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December 14, 2019 CONTACT

Industrial Archives - Hemp Market Report

Cynthia SalarizadehCynthia SalarizadehDecember 10, 2019
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4min00

Florida authorized hemp research in 2017. In 2019, Gov. Ron DeSantis signed a bill to move ahead with commercial hemp production. This was a big step in the right direction for a generally conservative state.

The hemp-derived CBD market is booming, predicted to increase by 700 percent to a $23.7 billion market by 2023, according to the Brightfield Group. So, it is not all that surprising that the government is allowing a hemp industry to develop while remaining pretty restrictive concerning recreational cannabis initiatives within the state.

As quoted in the Sun Sentinal, Agriculture Commissioner Nikki Fried said that she predicted a “tremendous marketplace for Florida — $20 billion to $30 billion,” bringing new life to Florida farming.

Considering the profit potential for the state of Florida when evaluating the overall value of hemp as an agricultural commodity, it becomes clear that like other conservative states across the country, hemp has been selected as an economic driver to help revive farming.

In addition to the clear financial and taxation possibilities, Fried, and many others in the states, feel that hemp is needed in Florida to help farmers harmed by hurricanes and diseases that have affected the state’s largest commodity: citrus.

For farmers and government alike, Fried states that she has not “seen this type of excitement in agriculture in decades.”

Watching new infrastructures develop is one of the most exciting features to the explosion of growth following the Farm Bill.

One of these developments is the announcement by American Hemp Processing (AHP) that the design of their mobile hemp extraction unit is completed. “This is a key step in our production expansion plans that will be completed 1stquarter 2020.  At that time, we will be increasing our capacity to over 400,000lbs per month. And the exciting part is we will be able to do this remotely on the farms.”  According to Shick Park, Co-Founder and Chief Operating Officer.

These units bring significant benefits to the farmer, including cost efficiencies, reducing transportation risks, contamination, and degradation. They also increase transparency between AHP and the farmer, something that is critical to the success of their partnerships.

“This caps off a 12 month design process by our engineers and now we go to the assembly phase.  These units will take approximately 40 days each to build, and we plan to initially build 3.” Says Co-Founder and CEO Tom Richardson.  “This has been a very rewarding journey for us, from meeting farmers all over the country, to government legislators, to fine tuning the extraction process, to meeting other processors and sharing ideas, we feel very confident about the Cannabinoid Sector business.

Florida operators are gearing up to play a large part in the next big agricultural commodity. 2020 will indeed bring a rush of activity for the hemp industry in the sunshine state. Hemp derived CBD extract and products will be a major trend to keep an eye on out of that state for the coming years.


StaffStaffAugust 23, 2019
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5min00
AUTHOR: LAUREN ESTEVEZ Esq
PUBLISHER:  CANNABIS LAW REPORT

Cannabis companies have gone global, and with that expansion comes additional legal considerations. Canadian cannabis company Aurora cannabis just announced that they will now be operating in Germany, Italy, and Australia, expanding their current international portfolio. Tilray distributes its products globally across Canada, Europe, Australia and Latin America. This post will explore some of the key legal provisions to include in an international cannabis (or hemp) contract — whether it be for supply, consulting services, or a joint venture.

Due Diligence

Due diligence is an essential step in any cannabis agreement — a brand new industry and a rapidly expanding market mean that opportunities abound. That being said, it’s essential to conduct thorough due diligence of any potential business partner, and if anything, international deals should be subject to even further review since you will often be dealing with legal regimes that differ from your own. As a start, make sure you have visited the facility, met with the business owners in person, thoroughly reviewed all company documents produced, and communicated with local regulatory agencies.

Choice of Law & Dispute Resolution

When you are pursuing a joint venture or supply agreement across borders, you will need to choose which country’s laws will govern the contract. Perhaps most important, you need to decide on a forum where any potential disputes arising out of the agreement will be resolved. You can take a blended approach and have the laws of both states govern and allow for resolution in either state. Consider this carefully as you are in the beginning stages of negotiation and make sure the clause is clearly drafted.

Conflict of Law

Given that operations will be held in different states, conflict of law provisions should clarify which laws govern which operations. If for example, you are one of the seven licensed Canadian producers setting up shop in Colombia, you will want the greenhouse operations to be governed by Colombian law first and foremost and perhaps additionally you will require certain regulatory standards that comply with Canada’s laws as well.

Waiver of Sovereign Immunity

Sovereign immunity is a legal doctrine which varies between countries but which as a general principle states that nations are protected from lawsuits, unless they have waived their immunity. The difficulty here arises when you have a company that acts like a private one, but which when a lawsuit is presented after a breach of contract, claims to be a state actor that cannot be sued. This is a simple clause to include in your international agreements and can become especially important in cases of breach or insolvency.

When negotiating or drafting international agreements for cannabis corporations, as with any contract, you should ensure that the agreement is valid, enforceable, and clear. Ultimately the negotiation of many of these terms will come down to the bargaining power of the parties, but some of the international considerations should be given additional attention so that the contract does end up in fact being enforceable in a practicable way.

Lauren Estevez is a Los Angeles based attorney advising cannabis and CBD companies, investors, and brands.

Lauren Estevez, Esq.
Attorney & Founder

(c) 617-945-8032
4470 W. Sunset Blvd., Los Angeles, CA 90027

Sean HockingSean HockingJanuary 4, 2019
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5min00

While this is potentially good news for farmers and their bankers, questions remain for bankers about how they can effectively identify a legal hemp crop and distinguish it from an illegal marijuana crop. Although industrial hemp typically looks very different from marijuana grown for recreational consumption, both are derived from the same genetic species: cannabis sativa. Under the Act, the legal difference appears to be based on the THC levels in the processed (or “dry weight”) product.

The Act defines “hemp”  to mean: “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Act, §10113.

The revisions to the Federal Insurance Crop Act use that same definition and provide that “hemp” as so defined can be insured under the federal crop program. Act §§11101 and 11119.

Thus, the legality of marijuana under federal law will be determined by whether the THC it contains, by dry weight, is less than 0.3 percent. If the THC level is 0.3 percent or greater, the crop is still subject to the federal Controlled Substance Act as a Schedule 1 drug (similar to heroin).

As the Act goes into effect and federal regulators weigh in on it, banks will need to consider whether they are willing to lend against the legal crop as they would against any other agricultural product, and will also have to examine how they can ensure that the crop against which they are lending has a legally acceptable THC level.

We are starting to work with botanists and others to see how lenders can lend against hemp crops and audit the crop’s compliance with the Act. Certainly, the approach that will be taken by the Federal Crop Insurance Corporation and the Secretary of Agriculture concerning the Corporation’s providing of crop insurance for hemp will be critical for bankers wanting to enter the field.

 

Barry A. Abbott

Barry Abbott represents established corporations and startups in all aspects of their corporate, financial services, internet, payments and e-commerce businesses. He is nationally recognized for his work advising clients on developing ground-breaking consumer financial services products.

Barry Abbott is a pioneer in e-commerce lending matters. National and international financial institutions look to him for counsel on major transactions. He also advises startups (including crowdfunding, peer-to-peer and gaming companies) on corporate and regulatory matters. Notably, Barry was:

  • Involved in developing the legal documents for the first equity line product (for Crocker Bank in the late 1970s)
  • Principally responsible for developing all legal documents for the first major reverse mortgage program (for Transamerica HomeFirst in the late 1980s)
  • Original legal counsel responsible for organizing the National Council of Real Estate Investment Fiduciaries (NCREIF)
  • General Counsel to the REX Group, which developed the first true home owner-occupied option investment product and marketplace

StaffStaffDecember 10, 2018
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7min00

Recently lawmakers said that they have reached a tentative deal on a massive farm bill, breaking a months-long impasse over legislation that doles out more than $400 billion in federal funds for farm subsidies, food stamps, and conservation efforts. Senate Majority Leader Mitch McConnell (R-Ky.) confirmed hemp legalization would be included in the final version of the 2018 Farm Bill.

Legislators are hoping to strike a compromise on the 2018 Farm Bill before the end of 2018. The big issue holding everyone up is the issue of SNAP, which is commonly known as food stamps. The Republicans want to reduce these benefits and require a work component. The Democrats don’t want any changes. McConnell insists that the hemp language will remain in the final version.

“Hemp has played a foundational role in Kentucky’s agricultural heritage, and I believe that it can be an important part of our future,” Senator McConnell said. “I am grateful to join our Agriculture Commissioner Ryan Quarles in this effort. He and his predecessor, Jamie Comer, have been real champions for the research and development of industrial hemp in the Commonwealth. The work of Commissioner Quarles here in Kentucky has become a nationwide example for the right way to cultivate hemp. I am proud to stand here with him today because I believe that we are ready to take the next step and build upon the successes we’ve seen with Kentucky’s hemp pilot program.”

The original Farm Bill said that it was okay to grow cannabis plants that had little ability to get people high. The DEA (Drug Enforcement Administration) did not agree with this definition and has consistently pointed out that both plants come from the same genus and are therefore they are same plant and so subject to the Controlled Substances Act. A court case ruled against the DEA’s stance, but it continues to insist it is in the right.

Declining cigarette sales have caused tobacco crops to become less profitable as sales drop. Kentucky farmers had been searching for a replacement commodity and found it in hemp. In 2014, McConnell spearheaded a provision to legalize hemp pilot programs in the Farm Bill. The program has proved to be popular among farmers who have pressured McConnell to make it easier to farm hemp.

If the U.S. Department of Agriculture approves the plan, the Hemp Farming Act of 2018 will help Kentucky take the lead on hemp production by removing the current barriers to full-fledged farming. In addition to opening the fields for hemp, it will give researchers the chance to apply for federal grants from the Department of Agriculture.

“Here in Kentucky, we have built the best Industrial Hemp Research Pilot Program in the country and have established a model for how other states can do the same with buy-in from growers, processors, and law enforcement,” Commissioner Quarles said. “I want to thank Leader McConnell for introducing this legislation which allows us to harness the economic viability of this crop and presents the best opportunity to put hemp on a path to commercialization.”

The Hemp Market

The Hemp Industries Association (HIA) reported that in 2015, retail sales for hemp products reached $600 million, which is much lower than the $5.4 billion for marijuana sales in 2015 as reported by Arcview. HIA says that hemp sales on average grow by 15% each year and that most of that growth can be attributed to more people buying hemp-based body products and supplements.

Congress has blocked the DEA from interfering with state agencies and hemp growers with regards to hemp. The USDA has been blocked from prohibiting the transportation, sales or use of industrial hemp. Despite these measures, hemp was still subject to drug laws and hemp growers have to get permission from the DEA. In addition to that, harvesting and processing is labor intensive, which can drive up costs. Since the U.S. has been out of the hemp game for some time, harvesting innovations haven’t occurred.

A study by the University of Wisconsin-Madison concluded that hemp production “is not likely to generate sizeable profits” and also noted that international competition would affect the U.S. Most of the hemp for these sales was imported from China and Canada. Hemp imports for 2015 were nearly $78.2 million according to U.S. trade statistics.


Debra BorchardtDebra BorchardtNovember 2, 2017
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4min00

The Federal government says marijuana is illegal but is sanctioning cannabis advertising in an airport. Organa Brands, one of the largest privately owned cannabis companies launched the first ever in-airport public service announcement (PSA) about cannabis. SecurityPoint Media is the company behind the campaign and whose programs have been vetted by the Transportation Security Administration (TSA).

The campaign will debut in airports in Southern California with branded trays across all terminals at security checkpoints. The message will read, “Cannabis is legal, traveling with it is not. Leave it in California.” It is expected to be seen by 15 million people.

Organa Brands approached SecurityPoint Media with the idea and is paying for the PSA. The airport has the ultimate say over the campaign and its wording. “The TSA doesn’t get involved in ad copy,” said Joe Ambrefe, Chief Executive Officer of Security Point. “All the airport people approved of it,” he added. Ambrefe did concede that the TSA does have its eye on it and would step in if it was problematic. “It’s a positive message,” he said.

TSA officers do not search for marijuana, but if they observe it can refer the matter to a law enforcement officer. The TSA was established in 2001 following the September 11 attacks to detect terrorism and was moved to the Department of Homeland Security in 2003.

“When we first came up with the plan, we thought there was no chance that the airport or the TSA would ever approve us running a PSA in this space. We are still so amazed to see them in use at the airport,” said Brittany Hallett, Marketing Director at Organa Brands. Organa Brands believes this public service announcement will lead the movement for the next generation of cannabis advertising and legitimize their position as a cannabis powerhouse.

“This is a step in the right direction toward further acceptance of cannabis as a mainstream business,” says Jeremy von Heidl, Co-founder, and President of Organa Brands International. “We wanted to get out ahead of recreational legalization in California with a meaningful public service announcement. The security trays have been a great way to reach our consumers and the reaction has been overall very positive. I think it’s a huge sign of changing perceptions around cannabis that you can walk into an airport and see our brands and our messaging in security trays at the checkpoint.”

The 12-month campaign is seeking to educate cannabis consumers as California enters its first year of legalized adult use marijuana. In a statement, the company said, “By running a public service announcement in a major airport for the first year that California offers recreational marijuana, Organa Brands hopes to ensure the focus at the security checkpoint remains safety and security.”

Hallett said, “The message the trays carry is an important one. We’re very excited for the public to have better access to this information as we move into a new recreational market in California.”


Debra BorchardtDebra BorchardtOctober 25, 2017
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3min00

While some in the cannabis industry obsess over strains and the nuances of those flavors, the largest cannabis brand O.penVAPE has rolled out a new line of flavored vapes. The O.penVAPE ISH line was launched on Tuesday with three flavors: Bavarian Cream, Blue Raspberry, and Watermelon.

The company said that it was responding to a lot of customer feedback from people that wanted a flavored cartridge. “It appeals to a totally different market than say – the craft reserve. Plus, the addition of flavoring sets it apart in this category,” said Chris Driessen, President, Organa Brands U.S. “The customer is someone who is perhaps not a strain aficionado. It’s someone looking for rich flavor without a strong marijuana taste.”

The ISH in the new product name stands for indica, sativa, and hybrid. The indica dominant brand is Bavarian Creme flavoring, the sativa dominant is the Blue Raspberry flavoring and the hybrid dominant is the Watermelon flavoring.
O.penVAPE is known for its tight marketing and fresh packaging has refined the vape pen even more with this new product. It has a more sleek profile and now comes with a rechargeable unit instead of a throwaway battery. “The eco-friendly aspect stems from the rechargeable functionality of the pen. People love the disposable form-factor, but we hate the idea of all those batteries ending up in a landfill, so we added the ability to recharge,” said Driessen.
There certainly seems to be a customer desire for fruit flavored marijuana. High Times Magazine published a list of the top cannabis strains from the Cannabis Cup competitions a few months ago and the list contained names like Strawberry Banana, Orange Bangi, LSF Lemon Cookies, and Schlemons. Leafly’s staff picks included Tangie, which was described as a “citrus dream” and Strawberry Cough described as smelling “Like it grew wild in a strawberry patch.”

“We saw a need in the space for distillates with unique flavor profiles, and after months of perfecting the design and taste, we are thrilled with the end result,” said Driessen. “I didn’t know how much I would love these flavors until I tried them- but once I did, I was really impressed with the work of our R&D team. It’s not your typical cartridge and is definitely a refreshing take on flavored distillate.”


Debra BorchardtDebra BorchardtOctober 2, 2017
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6min00

How is it that a man who knew little about marijuana ended up being the CEO of one of the largest privately held cannabis companies in the country?

Ralph Morgan is the current Chief Executive Officer of O.penVAPE, which is the largest branch of Organa Brands. He started his career in healthcare, but as he was climbing the corporate ladder he felt he was moving further away from healthcare.

I started a dispensary in 2009 with my wife because I knew how to speak to people with ailments and basically that was it,” he said. “I had very little experience with cannabis.” His research into the product told him it was the perfect place for entrepreneurial opportunity. “It’s controversial, a little bit of David and Goliath, a little bit of right and wrong. Great opportunity on the upside for a social change.”

His experience as a dispensary owner, however, showed him that there was a gap in the market for products that were consistent, reliable and safe. This encouraged him and his wife to invest in a MIP or manufactured infused product facility and this was the birth of Organa Labs in 2010.

He invested in CO2 equipment. “It was avant-garde at the time,” said Morgan. Then e-cigarettes started taking off and he started playing around that concept. By 2012, Morgan and his partners had decided that vaporizers were the ideal way to consume cannabis. They felt it was going to be a disruptive technology for the cannabis market and they were right. O.penVAPE was born and the company has grown into a business that does over $100 million in sales each year.

The challenge the company faces now is scaling and growing. Morgan said that picking great partners comes from surviving bad partnerships. “At this size, the stakes are just that much higher. A new partnership means we have to get it right, if we get it wrong, can we recover?” he asked. “Each mistake gets more expensive. We made a lot early on, but the costs were low.”

Morgan’s time as CEO is about to shift. “I started as CEO of Organa Labs, but I don’t act in that capacity anymore and I’ll officially change that to President of Wellness and CBD products,” he said. The company is planning on expanding the leadership to people outside of the cannabis industry. Morgan said they are looking for folks that have the experience to grow a company that’s on track to be a billion company in a few short years. “I’ve never done that before,” he said. “Despite my tenacity, I’m not qualified. We need better help. We’ve got one chance to get this right.”

Now he is focusing on the medical vertical and wellness line as he gets back to his roots. “It’s something that is near and dear to my heart.” We should have a full launch by Christmas of this year. It will be called OBA, Organa Brands Alternatives.”

With Organa Brands, it will be healthier alternatives to conventional products. Instead of a 5-hour energy drink like a Red Bull, OBA will have an energy option with CBD in it. Some will have THC in them, but the products without THC will be sold everywhere.

The OBA will have several categories, but none including vapes since that’s already available. There will be pressed pills for energy, sleep, relax and rejuvenation. A gel cap product called “Daily Dose” with a small amount of THC or CBD. A point of purchase kiosk is designed to educate the customer. It has a simple decision tree to help drill down into the product. There will be hard copy, plus a tablet to give information.

Morgan said the culture of Organa is hiring someone with the right attitude, passion and moral compass. “We work way too hard for this to be just a job,” he pointed out. “If you’re just here to make a buck you’re in the wrong industry.” Some of Organa’s company perks include free rides on Uber, matching the 401k two to one and generous pay. Morgan said, “If you have the right attitude, there’s a seat on the bus for you.” He’ll be driving the bus.


StaffStaffAugust 30, 2017
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3min00

Most cannabis extractions take place in commercial labs with expensive equipment, but there are some appliances that consumer can use at home to create their own infusions. The LEVO is the latest home infusion product that retails for $199 and can infuse any oil or butter with any dry herb material and that includes cannabis.

The company is based in Boulder CO and was founded by Christina Bellman, the Chief Executive Officer of the firm. She has self-funded the development of the product since 2011, while she was working in finance in New York City. She moved the company to Colorado in 2015 and launched a pre-order campaign in late 2016 with the current version that comes in three colors. It is easily the nicest looking of any home infusion product on the market. Plus, a portion of the proceeds go to the Mile High Weimaraner Rescue.

Some of her ideas for cannabis include infusing coconut oil with cannabis to make a body product, using LEVO to make a cannabis and olive oil marinade or even infusing your own butter for home-made edibles. Her latest recipe is for a bath scrub using lavender and coconut oil, while also adding hemp seed oil. Bellman points out that hemp oil can be used to reduce inflammation of the skin.

The LEVO machine doesn’t aerate the oil and butter ingredients and increases the shelf life of the final product. The company also says that the cannabutter produced by LEVO is substantially less green and looks a lot like regular butter.

Its slick design means consumers can leave the product on the counter even if parents come to visit. The machine parts can be placed in a dishwasher for cleaning.

Other similar products on the market include the Magical Butter Machine, Might Fast Herbal Infuser and The Mota Pot. Magical Butter retails for $174 and isn’t nearly as attractive. The Mighty Fast Herbal Infuser costs $159 and works quickly. The Mota Pot looks like a coffee pot and is the cheapest at $55.


Melissa EbanksMelissa EbanksAugust 20, 2017
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3min00

Future Farm Technologies (FFRMF) announced that its team at the Huntington Park extraction facility had extracted its first CBD batch using organic grape alcohol that gave the result of a highly pure, potent and effective medicinal product.

“We believe this alcohol extraction technology is the best extraction equipment on the market today,” says William Gildea, CEO of Future Farm. “The ability to process large amounts of cannabis flower into highly purified concentrates from day one will immediately benefit California’s medical marijuana community.”

The company posted a video from its extraction facility and can be found here.

Future Farm said, “The extraction equipment is designed to be able to rapidly scale the manufacture of premium cannabis oil to supply the growing demand for cannabis concentrates in the state of California. The equipment utilizes a closed-loop system to produce high quality oil in a high throughput system with minimal maintenance and labor.”

The company had acquired 250 pounds of high quality trim from producers in northern California  of both THC and CBD strains. All the trim was tested to make sure it was free from pesticides and microbiological contamination. Future Farms said that the CBD product was suitable for patients that did not want any THC psychotropic effects. In a statement the company said it was “Working toward completing multiple purchase orders for its whole flower and extracted oil products that are expected to be completed in early September.”

Future Farms also gave an update on its Riverside County facility, which will be harvesting at the end of August. The company said it “Will be able to use this first harvest to execute a side-by-side comparison of its own LED grow lights versus the standard High Pressure Sodium (HPS) lights. The HPS lights are currently consuming 1000 watts per light whereas the Company’s LED Canada grow lights are utilizing 550 watts per light. The Company expects to use data from the harvest to better understand the savings potential per kilowatt-hour over the lifecycle of each plant.”

“We are eagerly anticipating the harvest data from the cultivation facility and expect to yield in excess of 1.5-lbs per light. In addition, the extraction operations are developing well and we expect to soon provide our investors with revenue production. We have been working closely with potential customers to understand their needs to ensure that we provide them with the high-quality product that they expect. We are adjusting operations real-time to ensure we can provide them with consistent supply for ongoing long-term contracts,” says Mr. John Sweeney, Future Farm’s COO.



About Us

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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