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Business Global Business ofthe ‘Green Gold’ to move more than US $166 billion by 2025
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GLOBAL BUSINESS OF THE ‘GREEN GOLD’ TO MOVE MORE THAN US $166 BILLION BY 2025
According to the United Nations, drug use causes more deaths than ever and the black market is at record highs. However, nobody wants to miss out on the green gold rush. Marijuana, the most widely used illegal drug on the planet and the one that has grown the most in recent decades, is now becoming a lucrative business, especially in developed countries such as the United States and Canada where its recreational or medicinal use has been approved. We can’t fail to mention its growing therapeutic use in European Union countries such as Italy, Portugal, and Germany, as well as its future expansion in parts of South America.
The cannabis industry already has around 75 million legal consumers worldwide, while regular consumers are estimated to be around 188 million according to the 2019 UN World Drug Report presented on June 25th in Vienna, Austria. The level of business that legal cannabis, an herbaceous species that has been cultivated for more than 4,000 years and grows across the planet, is estimated to move around US $166 billion worldwide by 2025 and around US $200 billion by 2033. These numbers are without a doubt shocking if we consider that this business only reached US $12 billion in 2018, a succulent cake for the big corporations in distribution, food, beverages, tobacco, drugs, software, biotechnology and fertilizers, from Coca-Cola, Philip Morris to Pernod Ricard that all observe anxiously. . multinational company Pernod Ricard (France) and the world’s largest brewer Anheuser-Busch InBev (Belgium), among other major brands, are analyzing how they can capitalize on the relaxation of restrictions on cannabis-based products, with interest in creating beverages that allow them to capture new consumers.
The marijuana market is something like betting on the winning horse since it is a highly profitable business that goes far beyond simply smoking weed or using concentrates or ointments to relieve pain instead of opioids. The next challenge of this flourishing business is the massive introduction of edible products and cannabis-based beverages. Diageo (United Kingdom), the world’s leading company in the premium alcoholic beverage segment, as well as the While the industry has been experimenting with marijuana-inspired alcoholic beverages for some years now, the multinational companies that have chosen to risk their brand’s reputation by brewing beers or spirits infused with cannabis are scarce. It is little known that cannabis and beer have a close natural relationship, since both marijuana and the hop plant whose flower is an essential ingredient in brewing to provide bitterness, aroma and flavor, belong to the Cannabaceae family of plants.
“The strength of a brand remains important for beverage giants such as Coca-Cola and Pepsi, and associating cannabis with a global brand could destroy the value of that brand if a negative social stigma were associated with the main brands,” says a report by US risk-rating agency Standard & Poor’s, which predicted the grow
th of legal marijuana in different sectors through an expansion that in the coming years will be higher than other important consumer sectors such as packaged food, soft drinks, tobacco and alcohol.
Dutch company Heineken International, through its American beer brand Lagunitas and in collaboration with the cannabis extract manufacturer CannaCraft, launched a product called Hi-Fi Hops last year in California. It’s a zero-calorie carbonated beverage that uses cannabis as its main ingredient. Simply put, the alcohol in the beer has been replaced by the psychoactive ingredient in marijuana. Hi-Fi Hops comes in two presentations: one that contains 10 mg of tetrahydrocannabinol (THC) per can and another that contains 5 mg of THC and 5 mg of cannabidiol (CBD). With this beer, which for now is only sold in official cannabis stores selling at a high price of $8 per can, Heineken expects to reach sales of up to US $75 billion by 2030.
Cannabiniers, a company based in San Diego, California also decided to step forward and embark on the adventure of producing Two Roots, its own beer infused with hemp and cannabis, combining traditional fermentation techniques and achieving effects similar to any other beer but activating the marijuana within ten minutes of drinking, which according to its manufacturer lasts an hour and a half. Other emerging breweries such as US-based, Colorado-based Ceria Beverages are trying to consolidate a strong brand by manufacturing a THC-infused, non-alcoholic beer that promises to leave its consumers in a “mildly altered” state of consciousness. The factory has
53 bizrepublic.com partnered with Canadian company Growpacker to infuse, package, and distribute its beer with cannabis throughout southern California. Another drink infused with a careful mixture of THC and CBD is Saka, a wine made from grapes from Napa Valley and fermented in stainless steel by company House of Saka, founded by Cynthia Salarizadeh in California. This alcohol-free product allows consumers to feel the effects of marijuana in a period of 10 to 15 minutes, unlike other cannabis-based edibles that can take much longer to activate, which complicates dosing and safety according to Saka Wines CEO Tracey Mason. Due to the strict regulations that govern California, Saka Wines is marketed as “pink/ sparkling” or “bubbles” instead of wine and is available in more than 600 stores throughout California and Nevada. In addition, Salarizadeh plans to expand her brand nationally and globally. But in this business it is better to go slowly. In Canada, for example, marijuana products that can attract children (such as candies and popsicles) are banned, and cannabis food sales are expected to begin in mid-December. As reported by the government agency, Health Canada, food or beverages infused with cannabis will not be allowed to contain more than 10 milligrams of THC, the main psychoactive compound in cannabis. Producers and distributors will not be able to advertise healthy or dietary properties of the substance, or combine or even associate marijuana products with alcoholic beverages, so cannabis beer, which some companies are developing in the United States and other countries, will not be allowed in Canada. On the other hand, major global cosmetic brands have moved ahead of competitors by launching skin products made with hemp seed onto the market while waiting for certain legal gaps surrounding cannabidiol (CBD), a non-psychoactive molecule of cannabis, to be resolved. They use this substance that has virtues that are relaxing, antioxidant, and which are anti-inflammatory, although not fully demonstrated. Only a few companies like French company Ho Karan and Dutch company Fyllde have decided to take on the legal battle by daring to include cannabidiol as an ingredient in some of their beauty products. On the other hand, there is a growing number of people, nicknamed cannasexuals, a term coined by Ashley Manta, a sex therapist from California, who use marijuana products such as creams, sprays, candles, oils or flowers, not always psychoactive, applying them to the genitals to enhance sexual experiences. Although this practice is more linked to women, according to an investigation by the InternatioThe cannabis market in Canada operates within a sophisticated corporate environment.
Humble Flower Co. - Healing Massage Oil. | WeedPornDaily/Flickr
It is known that marijuana components include tetrahydrocannabinol (THC), which affects the mind and mood, and cannabidiol (CBD), whose possible use for medical treatments is being investigated by scientists.
“Modern perspectives on cannabis vary tremendously cross-culturally, but it is clear that the plant has a long history of human use, medicinally, ritually and recreationally over countless millennia,” said Robert Spengler, archaeobotanist at the Max Planck Institute for the Science of Human History in Jena, Germany. In fact, according to a new study published June 12th in Science Advances magazine, researchers have identified cannabis strains burned in burial rituals dating back to 500 BC deep in the Pamir mountain range in western China.
Likewise, it is known that the use of two parts of the cannabis plant, the fibers used to make hemp rope, navigation tarps and clothing, and oilseeds for food, dates back almost four thousand years. According to Mark Merlin, professor of Botany at the University of Hawaii in Manoa and a cannabis historian, cannabis seeds attached to ceramic fragments dating to approximately ten thousand years have been found in Japan.
Cannabis oil is thought to help a number of ailments. | Corbis/Getty
CANNABIS IN THE UNITED STATES
A change in society’s perception of cannabis has been so disruptive that in 31 States of the United States its use has already been legalized for medicinal purposes, although its approaches may differ significantly; and 11 States (Alaska, Colorado, Nevada, Oregon, Washington, Vermont, Maine, Massachusetts, Michigan, Illinois and California) have legalized its recreational use among adults over 21 years of age. Today, cannabis has also become a source of employment for some 160,000 people in the United States and 75% of the marijuana consumed in North America comes from legal plantations located in the State of California.
However, marijuana remains completely illegal in the States of Texas, Kansas, Idaho, Wyoming, Iowa, South Dakota, Wisconsin, Indiana, Kentucky, Virginia, Tennessee, Alabama, Georgia and South Carolina. And if we talk about prohibitions, the decision of Google stands out, which as part of tightening its content policy has banned in its app store those that facilitate the sale of marijuana. The Mountain View company has added a clause in its content policy where it specifies that Google Play does not
Despite the promise by Democratic Governor Andrew Cuomo to legalize marijuana for recreational use in his first 100 days of his new term, the State of New York had to stop the project due to lack of support among Democratic ranks and the issue will be discussed again in 2020, an election year where cannabis legalization could be an even more difficult challenge. Tax discrepancies, concerns about its effects on health or road safety or measures for the protection of minors were issues that New York lawmakers didn’t reach an agreement on to pass legislation, despite the fact that both houses are dominated by Governor Cuomo’s Democratic Party.
However, in June this year, the State Senate passed a bill that eliminates criminal penalties for owning up to two ounces or fewer than 56 grams of marijuana. Instead, public possession or use of that amount of marijuana will be sanctioned in New York with fines of US $50 for an ounce or less, or US $200 for between one and two ounces.
Meanwhile, the District of Columbia (Washington DC) is in a legal limbo after a local law passed in 2014 legalizing the possession and planting of small amounts of marijuana, but not for its sale or its taxation, since the federal government, which the District of Columbia depends on, never approved the budget to carry out the project. Therefore, a black market has emerged over the last five years in Washington DC taking advantage of this legal vacuum by selling items such as t-shirts, bracelets, and even stickers and gifting small amount of drugs to the customer.
“Let’s be clear that marijuana is not yet legal in DC. There is still a lot of work to do,” said Washington DC Mayor Muriel Bowser, who presented a bill last May to regulate recreational use of marijuana in the capital.
But as legal cannabis advances in the United States, so does the black market. In spite of all the regulations and controls, in some residential areas of San Diego County, to name just one example, a very profitable and highly demanded black markett has been formed consisting of clandestine laboratories dedicated to the production of oil and honey from cannabis, which is illegal in the State of California and whose value is four times higher than that of methamphetamines. One gram of this synthetic drug costs US $20 in San Diego, while one gram of honey or marijuana oil reaches US $80. Between 2018 and the first half of 2019 authorities have dismantled a total of 48 clandestine laboratories; many of them, far from using craft machinery, had advanced industrial equipment with an estimated value between half a million to two million dollars.
The marijuana for medicinal purposes would help to fight the opioid epidemics in the U.S.
MARKETS WITH GREAT POTENTIAL
Uruguay passed the world’s first law in December 2013 that legalized and left the production, distribution and controlled sale of marijuana in the hands of the government. Although, it wasn’t until 2017 that retail sales of the product became widespread. An unsuccessful statist model where only two companies authorized by the State grow cannabis that is sold in a few pharmacies, but that have not managed to produce the expected amount of up to two tons of marijuana per year, causing demand to greatly exceed the offer. The consumption of cannabis in Uruguay amounts, according to academic studies, to 35 tons per year. As the global legalization of cannabis develops, the importance of the Uruguayan market will diminish, although it could be an influential exporter of leaves and extracts for international markets.
Canada, an icon of progressivism and modernity, has been the first industrialized country of the G-7, G-8 and G-20 to fully legalize the production, distribution and sale of recreational marijuana in October 2018, in order to comply with a campaign promise by Prime Minister Justin Trudeau, who also rounded off his task by pardoning those convicted of possessing marijuana. Five million of the 37 million inhabitants of Canada (almost 15% of the population) consume marijuana, a business that currently moves about $8.952 billion Canadian dollars (about 6.820 billion US dollars) and, unlike the Uruguayan model, is much more liberal and is more focused on the collection of taxes. Canada also has one of the highest GDP in the world.
The cannabis market in Canada operates within a sophisticated corporate environment, with local companies now leading not only nationally but also internationally, as is the case of Canadian company Canopy Growth Corp., the largest cannabis company in the world (with investments in Chile and Colombia), whose main shareholders, with a 38% stake, following a recent injection of US $3.8 billion, is US Constellation Brands, based in Victor (New York), an international leader in the production and marketing of alcoholic beverages. It should be noted that the province of Ontario, where Ottawa, the capital of Canada, is located is the largest marijuana market in the country and allows 19-year-olds to consume it.
However, one of the unresolved problems for the Government of Canada is that the black marijuana market continues to expand in parallel with the legal market, due to low supply, low variety and high prices of weed in official stores (where it costs 57% more than on the street); in addition to the endless lines of people, a situation that forces many people to continue buying from illegal distributors, which guarantee them lower prices and faster transaction. In the last three months of 2018, the illegal sale of cannabis accounted for some US $900 million in Canada, 79%
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The legalization of marijuana for recreational purposes will be discussed again in New York in 2020
Sheet of a hemp on a background of 100 dollar bills close up. | MaYcaL/Shutterstock
of total sales in the country. Currently, 40% of Canadian consumers continue to turn to the black market. Bill Blair, an official appointed by Prime Minister Justin Trudeau to oversee legalization, acknowledges that the legal industry still has problems in the supply chain and that it will take a long time to get rid of street traffickers and end the black market.
In Italy, recreational use of marijuana is widely known but remains illegal. The powerful Interior Minister and Italian Deputy Prime Minister, Matteo Salvini, one of the greatest enemies not only of migration but also of light cannabis businesses in the country (stores known as coffee shops, which are popular especially in Rome), has stated that he does not want a “trafficker state” and that he prefers to legalize prostitution over marijuana; while the current medical cannabis system is in process of expansion because its production does not keep pace with the growing demand. According to official figures from health authorities, marijuana crops in Italy have increased from 400 hectares in 2013 to 4,000 in 2018.
In central stores in the city of Rome, a gram and a half of light marijuana costs between $28.8 and $32.3, while a light cannabis-based beer sells for about $2.8. The pioneer cannabis company in Italy is EasyJoint, which supplies more than 400 retail merchants who sell it not only in coffee shops but also on the internet, pharmacies and tobacco shops; taking advan
tage of the gaps in a law approved by the Italian government in January 2017 to regulate and promote the cultivation of hemp and the treatment of its products for the creation of fibers and preparations for food or energy use.
Specialists foresee a complete regulation of recreational marijuana use in Italy taking place in the next two or three years due to its large adult population, high consumption of alcohol and tobacco, and since the market is currently saturated with all kinds of illegal and legal products that do not exceed a concentration of 0.5% tetrahydrocannabinol (THC), the substance that gives the psychoactive effect, forcing the government to accelerate its regulation. Aware of this, several international corporations linked to cannabis have entered Italy awaiting further liberalization of recreational consumption in the medium term.
According to the report “The Cannabis Index: Where Will Legalization Move Next?”, prepared by the market research company Euromonitor International, the 15 markets with the greatest potential for the legal cannabis business are, in order of importance: Canada, United States , Italy, Uruguay, Germany, Chile, Australia, Mexico, Spain, Netherlands, Czech Republic, United Kingdom, France, Argentina and Portugal.
While the legal and illegal marijuana business in the United States is growing, a study by the University of Nebraska Omaha, based on data collected by the federal government between 1991 and 2017 among some 200,000 young people and published in the monthly American Journal of Public Health has warned that teenagers in the country consume ten times more marijuana than three decades ago, especially Latino and African-American minors.
Among African-Americans, the figures went from 2% in 1991 to 13.5% in 2017, and among Hispanics from under 1% to almost 9%. Among young white Americans, marijuana use grew from 0.3% to 3.7%. The study, by Dr. Hongying Dai, from the University of Nebraska Omaha’s College of Public Health, indicates that the exponential increase in the numbers
The cannabis plant contains THC and CBD (Cannabidiol). | SWNS - South West News Service
of cannabis users in the United States is due to the fact that there is a new social attitude towards marijuana since state laws on their consumption are now more relaxed. As recalled, in November 2012, Colorado was the first state in the United States to legalize and regulate the sale of recreational marijuana to people over 21, with almost two out of every three voters backing the Amendment 64.
CANNABIS IS NOT HARMFUL
Since 1961, marijuana carries on its back, or rather on its leaves, a label from the UN Single Convention on Narcotic Drugs (an organism that is something like the drug prohibition bible) that places it at the same danger level as heroin. In fact, a study conducted over 20 years by scientist Wayne Hall, a researcher at the University of Queensland (Australia), professor at King’s College London (United Kingdom) and an advisor to the World Health Organization (WHO), concluded that cannabis can be as addictive as heroin or alcohol, and cause serious mental problems especially in adolescents and youth. Wayne Hall’s study has been published in the prestigious medical journal The Lancet.
In turn, Mark Winstanley of the Rethink Mental Illness organization, in statements to the British newspaper Daily Mail, said that marijuana is not a safe drug as many claim, because scientific
The book Abbie Testaberg co-authored, “Cannabis Primer” is seen on the table as she and her husband Jody go through a to-do list at the Kinni Hemp Co., in River Falls, Wis., on April 18th. | Emily Hamer/Wisconsin Center for Investigative Journalism
studies have shown that its use is linked to psychosis and teen schizophrenia and smoking weed is “essentially playing a very real game of Russian roulette with your mental health.” Jean-Sébastien Fallu, an expert in the study of addictions at the University of Montreal, in Canada, commented that “the legalization of cannabis does not mean that it is a harmless substance. We must insist on it. There are several legal products, such as sugar and alcohol that we know have consequences. Now, legalizing marijuana is a positive measure simply because the ban has been worse. ”
But while there are selective critics who seem willing to stigmatize and aim only at the dangers of marijuana, a silent enemy continues to advance in the United States: opioids, whose medicinal use has skyrocketed in the country causing a chain of addictions, an epidemic; and even a pharmaceutical bubble that is causing about 60,000 deaths each year. That is, more deaths than the Vietnam War where an estimated 58,000 US soldiers lost their lives. studies have shown that marijuana can effectively treat chronic pain, for which opioids are commonly used. But unlike opioids, medical marijuana does not cause fatal overdose, so cannabis could supplant opioids and save some lives.
The opioid crisis in the United States and Canada from the abuse of synthetic drugs such as fentanyl, 50 times more potent than heroin, continues to have the attention of United Nations experts. This agency estimates that 4% of all American adults consumed some type of opioid at least once in 2017. Precisely, medical marijuana would be a potential way to help combat the opioid epidemic. Various
