process in most cases is not overly onerous, although the hemp flower buds must be “decarboxylated” before use, which is an intimidating term that simply refers to the process of putting the hemp buds under low heat (between 225-245 degrees Fahrenheit) for about an hour in order to activate their chemical and pharmacological effects. Afterwards, the hemp buds are ready to be used for teas, cocktails, baking, infused into oil, etc. It sounds pretty straightforward, but there is still room for frustrating and costly user error to occur. Case in point, a month ago I was gifted a gallon bag full of CBD flower (about $500 worth) from friends who lease their land to a local CBD company for hemp cultivation. I was eager to take a stab at DIY CBD oil, and felt confident enough in my herbal training that I would end up with an abundance of potent medicine. My friends had already decarboxylated the buds, so all I needed to do was borrow my parents’ crock pot (mine was far too small), add the buds and some olive oil, and set the whole thing on “low”. Unfortunately, the “low” setting on my parents’ ancient crockpot was sufficient to burn my lovely little buds to brittle black bits. The contents ended up smelling like a Thanksgiving dinner gone horribly wrong- a Thanksgiving dinner made from $500 worth of groceries. 

My own plans for consuming and gifting homemade CBD oil might be temporarily on hold, but there are still plenty of would-be makers and entrepreneurs out there eager to get into the CBD game. The abundance of articles like this Business News Daily how-to for starting one’s own online CBD business point to a burgeoning participation in this exploding market. If a recent study cited by Iris Dorbian in Forbes Magazine is accurate and the CBD market could indeed surpass $20 billion dollars by 2024, there is plenty of room for DIYers and entrepreneurs alike to work for CBD, and make CBD work for them. 

 


Julie AitchesonJulie AitchesonNovember 15, 2019
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2min00

Product: Hemptown Chew CBD Gum (Mint Flavor) by Hemptown USA

Company: Hemptown USA

Hemptown Chew CBD Gum has the look of a TUMS tablet, but softens easily in the mouth with a subtle yet strong enough mint flavor to overpower any of the musty grassiness of many CBD-infused products. As with other “natural” chewing gums using sweeteners such as sorbitol, mannitol, xylitol, and/or stevia (Hemptown Chews uses all of these), the flavor quickly dissipates while the texture becomes rubbery, making chewing laborious. However, with a stated fifteen milligrams of CBD and five milligrams of CBG (Cannabigerol, the “chemical parent” of CBD and THC) per serving, Hemptown Chews have a lot more to offer the consumer than a more supple stick of Wrigley’s.

The packaging is pleasingly minimalist, with two servings per pouch. The fact that the gum is sugar-free, gluten-free, and has zero calories appealed to my inner health nut, while the high concentration of CBD and of CBG prompted me to keep working the gum over after it had lost its flavor and initial marshmallowy texture. Within about five minutes, the familiar lassitude I associate with CBD descended with a pleasant drop of my shoulders and a loosening in my chest that signaled a switch from the fight-or-flight mode of my workday to the rest-and-digest vibe I slip into once I clock out for the evening. Unfortunately, it was only twelve-thirty.

Though the physical relaxation was pleasant, for me the effect on my cognitive function was too strong. I enjoyed the gum’s swift action and its potency (if not the mouthfeel and flavor after the first minute or so) but would restrict my use of this product to times when efficiency and laser focus are not required. While perhaps well-suited for those CBD users with a higher tolerance, for me, Hemptown Chew is a “functional gum” whose function will be purely recreational.


StaffStaffOctober 30, 2019
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6min00

Big Beer and crafty entrepreneurs work to expand their reach into the next functional fad: hemp-infused beverages.

As a non-psychoactive alternative to its federally illegal counterpart known as THC, CBD has been adopted by the wellness industry in the form of lotions, tinctures, and gummies. The rapidly increasing availability of CBD products paired with the growing health trend in the US has opened minds to hemp products – and space for their sale in the beverage industry.

Renown for its health benefits, CBD enthusiasts tout the substance’s ability to reduce anxiety, aid in sleep, and alleviate pain and inflammation.

Could it be that CBD spritzers and sodas replace alcoholic drinks as a functional favorite? Not so fast. But entrepreneurs and big beer companies alike are finding opportunities in the booming CBD market.

Marcus Charles, CEO, and owner of cleen:craft, a CBD beverage startup, sees a trend. “If you look at the number of drinks sold, the next generation of folks, they just don’t drink as much,” he told SIP Northwest.

In fact, The Wall Street Journal reports that U.S. consumption of alcohol dropped by 0.7 in 2017 and an additional 0.8 percent in 2018.

Add those stats to fact that industry analysts estimate that the CBD category will grow into a $1 billion market by 2020 – $600 million of which is thanks to CBD beverages – and it becomes clear why large and small companies alike are hopping in.

Big Beer Reaches for Canna-Beverages

While soft drink companies like Coca-Cola and Pepsi are hesitant to attach their names to adult-oriented beverages, big beer companies are eagerly making their move.

Last year, Anheuser-Busch, makers of Budweiser, Busch, and a host of other alcoholic products, announced they were teaming up with Canadian medical marijuana company Tilray to research hemp-infused products. Notably, the beverages would be non-alcoholic as the mixing of the two substances is currently prohibited by law.

Citing increased demand for nonalcoholic beverages, Coors jumped at the opportunity to fill the niche. A Coors subsidiary called Apothecary Dram stocked a nonalcoholic CBD infused soda on its shelf in Denver. Dubbed Colorado’s Best Drinks (CBD for short), the beer behemoth is offering CBD-infused root beer and cherry cola flavors to start. 

Conveniently located California brewery Lagunitas upped the ante by creating a CBD and THC beverage they dubbed Hi-Fi Hops, available in its home state and Colorado, 2 out of the 10 states where recreational marijuana is legal.

And Constellation Brands, owners of Corona and Svedka, struck a $4 billion deal with Canadian hemp company Canopy Growth, which has been granted a permit to grow and produce hemp products by New York state.

Challenges Bubbling Up

As an emerging industry, the hemp-infused beverage sector is not without its challenges.

Most notably, CBD is not water-soluble, oil and water don’t mix. This means that the creation of CBD-infused beverages that are truly effective requires an extra step. Companies need to use a binding agent so ingested CBD has the same effect when consumed sublingually.

The second challenge is navigating the hazy and constantly evolving legality of CBD-infused products. The Alcohol and Tobacco Tax and Trade Bureau has recently announced a process for getting hemp-infused drink products and labeling approved. If not followed, they may face a cease and desist, as Invasive Species Brewing did when launching its craft beer infused with cannabis terpenes oil.

Author:

“Tee Corley graduated with a degree in Humanities & Culture from Hampshire College in 2012. Since then, she’s written professionally for B2B marketing agencies, online publications, and contributed articles to best-selling books. She is curious, adventurous, and ambitious. With an apparent inability to accept how people “should” behave in society, she has thru-hiked two long-distance trails and continues to travel as much as possible.”


William SumnerWilliam SumnerJanuary 23, 2018
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3min00

Bit by bit and block by block, more and more cannabis companies are moving into the cryptocurrency and blockchain market.

Today SinglePoint, Inc. (SING), a full-service mobile technology provider that services the cannabis industry through its subsidiary company SingleSeed, announced a letter of intent (LOI) to acquire Bitcoin Beyond, a software platform that allows retail merchants to accept Bitcoin payments through an existing point-of-sale device.

Bitcoin Beyond was primarily developed to service the legal cannabis industry. With adequate banking services in short supply as well as United State Attorney General Jeff Sessions’ renewed pledge to crack down on the industry, many cannabis business owners are seeking alternative forms of payment, such as Bitcoin and other forms of cryptocurrency, to protect themselves from federal interference and the vagaries of everyday crime.

SinglePoint expects the acquisition, which is valued at $1 million, will help allow the company to provide business owners and consumers a full end-to-end retail experience. Built on a popular technology stack with encrypted merchant data and best security practices in mind, Bitcoin Beyond has been designed to easily integrate with existing POS frameworks and allows merchants to add means of payment like Bitcoin or SinglePoint’s own investment property Weedcoin.

“We are thrilled with this opportunity. Acquiring Bitcoin Beyond put us ahead of what we believe merchants have access to now. This platform has by far the easiest user interface we have seen in the market, and we are confident merchants will be quick to adopt this solution as it stands as the sole alternative to traditional options offered to the cannabis industry,” staid SinglePoint President Wil Ralston in a statement.

SinglePoint hopes to continue to expand into the blockchain market and is currently in negotiations to acquire another, yet unnamed, blockchain centric company.

SinglePoint Partners with “Shark” Kevin Harrington

Earlier this month, SinglePoint began expanding its cryptocurrency footprint when the company announced a partnership with serial entrepreneur and original Shark Tank “Shark” Kevin Harrington.

As part of the deal, Harrington will work with SinglePoint’s cryptocurrency division to promote SinglePoint’s bitcoin exchange and bitcoin payment platform. Harrington will also serve as the public face of the company’s national television campaign, which recently began production last week and is now in editing and post-production. The television ad campaign is set to air on major financial and news networks, such as CNN and Fox News.


Debra BorchardtDebra BorchardtJanuary 16, 2018
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3min00

Cannabis packaging company Kush Bottles, Inc. (KSHB) reported rising revenue and net income for its first fiscal quarter of 2018, for the period ending November 30, 2017. Revenue rose 258% to $8.85 million over last year’s $2.4 million and net income was $94,615 versus last year’s net loss of $161,000. Gross margins fell from 34% to 30% as business increased in the lower margin vaporizer category.

“We entered fiscal 2018 with excellent momentum as we saw the impact of the strategic initiatives implemented throughout 2017 start to take hold,” said Nick Kovacevich CEO of Kush Bottles. “This strength in the business led to net profits of $94,615 in fiscal Q1 2018.  We also saw our cash balance increase to $5.5 million, which we plan to invest towards inventory purchasing, development of proprietary products, and other strategic initiatives.”

The company’s gross profits rose to $2.6 million in the quarter over last year’s $834,643. Total operating expenses also increased to $2.5 million over last year’s $971,624.

Kovacevich added, “During the first fiscal quarter of 2018, we saw the release of California’s new temporary regulations for medical and adult-use cannabis sales, which took effect on January 1, 2018. California is not only the U.S.’s largest cannabis market but also our home market where we have already extensively invested in sales, marketing, and infrastructure. We consider the legalization of adult-use cannabis sales to be a major opportunity to scale the business throughout 2018 and beyond, and we have made significant headway to establish the Company as a leader in this market. Many of our clients have been granted temporary licenses and we are working with them closely during this hectic transition period as California finalizes its permanent regulations over the next 6 to 12 months.”

Last week, the company announced management changes. Ben Wu, who has served as Chief Operating Officer since 2014 was stepping down and  Jim McCormick will assume the role of Chief Operating Officer in addition to continuing to serve in his current capacity as Chief Financial Officer.

The company will host a conference call after the market closes on Tuesday. The stock was lately trading at $6.70 for a year high, quite a nice move over the 52-week low of $1.61.

 


Debra BorchardtDebra BorchardtDecember 19, 2017
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6min00

Canadian company Aurora Cannabis (ACBFF) is making a strategic investment in Micron Waste Technologies and in return will receive a cut of the gross revenues. Micron Waste (MICWF) is a developer of a proprietary digester solution that treats organic waste which can be used for the waste generated from the cultivation and production of cannabis products. Aurora produces and distributes medical marijuana in Canada.

Terms Of The Agreement

Micron Waste will pay Aurora a royalty equal to 4% of gross revenues generated by Micron, but Micron will keep all intellectual property pertaining to its digestion system. Aurora will have the right to subscribe for up to 6,000,000 shares of Micron at a subscription price of $0.34 per share for aggregate subscription proceeds of $2,040,000 million which represents a 9% interest in Micron on a non-diluted basis immediately post-investment. Upon the first successful sale of a digester within the cannabis industry, Micron will give 2 million shares to Aurora.

New Technology

According to the company statement, Micron has developed a new technology, based on aerobic digestion and subsequent treatment, that converts organic waste into clean water that meets municipal effluent discharge standards. The effluent from currently available digester-based treatment systems of organic waste does not meet municipal discharge standards and requires costly further treatment. Many generators of the organic waste elect, instead, to use municipal landfill sites for their organic waste, which is costly and has a negative impact on the environment. The merits of Micron’s technology have been successfully demonstrated with a grocery supermarket chain located in British Columbia, Canada, and Micron has entered into a Memorandum of Understanding with the group to plan for additional installation of Micron’s organic waste digester units at other locations in BC.

Management Comments

“The treatment and disposal of organic waste in the cannabis industry is a time consuming and costly exercise that is subject to strict regulation by Health Canada,” said Terry Booth, CEO of Aurora. “Micron’s solution promises to be a very elegant, highly efficient and low-cost alternative that will also have a positive impact on the environment. In making this investment, we anticipate benefiting not only from the positive impact on our operations, but also by being exposed to the upside potential of Micron’s commercial development. We look forward to collaborating with Micron in furthering the market reach of this very promising technology.”

“Aurora’s investment provides additional funds to accelerate diversification into other sectors, such as supermarkets, quick-serve restaurants, agricultural operations, and hotels, which are all faced with high organic waste disposal costs,” said Rav Mlait, CEO of Micron. “While our goal has always been to deliver solutions that have a positive impact on the environment, the only way to truly make a difference is by having a value proposition that provides a strong commercial rationale for adoption.”

The Battle With CanniMed Continues

While Aurora is making deals with Micron, the company does not want its potential new acquisition CanniMed (CMMDF) to make any of their own deals. On Monday, Aurora filed a dissident circular against CanniMed’s planned acquisition of Newstrike Resources. Aurora believes that the Newstrike deal is inferior to their own offer to acquire CanniMed.

Booth said, “It doesn’t take a genius to see that a company with no revenues, no sales license, no patients, no intellectual property of significant value, no track record, and not enough funds to continue operating and funding its own expansion, should not be worth giving 35% of CanniMed away to Newstrike shareholders.”

CanniMed has been fighting a hostile takeover by Aurora Cannabis. A hearing is set for December 20 with the Ontario Securities Commission regarding the takeover and whether Aurora proceeded improperly. In the meantime, CanniMed has been putting several poison pills in place to fight the potential acquisition.

 Performance

Aurora Cannabis was lately trading at $5.46, down slightly from its 52-week high of $6.86. Micron Waste shares were lately trading at 43 cents, jumping 12% on the news. CanniMed was lately trading at $15.23, also down from its 52-week high of $17.15, but up dramatically from its year low of $5.66.


Debra BorchardtDebra BorchardtNovember 27, 2017
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5min00

A new report from GreenWave Advisors on the cannabis banking industry estimates that California will collect $5.2 billion once the state implements its adult use marijuana market. Including sales tax, that number could rise to $6.2 billion.

Analyst Matt Karnes wrote, “With other new state markets planned for 2018, we estimate total legal marijuana retail revenues of approximately $12.1 billion, or $14.5 billion including sales tax.” Karnes continues to believe that by 2021, all 50 states and Washington D.C. will have some sort of legalized medical marijuana if not a fully legalized market which would result in retail revenues of $30 billion ($36 billion including sales tax).

Most banks do not service cannabis companies with GreenWave estimating that only 5% of financial institutions are on the record as having a relationship with a known marijuana business. Karnes believes this lost opportunity for the banks will drive new federal legislation. In the meantime, the industry has been pursuing its own solutions.

Dispensaries usually have ATM machines available for cash purchases and some engage in a cashless ATM, which essentially functions as a debit withdrawal to the dispensary. Others use a third party to transact the purchases, prepaid cards or mobile wallets. These wallets transfer money from the shopper’s bank account to the dispensary. Some of these mobile wallet companies include PayQwick, CanPay, Tokken and SingleSeed.

GreenWave noted that this banking and payment challenge has created opportunity in the industry. “The land grab is significant (over 7,000 financial institutions in the U.S.) and the successful rollout of these product offerings will likely mitigate one aspect of cannabis investment risk.”

Cannabis Fin Tech Solutions

Kind Financial was a cannabis banking pioneer with its Link to Banking (LTB) platform. The company is headed by former FinCen official Tom Fleming. “LTB assists financial institutions comply with regulatory guidelines by leveraging a proprietary technology platform that tracks and analyzes transactional data enabling banks to identify reportable suspicious activity,” wrote Karnes. The KIND Financial company also provides software that tracks cannabis from seed-to-sale and can track the flow of funds.

Hypur is a software platform that can audit a company in real time to make sure it is in compliance with the law. It can also provide a connection to the point-of-sale system and allow the banks a way to reconcile cash collections with deposits. This company includes John Vardaman, who worked at the Department of Justice and helped to pen the Cole Memorandum.

Safe Harbor Banking Solutions is an original player that launched in Colorado and more recently in Hawaii. Its platform provides an automated front office to help banks bring on marijuana businesses and monitor them. It also handles the back office work of compliance and monitoring. It charges a subscription fee for the service and will soon be available in eight additional states with plans for 20 states in 2018. Safe Harbor is a subsidiary of Partner Colorado Credit Union.

Banking Solutions

Since the big banks have refused to engage with cannabis companies, credit unions have stepped up and Colorado led the way.

The Fourth Corner Credit Union applied for a master account at the Federal Reserve Bank of Kansas City and was denied. The bank filed an appeal. The San Francisco Federal Reserve Bank has shown its willingness to take these types of deposits, so it’s possible that could help Fourth Corner in its quest.

Partner Colorado Credit Union says it handles $80 million a month in marijuana business deposits but is limiting its exposure to the industry to only 10% of its assets.

Legislation

“The Secure and Fair Enforcement Banking Act of 2017 (Senate Bill S1152 and House Bill HR2215) has been proposed to create protections for depository institutions that provide financial services to cannabis-related businesses,” said Karnes. “While there is support on both sides of the aisle, the timing of a vote is unclear.” Karnes maintains that the Trump administration’s stance toward banking deregulation could be a positive for the cannabis industry.

Karnes concluded, “There is no one answer and we think there will be a patchwork of alternative offerings.”


Debra BorchardtDebra BorchardtNovember 14, 2017
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4min00

Getting a cannabis cash into a Federal Reserve has been like finding the holy grail. In Colorado, credit unions have sued in order to be able to establish a master account, which is the key to cannabis banking. This past summer, the Fourth Corner Credit Union won a partial victory when a court said that the Federal Bank of Kansas City couldn’t block access.

Apparently, while that was happening in Colorado, HARDCAR Security found the grail in the state of California. The company has been secretly working in a pilot program for the last four to five months covering some the largest cannabis accounts in California. HARDCAR has been depositing the money in both the Federal Bank of San Francisco and the branch in Los Angeles. “No one else has been able to get into the Fed in California,” said HARDCAR Security CEO Todd Kleparis.

A bank sponsored HARDCAR with the Federal Reserve and all of its guards go through federal background checks. “We bring the money to their locations and they go through it,” said Kleperis. “Our company has moved over $25 million in a few short months.” The most important piece of this banking puzzle is that the cannabis company money is now co-mingled with regular money. It legitimizes the cash and allows it to enter into the monetary system.

Cities Also Need Help With Cannabis Cash

In addition to picking up the cannabis business money and depositing it with the bank, HARDCAR said it is also going to be assisting cities with the movement of their cannabis cash. “No other armored car company wants to take the cannabis cash,” said Kelperis, “This risk is too much. Think about all those grow sites in Desert Hot Springs. Who is going to go get it? We’re going to go to the cities and help them put all these tax revenues in the bank.”

Most of the focus on solving the cannabis banking problem has been on the plant touching businesses, but it also turns out that the municipalities were finding that their banks wanted nothing to do with the cannabis tax revenues. Kleperis mentioned that Los Angeles contemplated setting up its own bank, but that it would take years to establish. He also believes that by getting access to the Federal Reserve system, it will keep more of the money in the state and put more money back into the system. There are many stories of “backyard banks” where farmers bury cash because they have no way to bank it and worry about robberies.

HARDCAR is a company filled with military veterans and that may have made the decision for the Federal Reserve to accept cannabis cash as little easier. Or it could be that the California cannabis market will dwarf the Colorado market and that much cash floating around the state would make for a dangerous situation. Either way, it’s a huge step forward for cannabis banking and the mainstreaming of the industry’s money. Kleperis added, “It’s a huge win.”


Mitchell ColbertMitchell ColbertOctober 13, 2017
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7min00

Currencies can be backed by anything that has value. The earliest forms of currency were livestock and cowrie shells (the longest used currency in history), which pre-date metal coins. The first metal coinage was made in China around 1,000 B.C. and was made primarily from base metals (like copper or bronze) rather than precious metals (like silver or gold). In another 500 years, coins evolved to be made from silver and other precious metals. From there, the concept of money evolved further from things with actual value to things which had intangible value, and that was the birth of fiat currency, a currency backed by the faith that governments will make good on their debts.

That formerly unshakable faith in the governments of the world is quickly crumbling for many around the globe, and those skeptics of government fiat are turning to new currencies, backed by things much harder to corrupt than governments, data. Bitcoin was the first cryptocurrency to be backed by the blockchain, an unalterable, encrypted yet transparent digital ledger. Due to the “mathematical difficulty of tampering the unique IDs encrypted into each block in the chain makes Blockchain immune to fraud.”

Stop for a moment and take that in. We now have a currency that is immune to fraud, even livestock wasn’t immune to fraud (take the example of cattle rustlers). You may be wondering, if a blockchain is just a collection of encrypted data, where does the value come from? If you are wondering that, go ask the RIAA or the MPAA how valuable data is, and remember that so-called pirated data was so valuable that it got entire websites shuttered. Not only does the blockchain provide a fraud-proof source of currency, it also is highly valuable in today’s data-driven world, and likely to only become more valuable over time.

But not all cryptocurrencies are created equal, not all are supported by a blockchain, and some are backed by less conventional commodities. For example, take Cannabis Coin, a cryptocurrency backed by “pharmaceutical grade cannabis.”

While it may sound like a great idea at first, since there is a lot of money to be made in the thriving cannabis industry, this makes about as much sense as backing a currency in wheat right before prohibition was repealed. The cost of cannabis is artificially inflated because of the black market, once it becomes legal the price will plummet, as will the value of any currency backed by it. Historically, there are reasons why currencies are most often things like metal or shells that withstand the test of time, rather than things that were perishable or consumable. Think about it. Cakecoin is a lie, and a terrible idea.

To make matters worse, cannabis is still federally illegal, and if the federal government ever needed a red flag to go after a cryptocurrency I can think of nothing better than drugs, as an unfortunate legacy from The Silk Road. But really, backing a currency by something federally illegal is utterly illogical. Could you imagine a Ransomcoin, where users “mine” by doing ransomware hacks? What about a PiracyCoin, where each download also mined a fraction of the next block? There are reasons why those don’t have URLs, yet Cannabis Coin was seen to be a good idea.

Thankfully, Cannabis Coin is the only cryptocurrency that is actually backed by cannabis, though it has many copy-cats and admirers, but none foolish enough or bold enough to rely on cannabis for their value.

The Other “Cannabis” Coins

CannaCoin: Their website appears to be down, which is probably for the best.
DopeCoin: While it has some photos of cannabis plants and seeds all over the site, that is all it has relating to cannabis.
PotCoin: This is what DopeCoin wishes it looked like with a way better site layout and press releases. Also no mention of being backed by cannabis. PotCoin appears to be a cryptocurrency attempting to offer cannabis businesses a way to bank, but a lot about it is not clear.
HempCoin: My honorable mention for Hemp History Week. HempCoin has utterly nothing to do with cannabis and certainly not hemp, it appears to be vying for the same niche as PotCoin.



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The Hemp Market Report will target news from the fast growing worlds of cannabidiol (CBD) and hemp. As a sister site to the Green Market Report, HMR will cover financial stories, but also take a look at lifestyle news as well. The Hemp Market Report will also publish sponsored content as we seek to expand our content offerings.


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