Being a former police officer, Lou Haslam knew his family’s story about breaking Australian law to get medicinal cannabis for his son was powerful. It helped lead to a change in the law but, as Gary Nunn reports from Sydney, the family remains unhappy with the result.
Working undercover for the police drugs squad, Mr Haslam, now 66, arrested „a tonnage” of people for cannabis-related crimes in New South Wales (NSW) between 1972 and 2006.
„We were mainly after growers and suppliers,” he says.
Little did he know he’d later possess cannabis himself – and even purchase a farm to grow it. He began supplying cannabis to his own son, Dan Haslam, after he was diagnosed with bowel cancer in 2010.
‚You’d do anything’
The day of his son’s cancer diagnosis, Mr Haslam remembers feeling confusion, anger, fear then grief: „I just thought, this is a 20-year-old kid. What the bloody hell’s happening?”
Remembering how chemotherapy killed his son’s appetite takes Mr Haslam back to a dark time. „He was as sick as a dog,” he says. „For seven days afterwards, he couldn’t eat. He’d vomit. Ulcers filled his mouth. He lost so much weight and had no energy. Just as he’d feel better, it was time for his next round.”
Things got so bad that Dan would get anticipatory nausea – he’d vomit at the thought of chemotherapy. „Something had to give,” Mr Haslam says. „As a parent, you’d do anything – and I mean anything – to stop your kid suffering.”
A family friend who’d had colon cancer offered Dan cannabis to manage his nausea, pain and poor appetite. Dan, a „fitness freak”, declined. He feared his dad’s disapproval.
But Mr Haslam’s reaction shocked everyone. „I said, Christ almighty – go for it. Get some smoko. Anything to help my son.”
With ongoing use of the drug, sourced from the black market, Mr Haslam says his son’s ulcers disappeared, his appetite returned and his nausea depleted. „He’d tried every bloody pharmaceutical drug. They did nothing. This was really working.”
Dan went on to have „the best two years of his life”. With renewed energy, he travelled the world and married his university sweetheart, Alyce.
‚Bloody tough’ decision
Seeing its impact, the Haslams started hearing how medicinal cannabis helped others with chronic diseases, epilepsy and HIV. They decided to go public with their story to shift Australian lawmakers to legalise it for medicinal use.
„Up till that point, we’d never used the word ‚terminal’ – Dan hated it,” Mr Haslam says. „If our story was going to do any good, Dan had to not only accept his terminal diagnosis, but say that word. And I had to tell the world my son was about to die. It was bloody tough.”
The Haslams persuaded then NSW Premier Mike Baird to launch Australia’s first medicinal cannabis trial for terminally ill patients. At the time, Mr Baird wrote a piece for Sydney’s Daily Telegraph, headlined: „How a young man changed my mind on cannabis.”
Mr Baird tells the BBC: „The moment I met Dan I was convinced medical cannabis could make a difference. I could hear it in Dan’s voice; I could see it in his eyes.”
The family set up an online petition which amassed 320,000 signatures. They used those supporters to successfully lobby politicians. A picture of Dan sick on chemotherapy was circulated around Australia.
But as the campaign energy built, Dan’s began to wane. He died in 2015, aged 25.
On 24 February 2016, coinciding with the one-year anniversary of his death, medicinal cannabis was legalised by the Australian parliament. Some MPs called it „Dan’s Law”.
His parents had campaigned tirelessly in their first year without their son.
In an Australian first, Lou and Lucy Haslam purchased a farm earmarked to grow medicinal cannabis, which was opened by then Deputy Prime Minister Barnaby Joyce in Tamworth – Dan’s home town. It was called DanEden.
A new battle
But now, the Haslams are campaigning again.
They argue the number of Australian patients accessing medicinal cannabis is too low, and that the law isn’t working. They’ve reopened their petition using the hashtag #FixDansLaw.
The family says medicinal cannabis remains in regulatory limbo due to excessive regulation and bureaucracy, meaning some patients wait up to 19 months for a script. As of April 2019, there have been 5,200 medicinal cannabis approvals.
It must be accessed through a special scheme which, critics say, makes it onerous for doctors to prescribe. Australia has only 57 authorised prescribers of medicinal cannabis, according to the Therapeutic Goods Association (TGA), the national regulator.
Mrs Haslam adds: „Once approved, many patients realise they can’t afford it.” She says she knows of parents still breaking the law to get medicinal cannabis on the black market.
A TGA spokesperson tells the BBC that there’s „significant need” for larger medicinal cannabis research studies.
The Australian Medical Association (AMA) acknowledges „the potential therapeutic uses” of cannabis. It says it supports the current regulator and the government’s desire to accelerate the process for patients to get the medication.
The Haslams fight on. Lou Haslam marvels at his wife Lucy, who founded a charity which campaigns for compassionate access to the medication.
„She works 14-hour days,” he says. „The death of a son changes you. She just won’t give up. Not now.”
While cannabis wasn’t really a hot topic in the Democratic presidential debate last week, it was trending in the news after Illinois Gov. J. B. Pritzker printed his autograph on the legalization bill, making the state the 11th to legalize adult-use marijuana. Commenting on the issue, Debra Borchart, CEO of Green Market Report, told Benzinga what she likes most about Illinois’ approach is “that the legislation will also expunge the records of over 700,000 residents convicted of marijuana-related offenses.
“The bill also includes a ‘social equity program,’ which makes it easier for those with marijuana convictions to get business licenses and the program also allocates $12 million for startup businesses related to cannabis,” she said.
On the federal level, Sen. Ron Wyden (D-OR) and Rep. Earl Blumenauer (D-OR) introduced a bill into Congress that would allow for inter-state cannabis commerce. Another bill that would provide protections to banks that service legal cannabis businesses was passed in the House and is now in Senators’ hands.
Kyle Jaeger, associate editor of Marijuana Moment, is one of the people with their ears closer to the Hill’s beat when it comes to cannabis-related topics. When asked for commentary on these developments, he mentioned that, after years of inaction and stalling, Congress finally seems positioned to “take the incremental steps needed to legitimize and normalize this expanding industry.
“Freeing up banks to service cannabis businesses is considered one of the most commonsense legislative changes lawmakers can enact while advocates rally support for broader reform, and the bipartisan nature of the legislation bodes well for its passage in the Senate,” said Jaeger. The Senate’s appetite for inter-state cannabis commerce is yet to be seen, but recent legislative developments suggest a friendlier approach toward marijuana intiatives in general.
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XON) to advance commercial scale fermentation-based cannabinoid production, and the continuation of global brand building and innovation through R&D, science and technology.
Surterra CEO William “Beau” Wrigley, Jr. told Benzinga, “The results of our Series D funding round illustrate how much trust sophisticated, curated investors have in our vision, business model, and financial track record.”
KERN), parent company to seed-to-sale tracking company MJFreeway, shared some predictions on cannabis consumption trends. The company anticipates Americans will spend more on cannabis this Fourth of July than chicken for their BBQs. Actually, cannabis sales are expected to increase by 80% compared with an average week, ringing in approximately $450 million in total sales nationally. At the current growth rate, Americans are poised to spend more money on cannabis than wine on the Fourth of July by 2020.
Over the last five trading days:
HMLSF) (TSE:HMMJ) lost 1.%.
MJ) tumbled almost 1%.
YOLO) rose 0.4%.
SPY) closed the period down 0.34%.
Here are some of the top marijuana stocks (market cap above $500 million) in U.S. exchanges and how the performed over the last five trading days:
ACRZF): down 14%
APHA): up 4.2%
ACB): up 7.1%
CTST): down 1.4%
CGC): up 0.4%
CRON): up 0.25%
CURLF): down 4.65%
GGBXF): down 3.4%
TGODF): down 0.4%
GTBIF): up 3.3%
GWPH): down 0.7%
HEXO): down 4.8%
HRVSF): down 2.3%
ITHUF): up 7.9%
MRMD): down 8.6%
MMNFF): up 11.15%
OGI): up 1.3%
SMG): up 0.8%
TLRY): down 7.7%
Surterra Wellness also acquired Boston-based Molecular Infusions (Mi). This marked the company’s third acquisition in six months. “Through Mi’s advanced R&D platforms, we will reimagine product formulations and delivery strategies, allowing patients and consumers to benefit from cannabinoids in more effective and predictable ways – both today and in the future,” said Wrigley, Jr.
See more detailas here.” data-reactid=”60″>After much legislative back and forth, Maine finally set up its legal framework for the sale of adult use cannabis, more than two years after citizens voted for legalized sales. Gov. Janet Mills signed the bill into law Thursday. The governor’s office said it will accept business license applications by the end of 2019. See more detailas here.
See more details.” data-reactid=”61″>ONE Cannabis announced the expansion of its leadership team with the additions of Frank Knuettel as Chief Financial Officer, Kacy Sindel as Director of Operations, Cultivation and Jayne Levy as Director of Communications. See more details.
Vice Ventures launched a $25 million fund focused “non-traditional” investment verticals like cannabis, alcohol, CBD, e-sports, addiction recovery, sextech, and others. Among investors are World Wide Web Hall of Famer Marc Andreessen and Bradley Tusk, investor, philanthropist, and former Deputy Governor of Illinois.” data-reactid=”62″>Venture capital firm Vice Ventures launched a $25 million fund focused “non-traditional” investment verticals like cannabis, alcohol, CBD, e-sports, addiction recovery, sextech, and others. Among investors are World Wide Web Hall of Famer Marc Andreessen and Bradley Tusk, investor, philanthropist, and former Deputy Governor of Illinois.
Founding Partner Catharine Dockery told Benzinga, “I’ve found that Vice Ventures is often a very divisive topic – some people think of us as drug runners or arms dealers, and others see us as social arbitrageurs. I tend to see us as much more of the latter. We have a catchy name and concept, to be sure, but we care deeply about working with founders who create products for consenting and informed adults. Binary approaches towards vices, from the prohibition of alcohol to the inclusion of cannabis as a schedule 1 drug, have had little success and have caused real social harm in the United States. The social winds of change are blowing, and if we execute on our thesis I’m confident we can deliver exceptional returns to our investors.”
“Pride Passion is such a special flavor and collaboration for Fruit Slabs. Being able to work closely with La Ganja Estranja and have a true ambassador bring our product to the LGTBQ community makes a huge impact,” said Roxanne Dennant, Fruit Slabs CEO. „This product is for everyone, but it is a uniquely honoring our LGBTQ friends.”
See more details.” data-reactid=”66″>Cannabis company CB2 Insights Inc (OTC: CBIIF) acquired New Jersey Alternative Medicine, one of the state’s largest medical cannabis evaluation and education clinic groups. NJAM, which operates six clinics in the state and serves over 15,000 patients, will transfer all patient care to CB2 Insights under a performance-based agreement. CB2 Insights will operate in New Jersey under its subsidiary Canna Care Docs, the largest multistate medical cannabis clinic operator in the U.S. See more details.
See more details.” data-reactid=”67″>Cannabics Pharmaceuticals Inc (OTC: CNBX), a company focused on personalizing cannabinoid medicine, especially in relation to cancer and its side effects, this week announced the appointment of two new members of their board of directors: Dr. Estery Giloz-Ran and Eran Ballan. See more details.
WGBH News in Boston, KPBS in San Diego, Arizona PBS, NJTV News and WTTW in Chicago recently collaborated to produce “Cannabis Country,” a half-hour news special covering the state of marijuana across the country.
WGBH News takes a look at the new Massachusetts recreational marijuana industry and also grapples with the lack of research on medical marijuana. KPBS takes a look at San Diego cannabis cultivators attempting to meet the demands of a burgeoning legal market. Arizona’s AZPBS takes a look at the business of medical marijuana through the lens of the banking industry, a tricky venture given the drug’s illegal federal status. New Jersey’s NJTV takes a criminal justice angle, digging into how possible legalization in the state would affect those in the criminal justice system with marijuana charges and how law enforcement would need to adapt to a change in legal status. Chicago’s WTTW speaks with both Illinois doctors and patients to learn more about the plant’s medicinal properties.
Kate Zachry, news director at WGBH News said, “With ‘Cannabis Country’ we created a nationally relevant program by pooling the resources of local public media newsrooms across America. The program demonstrates the power of public media to uncover the stories most important to our communities and the flexibility of the system to deliver these stories to new audiences.”
The first cannabis cuttings were planted at the 160-acre field in the province hours after the license came through, Canopy said. See more details. The company also completed a transaction to acquire Canada-based KeyLeaf Life Sciences, a bio-product extractor company.
COLXF) will add to its global footprint in the medical cannabis space with the opening of its San Diego, California flagship dispensary on July 3. The launch also marks the first time Columbia Care’s provider-based dispensary process will be implemented in the state. See more details.
KSHB) said it will develop a new distribution facility in Taylor, Michigan in order to support its operations in the Midwest. See more details.
“Cannabis cultivators know how time consuming the monitoring and reporting of everything that comes with compliance can be. From tracking weights and inventory to ensuring plants of a certain growth stage are in the right place and information is accurately reported, the GeoShepard application empowers growers and garden employees to streamline the cumbersome process — easier, faster, more accurate – right from their smartphone,” said CEO Michael Lands.
SPRWF) launched a premium cannabis oil in partnership with Khalifa Kush Enterprises Canada. The companies first partnered up in December of last year. See more details.
“Since the end of CA’s Cannabis prohibition, I have followed the cannabis industry closely and saw its potential. Given my experiences in the wine and spirits space, I see the parallels between the two industries. I feel I can be a tremendous asset in broadening distribution of Vertical’s vast Cannabis/CBD brand portfolios, and in the designing of sales structures in the legal markets,” he told Benzinga.
The funds will be fundamental for the company co-founded by Kate Miller and Anna Duckworth, as it prepares to launch its owned product, expand its team, and scale its marketing and partnerships efforts.
„We’re building Miss Grass as a brand that represents how cannabis actually fits into our lives,” asaid Kate Miller, co-founder and CEO of Miss Grass. „When I worked in a medical dispensary in 2008, there weren’t any brands that did that, that authentically spoke to the modern consumer. In this evolving industry, creating a strong brand with a loyal community is the recipe for an enduring business. And with our direct relationship to our consumer we see there’s a huge appetite for our educational content, product curation, and real experiences. We’re excited to launch product based on what we know our community wants.”
LFCOF) has created a meeting place for all consumers, entrepreneurs and investors. The technology helps cannabis consumers explore and understand the legal cannabis market, while offering extensive research and development around products, reviews, events and data. See more details.
MRMD) announced the appointment of Mr. David Allen to its Board of Directors. As a Director, he will serve as Chair of MariMed’s Audit Committee.
Allen told Benzinga, „I’m looking forward to bringing my experience in managing the business and finances of numerous companies in order to help MariMed capitalize on its innovative product and business strategies during this exciting period of growth in the cannabis and hemp industries. As an easing in the banking restrictions is being considered, we are closely analyzing every aspect to ready MariMed for the transition, as this normalization of the business cycle will likely enable even more investment and growth.”
GEATF) announced that its 51%-owned subsidiary La Vida Verde, entered into an agreement with Bettie Janes, LLC to further expand sales efforts throughout Northern California.
YCBD), a consumer cannabidiol) brand. As part of the agreement, mixed martial arts organization Bellator MMA will give cbdMD exclusive branding rights inside the Bellator cage. See more details.
GRWG), a specialty retail hydroponic and organic gardening stores, completed a private placement totaling $12.8 million. See more details.
ANF) will begin selling CBD products at more than 160 stores. See more details.
FLWPF) made three significant announcements. It announced the acquisition of the remaining 80.2% of Holigen, a company with cultivation and GMP manufacturing and processing assets in Portugal and Australia. With over 500,000kg of annual capacity, Holigen’s assets include one of the largest cultivation facilities in the developed world (Portugal), which has been designated a project of national interest by the government. The company also announced an equity offering of C$125 million and last week they gave word of non-dilutive capital via a C$50 million senior secured credit facility.
Vinay Tolia, Flowr’s CEO told Benzinga, “We had been looking for a global partner for some time and when we met the Holigen team we were extremely excited about their GMP, regulatory and pharma expertise plus the sheer scale of their assets. The combination of Flowr’s cultivation expertise and the mix of Hoiligen’s team and assets makes this a highly complementary acquisition to service the European and Australasia markets.”
The UK’s Centre for Medicinal Cannabis released its latest report. Titled “CBD in the UK: Towards a responsible innovative, and high-quality cannabidiol industry,” the report provides wide-ranging recommendations including amending existing out-of-date legislation; clarity relating to current policy; investment in medical research; and self-regulation among existing business owners. See more details.
TRLFF) announced a supply and purchase agreement with leading online cannabis marketplace Namaste Technologies (OTC: NXTTF).
True Leaf’s hemp-based supplements will be the first products for pets sold by a Namaste e-commerce platform when the line launches on Namaste’s CannMart.com.
“We’re excited to expand our online direct-to-consumer strategy with Namaste,” said Darcy Bomford, Founder and CEO of True Leaf. “In addition to being in more than 3,500 stores worldwide, we’re seeing tremendous growth online with direct-to-consumer sales. We also look forward to working with Namaste as a key distribution partner when we launch our line of legally-compliant CBD products for pets.”
HLIX) announced its subsidiary, BioTrackTHC, was awarded a government cannabis technology contract with the state of New Hampshire, the company’s second government contract in 2019. Earlier in the year, BioTrackTHC’s industry-leading cannabis seed to sale technology was selected by the state of Maine for a government traceability contract, and extended existing traceability contracts with Hawaii, Illinois, and Delaware bringing its total to 10 government contracts.
“We are pleased with the continued confidence in our cannabis tracking technology and look forward to further expanding our market presence as the industry grows,” said Zachary L. Venegas, Executive Chairman and CEO of Helix TCS, Inc.
Cannabis beverage company K-Zen Beverages announced the launch of its first brand, S-Shots, a line of cannabis-infused wellness shots developed with natural ingredients.
“With S-Shots, we wanted to create a brand of great tasting, convenient cannabis wellness shots that appeal to all cannabis users, from the experienced to the curious,” said K-Zen Beverages co-founder and co-CEO Judy Yee. „We’re on a mission to share the benefits of cannabis beverages, and with these four initial S-Shot SKUs, we’re excited to help consumers find the sensations they seek through consistent formulas, delicious flavors and rapid, predictable results.”
Ori Bytton, CEO of Natura Life + Science, said, „We believe Cannibble’s recipes and products solve an important problem in the edibles category, and we thrilled to be working with them to bring their products from Israel into the US market for the first time. This type of partnership is what Natura is all about given our commitment to help cannabis brands launch, scale, and ultimately thrive in the budding cannabis market. It’s a win for both of us – Cannibble will grow, and we will be able to offer our manufacturing partners and US consumers cannabis food products that they haven’t had access to before.”
CannAmerica Brands signed a non-binding letter of intent with Canna Provision for an exclusive license to manufacture and distribute CannAmerica branded cannabis infused gummy products and disposable vape pens, and Live Labs branded cannabis concentrate products, including droppers, shatter and wax concentrate products, and gelatin based capsules in Massachusetts.
“Expanding into the New England region has been a fundamental goal for CannAmerica, we’re looking forward to the prospects of our agreement with Canna Provisions and introducing our products to a thriving, new market,” said Dan Anglin, CEO and Co-Founder of CannAmerica.
“Daytrip is on a mission to set the gold standard for cannabis consumables. We plan to completely redefine expectations for CBD and THC infused products, and we’re thrilled with the initial reaction to our sparkling water line,” said Shawn Biega, CEO Daytrip.
Learn more about these and other news with out friends at Marijuana Money.
Here are some of the most interesting cannabis-related stories from this week.
• Cannabis Advocate Jonathan Hay Drops New Jazz Album, Looking To Repeat Recent Billboard Success
• Scoop: ParcelPal Inks Deal With Ontario Craft Brewery Cowbell
• Study: Association Between Medical Marijuana, Opioid Deaths Could Be ‚Spurious’
• Medicine Man’s Andy Williams On M&A, Colombia: ‚We Can Become A Dominant Supplier Of Cannabis To The World’
• How Brands Can Benefit From Pride Month When Making A Genuine Effort
• Video: Five Minutes With Dr. Dina, Hollywood’s Medical Marijuana Maven
• But, Which Spectrum? What You Need To Know About Hemp And Its Chemical Compounds
• Cannabis Sits At The Epicenter Of The Plant-Based Medicine Movement
• A European Landscape: The 21st Century’s Women In Cannabis – And An Event For Us
• Cannabis May Treat Fibromyalgia Pain, According To New Study
• Why Marijuana Companies Are Rebranding Themselves As Health Care Companies
• Here’s What CBD Can’t Do For You
• The Secret Sauce Behind The Best Performing Cannabis ETF In Canada
• Discussing MPX International’s South Africa Joint Venture With CEO Scott Boyes
• From Tea To THC: The Heady Rise Of Growpacker’s Stephen Boyd
• Cowen: Aurora Is ‚Top Pick In Cannabis’
• How Are New Innovations Driving The Cannabis Market Growth?
• Meet The 3 Biggest Industries Investing In Cannabis
August 17-18: The 9th CannaGrow Expo will take place in Palm Springs, California, featuring more than 35 cultivation-focused educational sessions and an expo hall filled with cannabis-related technologies. “One thing that differentiates CannaGrow Expo from other cannabis events is the exciting educational content focused on the foundations of the cannabis industry,” says Jessi Rae, COO of CannaConnections, producers of CannaGrow, DispensaryNext and Science of Cannabis Summit. CannaGrow Expo will feature a special Extraction Summit and the popular Grower Networking Roundtables. Pass prices range from $69 – $399. For more information and to purchase passes, please visit https://cannagrowexpo.com.
how big the global cannabis market will get, but one thing is certain: It’s growing fast, and an ecosystem of businesses that serve it is forming before our eyes. Most companies in the space are foregoing profit to grab market share, build brands, make alliances, and carve out sustainable niches. The result is a bewildering number of companies with rapidly expanding businesses but uncertain futures.” data-reactid=”11″>No one knows for sure how big the global cannabis market will get, but one thing is certain: It’s growing fast, and an ecosystem of businesses that serve it is forming before our eyes. Most companies in the space are foregoing profit to grab market share, build brands, make alliances, and carve out sustainable niches. The result is a bewildering number of companies with rapidly expanding businesses but uncertain futures.
wholesale supplier to companies serving the marijuana industry, primarily in the U.S. The company doesn’t deal in marijuana or cannabis derivatives itself, but sells supplies such as vaporizer parts, solvents, pre-roll papers, packages, and labels to customers throughout the cannabis value chain. It’s a small company based in California, but it has put up breathtaking sales growth numbers for three years. Can its stock make you rich?” data-reactid=”12″>KushCo Holdings(NASDAQOTH: KSHB) is a wholesale supplier to companies serving the marijuana industry, primarily in the U.S. The company doesn’t deal in marijuana or cannabis derivatives itself, but sells supplies such as vaporizer parts, solvents, pre-roll papers, packages, and labels to customers throughout the cannabis value chain. It’s a small company based in California, but it has put up breathtaking sales growth numbers for three years. Can its stock make you rich?
Marijuana leaves, money, and upward graph.
Image source: Getty Images.
latest quarter, and its sales actually declined from the previous quarter. KushCo’s growth is now coming from its largest segment, vaporizer parts, which supply 69% of revenue, and from energy and natural products, which supplies extraction businesses with solvents and oil bases and contributed 11% of revenue last quarter.” data-reactid=”25″>Although the company started out selling packaging solutions, that segment has diminished in importance — it comprised only 14% of revenue in the latest quarter, and its sales actually declined from the previous quarter. KushCo’s growth is now coming from its largest segment, vaporizer parts, which supply 69% of revenue, and from energy and natural products, which supplies extraction businesses with solvents and oil bases and contributed 11% of revenue last quarter.
Torrid top line growth
KushCo’s pivot to vaporizers and solvents for producing extracts is paying off brilliantly, as the U.S. market for concentrates is growing much faster than the market for marijuana flowers. While growth has gone negative in the company’s original two categories, the two segments supporting the concentrate market are on fire. In the most recent quarter, vape grew 383% year-over-year and 58% sequentially. The company’s energy and natural products category essentially didn’t exist a year ago, and had sales growth of 69% over the previous quarter.
Bar chart of revenue by category, illustrating dominance of vaporizer category.
Chart by author. Data source: KushCo Holdings.
Put that all together and the company produced second-quarter revenue growth of 240% year-over-year, and 39% quarter-over-quarter, for a total of $35.2 million. KushCo raised its revenue guidance for the full year by $30 million, a whopping 26% at the midpoint. It’s like another quarter of sales appeared out of nowhere.
This kind of head-over-heels top-line growth is nothing new for KushCo, having more than doubled sales in both 2017 and 2018. Clearly the company is serving its customers well and adding new ones every quarter. But there’s no real playbook for that kind of growth, especially for a business that outsources its production overseas, and losses have mounted as the company has had problems with execution. As CEO Nick Kovacevich admitted last year, the young company didn’t have the proper processes and systems in place to support its growth. As a result, KushCo has had massive challenges in managing its supply chain.
A supply chain nightmare in 3 acts
KushCo’s problems with managing growth started showing up late last year. The company uses contract manufacturers in China, and ordinarily ships goods by surface to keep costs low. With transit times from China to the West Coast of about five weeks and supplier lead times on top of that, KushCo needs to be very good at forecasting demand well in advance of orders. Unfortunately, the marijuana industry is experiencing chaotic growth, and KushCo has a complicated offering, with its biggest customers ordering 70 different SKUs (stock keeping units) on average. Forecasting all those orders accurately and filling them in a timely way is a herculean effort.
KushCo had to take some extraordinary measures to serve customers well. For products that were in short supply, the company resorted to costly air freight to eliminate the transit time across the ocean. In fiscal Q1, the three months ended November 30, the company spent $1.25 million on air freight, almost 5% of revenue. KushCo also ran up additional costs by shipping directly to customers on the East Coast from California rather than stocking inventory in its Massachusetts distribution center, and by taking some extra measures to address quality control issues. Altogether, KushCo’s gross margin plummeted from 24% in fiscal 2018 to 13% in the first half of 2019.
The high cost of meeting high demand
Getting back to historical margins while maintaining high product availability meant that KushCo needed to bring on new factories in China and make huge investments in inventory to stock its distribution centers with enough supply to get ahead of demand. Also, in order to move SKUs from air shipment back to surface freight, the five-week pipeline of parts in transit had to be refilled.
The cost of doing this showed up in the latest quarter, which ended February 28. Inventory doubled from the quarter before to $36 million, and the company reported negative operating cash flow of $34.8 million. With only $13.5 million in cash at the beginning of the quarter, KushCo had to use external means to fund working capital, raising $34 million through an equity offering that diluted existing shareholders. In the current quarter, the company raised an additional $21.3 million in debt through the placement of a senior note.
Going forward, KushCo says that maintaining supply chain lead times of two to three months coupled with its crazy growth rate will force it to spend more money than it is taking in for the foreseeable future. It plans to prioritize funding its ballooning need for working capital through debt, but the banking environment around cannabis makes that a challenge. Further dilutive equity financing is a virtual certainty.
How trade wars hit KushCo
As if it didn’t have enough problems managing exploding expenses, the company has been hit with a new supply chain cost: tariffs. KushCo’s air freight bill came down significantly in Q2, but it paid even more in tariffs in the quarter: $1.4 million from the second round of tariffs on Chinese goods, which went into effect on January 1.
KushCo is looking at passing on some of the cost of tariffs to its customers through a tariff supplement fee it implemented this quarter. But the current quarter will have three full months of tariffs on ever-increasing purchases to support sales and inventory growth. And if President Trump makes good on his threat to raise China tariffs from 10% to 25%, the company will have even tougher demands on its cash.
Profits? Not this year
KushCo reported a quarterly profit as recently as Q1 of fiscal 2018, but with its current problems it’s nowhere close to that now. Net loss in the second quarter was $8.9 million, or $0.10 per share, but that includes a paper gain of $5.6 million on the fair value of contingent consideration. Excluding that, but also subtracting out those air freight, product quality, and tariff costs — which definitely won’t be one-time events — the company still lost $7.1 million, compared with a loss of $7.6 million in the period a year ago.
restate its results of the last two years because of an accounting error, but that’s merely a distraction. The real issue for investors is the fact that the company’s current business doesn’t come close to generating enough cash to fund its growth.” data-reactid=”58″>KushCo will need to restate its results of the last two years because of an accounting error, but that’s merely a distraction. The real issue for investors is the fact that the company’s current business doesn’t come close to generating enough cash to fund its growth.
STATES Act passes, the company should be able to finance further growth with debt rather than another run to the equity market.” data-reactid=”59″>Kovacevich is optimistic that the company will grow out of its problems. KushCo is optimizing its warehouses with a new management system, discontinuing free shipping to its customers, and solving quality problems, and will be enjoying some cost benefits from its increased scale. He believes the company could achieve 30% gross margin and be profitable in fiscal 2020. And if the STATES Act passes, the company should be able to finance further growth with debt rather than another run to the equity market.
2 important reasons to be wary of the stock
Illinois that have recently relaxed marijuana laws are a tailwind, and sales into the company’s biggest market, California, nearly tripled from a year earlier.” data-reactid=”61″>KushCo is obviously doing a lot of things right to be able to grow its business at the breakneck speed of its first few years in business. The company has 10 customers that have generated over $1 million in sales, whereas in fiscal 2018 there were only four and in 2017 there were none. Vaporizer sales are expected to become legal in Canada later this year, which could be a big boost to sales. States such as Michigan and Illinois that have recently relaxed marijuana laws are a tailwind, and sales into the company’s biggest market, California, nearly tripled from a year earlier.
But along with that growth comes the biggest reason to be wary of KushCo stock: a rapacious need for cash that isn’t going to get better any time soon. KushCo has 40% more shares outstanding now than it did a year ago, which is a big reason why the stock price hasn’t gone anywhere in that time. It’s the nature of KushCo’s business that will continue to drive its need for working capital. The company is a middleman for a large variety of inexpensive products for an industry in a state of relative chaos. That means large and growing inventory needs in an environment where long term debt is difficult to obtain, and that, in turn, means further dilution of shareholders.
pursuing vaporizer development, and market disruption is a strong possibility.” data-reactid=”63″>The other risk for KushCo’s shareholders is its dependence on the vape category. While it’s a hot area of growth right now, it’s also vulnerable to competition, and the company needs more diversification. KushCo doesn’t own the proprietary rights to the vaporizer products it sells, but is one of four licensed distributors of CCELL technology, owned by Chinese company Shenzhen SMOORE Technology Limited. KushCo is attempting to build a moat by being a „one stop shop” for the customers it serves, but other well-funded players are also pursuing vaporizer development, and market disruption is a strong possibility.
Most investors should wait and see
On the surface, KushCo Holdings, with a market capitalization under $400 million, looks like a small company with fantastic growth that’s just waiting to be discovered. In reality, the company faces tough challenges managing that growth in a chaotic environment. The company has done a fantastic job of serving its customers and navigating uncharted waters so far, but shareholders haven’t profited.
KushCo may emerge from its present challenges as a profitable company in 2020, as it expects. Adventurous investors may want to make a bet on the market rewarding that. But they should keep a sharp eye on the cash flow statement rather than on the income statement. And most investors should avoid KushCo entirely until it can demonstrate that its business is sustainable.
Jim Crumly has no position in any of the stocks mentioned. The Motley Fool recommends KushCo Holdings. The Motley Fool has a disclosure policy.” data-reactid=”72″>Jim Crumly has no position in any of the stocks mentioned. The Motley Fool recommends KushCo Holdings. The Motley Fool has a disclosure policy.
Ever since Cannabidiol (CBD) was made legal in the U.K. in 2016, CBD startups have been springing up everywhere. One of the latest is fourfivecbd, created by two rugby players and aimed at athletes and health conscious people.
Founded in January 2018 by England rugby player George Kruis and former Wales international Dom Day, fourfivecbd launched its first range of products this year, including a zero THC (tetrahydrocannabinol) product.
The CBD industry is a booming industry, with recent reports forecasting a 700% increase in market growth to $2.1 billion by 2020. In the U.K. the market for CBD is generating around £50 million ($63 million) annually.
But what made two successful professional rugby players – Kruis will play for England at the World Cup in Japan in September this year – decide to go into business together?
“We saw an opportunity and wanted to create a product that people can trust; for athletes, by athletes,” says Kruis. “Also, because professional sport is a short career, like many other athletes we are starting to plan for life off the field.”
The idea for their business first emerged during changing room chatter when a number of players were talking about the health benefits of CBD. The pair, who had suffered their share of injuries on the pitch, had been interested in finding out about more natural alternative therapies. Having done some research into CBD they decided to try it for themselves.
“Between us we have 20 years’ experience in professional sport and have been under the surgeon’s knife 12 times,” says Day. “After taking CBD as part of our recovery from different setbacks, we saw a dramatic improvement in a number of symptoms.”
Their positive personal experience highlighted the opportunity to create a product for athletes and people who lead active healthy lifestyles that they could trust.
Clearly there was a demand from fellow professional athletes, coaches and nutritionists who have seen the benefits of taking CBD, but many had concerns about the provenance of products currently available on the market.
The company supplies a full spectrum (including traces of THC), largely for non-drug tested, active people, and broad spectrum (zero THC), mainly for our drug tested athletes or people who are subjected to drugs testing in their workplace.
“As athletes, we both have regular random drug tests,” says Day. „To ensure that we and our fellow athletes can continue to enjoy the benefits offered by CBD we needed to create the safest product possible to provide peace of mind when taking it.”
fourfivecbd is currently the only batch tested zero THC CBD product that is also tested for the cross contamination of banned substances. This was achieved through the US gold standard testing group, BSCG. Its CBD oils are made without the use of pesticides and herbicides, 100% natural and vegan and vegetarian friendly,and its hemp is sourced from across Europe.
One of the challenges they faced in starting their business was getting a bank and a solid payment system in place, because of the way that some banks still view hemp-based products. Acquiring the skills they needed to make key business decisions was also a completely new experience for them.
“We enlisted the help of some good mentors, including Peter Harvey, who was previously from Barclays, while our rugby club Saracens and the Rugby Players Association have also been very helpful,” says Kruis.
The other big challenge of course has been juggling their time between playing and being entrepreneurs.
“Running a business is actually a way for us to have something else to focus on besides rugby,” says Day. “Most people do sport to relax when they are not working; for us it’s the other way round. When we aren’t around we have an excellent team in place that we empower to make things happen.”
So far the two founders have self-funded the business and are very close to securing a first round of investment that will help drive sales of their zero THC range and purchase stock for a move into the wholesale market.
“Our main target market is the active and wellness markets, which our product lines reflect,” says Kruis. “We are also looking to expand overseas with selected European countries being our initial targets.”
Sales are growing rapidly and fourfivecbd is on course to reach a £1 million turnover by the end of this year. Their current focus is on a major push into wholesale and expanding their product line over the next 12 months or so.
Day says: “While our main focus is very much on CBD, we are planning to broaden out and focus more generally on the sports and active lifestyle market. However our long-term goal is to establish fourfivecbd as the brand that athletes and active people can trust when it comes to using CBD.”
Interest in cannabidiol (CBD) is exploding. Now that major retailers are carrying CBD products, plus an enormous selection online, curiosity is only going up. But along with the enthusiasm, we also need healthy skepticism and caution. CBD research is still in the early stages, and marketing is predictably outpacing facts. Concerns about safety, among others, are getting lost in the hype.
Apart from a short list of possible side-effects, bigger concerns revolve around how CBD interacts with other drugs. Here’s a brief breakdown of possible risks if you’re thinking of trying it out.
What CBD and grapefruit have in common
You’re probably familiar with “grapefruit warnings” that appear on a variety of medications, or maybe your doctor or pharmacist has told you to avoid grapefruit or grapefruit juice when taking a particular med.
The reason for the warning is that grapefruit contains compounds called furanocoumarins that bind with and effectively neutralize enzymes in the gut (specifically CYP450 enzymes), which help break down and eliminate drugs. When these enzymes can’t do their job, too much of the drug enters the liver and flows unprocessed into the bloodstream. That elevates risk of having dangerously high levels of the drug in your system.
CBD is similar to grapefruit in that it also binds with those enzymes, but research suggests that it’s possibly even more potent because it binds in multiple parts of the gut and liver (grapefruit seems to mainly affect enzymes within the small intestine). In particular, research has found that CBD is a „potent inhibitor” of two enzymes (CYP3A4 and CYP2D6) that affect many common drugs, including antihistamines, benzodiazepines, and statins.
What’s the risk?
The enzymes that both grapefruit and CBD bind with are thought to break down a significant percentage of prescription medications, so the potential for problems could be high.
A low dose of a med could become a high dose if it’s not properly broken down and eliminated. A high dose of a med could become a dangerously high dose, or even an overdose. Drugs with a narrow “therapeutic window” (they must stay within a certain blood-concentration range) are especially susceptible.
One of the big problems with CBD at the moment is we don’t really know yet which drugs are affected the most, and it’s difficult to identify exact levels of risk because the research has a lot of catching up to do after decades of science-blocking illegality. But since the compound appears to exert a similar effect as grapefruit, caution is needed.
What’s the best path forward?
At a minimum, the evidence at this point suggests that grapefruit warnings on medications carrying them should also apply to CBD. And it’s important to check with your doctor before taking CBD, especially if you’re taking other medications.
The market for CBD products is predicted to pass $22 billion over the next four years, and that’s coming with the expected hurricane of fact-obscuring hype. With so much fanfare, it’s easy to ignore the fact that CBD is a potent compound that’s far from exhaustively understood. Research is uncovering upsides of taking it for a variety of conditions, and we’ll likely see more to come, but it’s also on us to recognize that this is an unfolding story and move forward with caution.
The United States’ cannabidiol (CBD) market may soon see a boon in oral care products, premium brands may seek patents with no certainties they will be enforced. + Ways to survive the dentist.
Cannabis and oral care are a complementary combination making more and more sense to researchers and scientists. | CBD drops, CBD Capsules, CBD oils can all be used for oral care.
Oral diseases are the most common non communicable diseases across the globe according to the World Health Organization, which also estimates severe periodontal disease to be the 11th most common disease worldwide. And severe tooth loss and edentulism (tooth loss) is one of the leading ten causes of Years Lived with Disability (YLD) in some high-income countries.
At the same time, cannabidiol has taken the United States’ health, beauty, and wellness products industry by storm. In a survey of 2,000 U.S. consumers, 1,500 reported using a CBD product within the last three months.
With CBD’s well-cited effects treating inflammation and fighting bacteria, it makes sense that oral health and CBD should grow closer and closer together in the form of consumer products.
After all, at-home recipes for CBD mouthwash, CBD charcoal oil, and other oral health solutions already dwell in Google databases, signaling an undeniable demand for CBD oral health products. Or at least a really determined curiosity. `
A few cannabis, biotech, and pharmaceutical companies have been developing and testing cannabis-derived oral care solutions from the beginning, aiming to get them on the shelves of drug stores and health food stores as quickly as possible.
Cannabinoid research and product development company, AXIM® Biotechnologies, Inc. (OTC: AXIM), has a history of developing cannabis-derived oral health products through extensive research. The company recently partnered with Impression Healthcare to supply its CBD toothpaste and mouthwash for a clinical periodontitis treatment trial.
They’re looking to test the effectiveness of CBD in treating periodontitis, with trials to be performed at Swinburne University of Technology in Melbourne, Australia. The teams are using a patented formula developed by Axim to maximize the presence of CBD in the oral cavity during brushing.
“CBD is a powerful antibiotic and anti-inflammatory, so we have found it has great benefits in relation to oral care after years of offering our patented CBD-based chewing gum,” Axim CEO John W. Huemoeller II related in a written interview. „The inclusion of CBD for anti-inflammatory and antibiotic is intended to aid reduction in gum swelling while helping to eliminate infection-causing bacteria.”
The end game is a new line of CBD oral hygiene products, including toothpaste and mouthwash, for the treatment of symptoms associated with gum disease. Huemoeller cites consumer preferences as key to his company’s commitment to develop these products. „They [consumers] are eager to have wider access to safely regulated CBD for their various needs,” he believes.” Consumer buying trends will heavily shape the currently vast CBD industry as companies see buying trends lean to one type of product or another.”
Advances in cannabis-derived oral health research and development paired with this consumer power will only further an already active wave of changing sentiment about cannabis in America. „As CBD comes to light as a health supplement with a range of potential treatments, the FDA is already feeling the pressure from the CBD industry and its consumers to allow the non-psychoactive compound to be added into foods and beverages,” Huemoeller said.
Patents and customized cannabis
If the budding CBD oral health care product market grows to resemble that of click-to-buy CBD bath bombs one, the same formula with different labels will sit side-by-side on the shelf of a CVS. As these generic cannabis oral care products enter the market, unique characteristics, predictable and precise effects, and strong efficacy will be needed to separate premium brands from all the others.
Once the right mix of process and ingredients is realized, these „formulations” will need protection and preservation.
This is because the future of weed is in formulations, according to this great reference piece on customized cannabis by Madison Margolin of Rolling Stone. The direction of cannabis consumer market preferences is towards still about the experience—but ones with precisely anticipated effects. „Consumers — especially novice consumers — more and more will veer toward a manufactured cannabis oil, edibles, pills, or tinctures, designed by scientists to target the consumer’s specific needs,” she predicted.
„The basis of these products are specially curated chemical concoctions, donning specific ratios of cannabinoids (like THC and CBD) and terpenes, aromatic compounds that provide a distinct character to each of marijuana’s varied psychoactive effects,” Margolin explains.
All that research and development needs protecting.
That’s why companies like Axim are looking at the structure of CBD, and replicating it in a lab to make a completely new compound that retains 99% the same effectiveness as the plant or more. These novel compounds of synthetic CBD can be patented in the same way as any chemical product. But with a few caveats.
The United States Patent and Trademark Office (USPTO) has been issuing cannabis-related patents since 1942, but the process and criteria still aren’t clear and consistent according to experts. Differences between federal and state cannabis laws and lack of consensus in accommodating them have caused confusion for lawyers and cannabis companies on precisely how to approach patents and trademarks.
“This is not a black and white issue,” said Ryan S. Osterweil, an attorney with Day Pitney LLP, a Connecticut based law firm, reports Cannabis Wire.
First, to get a patent, the invention must be novel and cannot already exist in nature. So that’s a big hurdle. With 80 years of prohibition, there is a massive lack of prior art and documentation for cannabis, a key criteria in patent application. And lastly, patent law is exclusively federal, and cannabis is still a Schedule 1 drug.
When you have a patent, it’s up to you to monitor it. Axim takes their patent enforcement seriously. „Anyone who infringes on our patents will receive notification letters,” Huemoeller said. „We will evaluate the cost of pursuing legal action and take the next steps from there. If any company generates income from our patents, we will have the ability to pursue them.”
While worthy cannabis patents are being rightfully earned, they come with no assurance they’ll be enforced by authorities. William J. McNichol, Jr., Adjunct Professor at Rutgers University School of Law, predicted that “the USPTO’s willingness to grant cannabis patents is unlikely to be matched by a willingness of the Federal Courts to enforce cannabis patents.”
Patents are valuable, regardless, because those who play by the rules will license them. „The good (big) players will license our patents, so they will become a proven revenue source for us,” Huemoeller told me.
Cannabis and the dentist
So where’s all this leave you until these premium new products hit the market? And next trip to the dentist’s office, how can cannabis help me with that?
By applying cannabis to do some of the things it’s already proven effective for. CBD can help reduce anxiety before a dental procedure, for example.
“A dose earlier in the day or even the night before can be taken if anxiety’s already struck,” advises Dr. Jared Helfant, who practices dentistry in Broward County, Florida, in an interview with Merry Jane writer A.J. Herrington. His dose recommendation is 1-1.5 milligrams of CBD per 10 pounds of body weight. “CBD taken [an hour] before a dental procedure, and again as anesthesia wears off, will also help prevent or lessen the associated pain,” he surmised.
For post-surgery relief, a sterile pad dipped in CBD oil can be used to contain the wounded area after a tooth extraction, and works as an analgesic. „The same applies when sensitive gums are sore and need to recover after the periodic deep cleaning performed by a professional,” according to Royal Queen Seeds. „In addition to the analgesic effect, CBD helps keep the area free of bacteria.”
Be stealthy in your “office visit” use of CBD if you choose that route. Some web surfing dentists have been trained to size-up patients who’ve smoked a hemp cigarette outside.
An article from DentistryIQ advises dentists on how to “recognize the signs” of a patient who’s used cannabis prior to their procedure. “These signs and symptoms may include the following: euphoria, hyperactivity, tachycardia, paranoia, delusions, and hallucinations,” the article reads. It then continues, “Other research has noted that „[d]ental treatment on patients intoxicated on cannabis can result in the patient experiencing acute anxiety, dysphoria and psychotic-like paranoiac thoughts.”
Some signs are easier to recognize.
My recent recent office visit wasn’t awkwardly surreptitiousness or tainted by hallucinations at all…just softened by a whole lot more tolerance for pain. Thanks for the CBD vape pen, Select CBD, I still had one left over from last year’s Emmys bags.
Disclosure: I have no financial interest or positions in the aforementioned companies. This information is for educational purposes and does not constitute financial and/or legal advice. But Select CBD did hook me up with a great free vape pen.
The musky aroma hits you from the car park at the headquarters of Canopy Growth, the world’s largest cannabis company.
Inside this nondescript warehouse – an abandoned Hershey’s chocolate factory – in Smiths Falls, about 50 miles south-east of Ottawa in eastern Ontario, Canada, awaits the stuff of a stoner’s wildest dreams. Myriad grow rooms teem with row upon row of bushy marijuana plants at various stages of maturity, under intense lamplight, swaying in the breeze of dozens of fans.
A staff member wheels past crates full of pre-rolled joints in their hundreds. Another trolley holds 25 large bags of high-grade dried cannabis bud, a kilogram each, with a combined value of roughly C$250,000 (£150,000).
If anyone is the Willy Wonka of weed, it’s Canopy Growth’s co-chief executive, Bruce Linton.
Talking a mile a minute, his eyes gleam as he walks the halls of a facility that cost C$150m to build. “When I started it was officially the world’s worst idea, because there was no market,” he said. “There were no regulations and there were officially no patients. I was reluctant to tell my mother I was starting a cannabis business. Now she’s a cannabis patient, she’s like a drug dealer advising all her friends.”
In a timely illustration of how far the business – and the image of cannabis – has come, he takes a call from America’s home economics queen, Martha Stewart. Canopy has a deal with Stewart that envisages cannabis-infused chews for anxious pets. “Martha, you’re gonna hate this, I have to call you back.”
Canada legalised medical marijuana in 2001, but the recent weed boom was fuelled by a regulatory change in 2013 that effectively created a commercial market. Dozens of countries, including Germany, have brought forward their own medical marijuana legislation.
In 2018 Canada became the second country, after Uruguay, to legalise recreational use.
By catching the green wave, Linton has built, in under six years, a company valued by the stock market at £11.5bn, positioned to be the number one global player.
Though Canopy has yet to make a profit, revenues reached C$225m last year. More than half comes from its recreational cannabis brand Tweed, even though legalisation only took hold halfway through the year.
Its success is also transforming Smiths Falls, a former manufacturing town that was down on its luck. “Smiths Falls is very conservative,” says Tracy, who runs a taxi business. “The devil himself could be running as a conservative candidate and he’d win. Some people thought, ‘Oh my God, we’re gonna be growing pot?’ It’s employing so many people that there’s no opposition now.”
Built by the same Ontario folk who laid railroads and dug canals, Smiths Falls had lost big employers such as RCA, which pressed the first Beatles albums sold in North America. The Ontario Hospital School, a Stanley tools plant and a metalworks all followed suit, with Hersheys dealing the final blow by upping sticks in 2008.
The deputy mayor, Wendy Alford, used to work at Hersheys on the Reese’s Peanut Butter Cup production line. She says that Canopy Growth taking over the site has been “life-changing” for the town.
The company employs 1,300 people, about 800 of them Smiths Falls residents, close to 10% of the population. There are indirect economic benefits, Alford says. “Their security trucks needed new tyres, so they all go over to Hank’s Tyres and that’s just made his year. He’s hiring new people.”
Some of the early staff have been enriched by stock options granted when its shares were worth 100th of today’s price. It’s like the Silicon Valley tech boom, albeit on a smaller scale.
Bruce Linton, the founder and co-CEO of Canopy Growth, on the floor of the New York Stock Exchange in March. Photograph: Brendan McDermid/Reuters
Alford admits that weed wealth has gentrified Smiths Falls to a degree, pricing lower-income residents out of homes they might once have been able to afford. But there appears to be precious little obvious dissent about Canopy’s presence. The ongoing debate over whether the town should have angled or parallel parking is a far more divisive topic.
Linton would like to replicate the Smiths Falls revival in Britain, where the firm has a foothold. Canopy owns a UK subsidiary, Spectrum Biomedicals UK, and recently spent £43m on the beauty firm This Works, with an eye on a range of products infused with CBD, the non-psychoactive component of cannabis that has become a global health trend.
Canopy also has a partnership with the Beckley Foundation, the campaign group that has long promoted drug policy reform and engaged in pioneering research into psychedelic substances.
One thing Canopy hasn’t done is serve many prescriptions in the UK. In November last year, after a long-running campaign fronted by the parents of children with severe epilepsy, the law changed to permit medical cannabis, albeit in very tightly controlled conditions that campaigners and the industry say are unduly restrictive. A specialist must write a prescription before the product can even be imported. There are a handful of patients and Canopy has supplied one of them.
A worker collects cuttings from a marijuana plant at Canopy Growth in Smiths Falls, Ontario, Canada. Photograph: Chris Wattie/Reuters
Some of Canopy’s smaller rivals have made donations to the MP-run Conservative Drug Policy Reform Group to spur change. Canopy says it hasn’t spent a penny to shift politicians’ mindsets in the UK, but it has talked to them.
Like many in the industry, Linton also touts cannabis as an alternative to opioids, the heroin-like prescription painkillers that have spawned legions of addicts and caused overdose deaths, particularly in the prescription-happy US and Canada.
While there is anecdotal evidence that cannabis can treat pain, insomnia, anxiety and nausea – among other conditions – there is limited information from clinical trials to prove its benefits. One reason is that pharmaceutical companies have little incentive to test products they cannot patent.
“It was never taught in medical school and didn’t come through a process of inventing a molecule and testing if it kills people,” says Linton. “The objections are always the same, that we need studies. We reference 71 peer-reviewed studies, we’re doing our own studies, we have now data from 80,000 patients that have been with us up to six years. People find that they get relief.”
Canopy’s customer network presents a golden opportunity to collect data about its patients and product.
The growing operation uses state-of-the-art technology to trace every product back to its mother plant. Artificial Intelligence plays a part in keeping the high-powered lights on at the right time and ensuring even temperatures.
Promoting Tweed, Canopy Growth’s recreational cannabis brand, in the lobby at Smiths Falls, Ontario, Canada. Photograph: Chris Wattie/Reuters
Security is tight, too. There is a vault licensed to carry C$150m of product, to which just seven people have the code.
The 150,000kg of cannabis produced every year, here and in its other vast greenhouses, goes out in armoured trucks manned by security guards with guns. Each truck could be carrying a load worth up to C$25m, ranging from the traditional dried bud similar to that found on the street to cannabis oil and pharmaceutical-style gel caps.
Legislation is expected to come into force this December that will permit expansion to include cannabis-infused drinks, vaping pens and edibles such as gummy bears and chocolate. These products will end up in Canada’s growing network of cannabis shops, pristine retail spots more reminiscent of the Apple store or high-end parfumiers than dens of iniquity.
But breaking America is the biggest prize in the near future. Canopy recently signed a C$4.5bn deal giving it an option to buy the US cannabis firm Acreage, putting it in pole position to grab a slice of the US if it opens up further.
While many American states now permit both medical and recreational cannabis use, federal law still prohibits it. And that’s an impediment to raising money through the tightly regulated banks, not to mention building a presence that crosses state lines.
The importance of the US to Canopy’s future is one reason that Linton won’t say whether he is the type to get high on his own supply. He’s a frequent visitor to the US, where acknowledging the use of cannabis can still cause friction with border officials. “If you go to the south, you’ve never heard of cannabis, that’s my advice.”
A water tower in Smiths Falls, Ontario, Canada, where legally-grown cannabis is reviving job prospects. Photograph: Getty Images
Colorado’s CBD market is exploding, with no shortage of CBD-infused oils, tinctures, balms, salves, pills, food, beverages and more, for both people and their pets. But some potential consumers — human and animal alike — are put off by the products’ strong smell and earthy taste.
Trove is out to change that. A Colorado-based CBD company to offer products designed specifically for horses, as well as others for small animals and humans, Trove is committed to creating products that smell and taste delicious…at least to their target market. Made with CBD isolate extracted from hemp and other natural ingredients, Trove claims all of its products are 100 percent THC-free, GMO-free, gluten-free and vegan.
Trove was launched last fall by Deborah and Sam Carter, a mother-and-son team, who’d witnessed how CBD had helped one of their horses. “I had a little filly named Star that was adorable and doing great, and almost overnight developed a neuromuscular condition where she would shake uncontrollably all over her body,” recalls Deborah. “Vets couldn’t figure it out. We tried to diagnose it, we tried different kinds of drug therapies, we tried everything.”
Finally, after the animal had suffered for about ten months, “I came upon information and articles about CBD and how it’s been used to treat seizures and nerve pain,” Deborah continues. They searched for CBD products for Star but found nothing for horses. So they talked to a friend of Sam’s, a chemist who runs a cannabis extraction laboratory; he put them in touch with Mile High Labs, which recommended they start by giving Star 750 milligrams of CBD a day.
Marijuana Deals Near You
“So we came up with a dosage that might work, and at this point it was barely possible to go into her stall,” Deborah remembers. “But I put this dose of CBD on her food, and the next day when I went to her stall, instead of cowering and tremoring, she had her head hanging out of her stall window, wanting to be petted! It didn’t even seem possible, in one day.”
And they were soon able to reduce her dosage without negative effects. Deborah recorded the results every day, in what she calls their initial “in-house trials.”
The filly’s recovery was so miraculous that they felt they needed to share the reason. “CBD really helped her turn a corner, and so that started our need to investigate how this worked, why this worked, and how else it could help other animals and people,” she says.
Star wasn’t the only reason they wanted to see what was available. Sam, a former collegiate ski racer, had suffered several injuries in ski accidents but staunchly refused narcotics for his pain; he’d found that frequent use of over-the-counter pain relievers like Advil caused stomach problems and other negative side effects. “I wanted — and I think a lot of people want — an alternative to traditional narcotic pain medications, and non-steroidal anti-inflammatories,” Sam explains. “We wanted something different, and CBD is naturally a very effective anti-inflammatory. It has a number of profound applications as an anti-inflammatory — in neurological conditions, nerve pain, seizures, anxiety. In addition to that, it’s really well-tolerated, there’s no toxicity risk or overdose risk, and it actually improves gut health rather than destroying it.”
Deborah also saw possibilities in the human as well as the horse market. “We’re such an active community here in Colorado,” she explains. “Everybody is hiking, climbing fourteeners, riding horses, playing tennis, whatever, and it just wears your muscles out. CBD is actually really good for muscle recovery, so if you overdo your workout or pull something, it’s good to use before and after exercise. It’s also great for the aging population. You get arthritis, your fingers are stiff, you get injuries, but you still want to stay active. It’s huge to feel that you don’t have to reach for the Advil every day.” And unlike narcotic pain medications, CBD does not affect cognition, balance or intellectual capacity, so it is safe to use while driving, operating heavy machinery or doing mentally challenging work.
But the mother-son team wasn’t impressed with many of the CBD products they found on the market.“When we started to investigate what was out there and acquired products to see what was available, there were some really sketchy products,” Deborah continues. “Some good ones, but one of the things we found was that they all tasted horrible. And smelled bad. Sometimes you would get a product for a dog or a human, and the dosage would be so different from company to company. There wasn’t a lot of consistency, plus you couldn’t even swallow the stuff.”
So the Carters developed their own formulations for Trove’s products, working with a legal team to ensure future compliance with the FDA. Fortunately, they didn’t have to go far to find that help: Mark Carter, Deborah’s husband and Sam’s father, is a chemist who developed and implemented quality-control standards for the EPA; he consulted on the product formulations and reviewed the product analytics.
The Carters say Trove formulations are 100 percent THC-free, which was was very important to the plan. “We didn’t think that THC, based on our research and based on what little science there is on it, added enough benefits to what we were trying to achieve, which was something anti-inflammatory, for pain relief, anti-anxiety, gut health, protection of the bodily systems and overall wellness,” Deborah says. “The threshold amounts of THC didn’t justify the end, so we wanted a product that was pure CBD. That way, you could give it to your animals without worry, and if you’re in a profession where you are drug-tested or are a competitive athlete, you don’t have to worry.”
A canine customer and his CBD oil.
It was equally important that Trove’s offerings were all-natural. For this reason, Deborah and Sam experimented with different combinations of essential oils, rather than artificial flavorings and perfumes, to mask the unpleasant taste and smell of the CBD isolate. They did tests on friends and family to find out which smells and tastes were the most universally pleasing, settling with ingredients like lemon essential oil, peppermint oil, matcha green tea powder, lavender oil and bergamot; some products have healing properties beyond just those of CBD.
But even with products that taste good, the Carters realize that Trove needs to explain how CBD can be good for you. To that end, the company provides potential customers with guidelines, recommendations and links for additional research. “CBD is not necessarily a snake oil,” explains Sam. “It does have profound effects on a variety of things due to our physiology and how our endocannabinoid system works. But it isn’t a cure-all, and a big portion of what we do is consumer education, in that CBD may not be effective for some conditions. For people to take CBD seriously, there must be a good understanding of what it is and what it does.
“Quality control is a cornerstone of what we’re doing,” he adds. “Some people might shy away from being transparent about what’s in their products and the test results they get. We think it’s exciting, and it’s a model for the self-regulation that the CBD industry needs.”
Deborah points to the passing of the 2018 Farm Bill as a sign that the industry is headed in the right direction; among other things, that legislation allows for CBD from hemp plants to be used in scientific studies and for other research purposes. The Carters hope that will lead to regulated clinical trials of CBD in both humans and animals; they plan to use a portion of Trove’s profits to fund further research.
Trove products are available online (21+), and are also available in various retail locations in metro Denver, steadily adding new partners such as fitness centers, spas, chiropractors, physical therapists, pet boutiques, doggy daycares, and physical rehabilitation centers for both animals and humans. The Carters are currently looking to expand into more food and drink businesses as well. Trove’s newest partner is Just BE Kitchen, a paleo-friendly coffeehouse and restaurant whose commitment to healthy, all-natural food aligns with Trove’s mission; you can now add Trove’s “Natural” (unflavored) CBD oil to any of Just BE Kitchen’s specialty coffees.
The range of businesses that have partnered with Trove speaks to how vast the CBD market is getting. Trove’s customer base represents a wide variety of ages, professions and even species, with no end in sight. “There is no one market for CBD products,” says Sam. “Twenty-one-year-olds doing yoga and sixty-five-year-olds in a retirement home can both equally benefit from CBD.”
And don’t hold your horses.
Cleo Mirza recently graduated from Kenyon College with a degree in English and anthropology. She enjoys good food, cheap wine and the company of her dog, Rudy.
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