CBD Health

Politics have long gone hand-in-hand with corruption, operating under the cover of grand promises, altruistic campaigns, and bureaucratic mazes. And as cannabis has inevitably entered the world of politics on its march to legalization, it has collided with the giant roadblock that is corruption, as well.

In this case, corruption’s roots are perhaps a little more easily traced–hyper-localized power over licenses, limited on an arbitrary basis that provides the perfect guise for bribes in various forms, such as community impact fees and donations.

Nearly all states where cannabis is legal either bestow licensing power to local officials or impose statewide limits that don’t reflect the high market demand. Thus, the power to grant licenses–the very key to a multi-billion-dollar industry–is distributed between handfuls of politicians in each state. And naturally, these keys don’t come cheap.

“We’ve seen in some states the price go as high as $500,000 for a license to sell [cannabis]. So, we see people willing to pay large amounts of money to get in to the industry,” special agent Regino Chavez says during an FBI podcast.

The charges against Jasiel Correia, former mayor of Fall River, Massachusetts, on 24 counts revolving around extortion of private citizens with cannabis dispensaries aspirations, allegedly amounting to $600,000–highlighting another example of cannabis corruption. Correia’s chief-of-staff, Genoveva Andrade, has already pled guilty to bribery and extortion charges.

The FBI is looking into “pay-to-play bribery schemes” across several states, including Missouri, Florida, and New York, something that San Bernardino mayor John Valdivia dismisses as “baseless accusations” by salty wannabe cannabis businessmen.

Moreover, former Maryland state delegate Cheryl Glenn was sentenced to two years for taking bribes to support cannabis companies, among other favors.

“Competition belongs in the market, not in the license application process,” Morgan Fox, media relations director for the National Cannabis Industry Association, says.

These, along with many other similar examples, all lead back to the arbitrary license caps, imposed not for health and safety, but for all the wrong reasons. Instead of leveling the playing field, these laws breed fierce financial competition to enter it.

Not to mention that this type of corruption enables only those with the right connections and capital to join an industry where people of color and others most impacted by the War on Drugs cannot even get a seat at the table to start.

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When cannabidiol (CBD) and hemp finally hit the stock market — after decades of prohibition — many investors saw an opportunity. However, in 2019, much of the optimism behind hemp’s stock jump came tumbling down, namely due to an overabundance in products and lack of demand for this quantity.

So, where can we expect stocks to go from here?

This is a tricky question to ask and you should be wary of any article that claims they know where the stock market is heading. While educated guesses can be insightful, no one really knows whether a stock is going to go up or down. There are a number of different factors that play a large role in this outcome, many of which are unique to the particular industry.

In terms of CBD, all eyes are on US government, as their long-awaited regulations are going to play a significant role in hemp stocks. For example, some experts have predicted that cannabis extracts in foods and beverages could increase demand for CBD.

There are two major issues with government regulations that are playing a significant role in hemp and CBD sales:

1. A lack of Food & Drug Administration (FDA) approval and the hazy legal status in some states impacts the public’s trust and knowledge of CBD. Not to mention, it allows businesses with irresponsible practices to enter the marketplace.
2. Overregulation on particular aspects of the industry prevents consumers from trying CBD through new avenues.

With the right federal regulations, CBD does have the potential to work its way up again.

Still, we shouldn’t forget that part of the reason stocks went down in the first place is overproduction. Many experts claimed there would be a huge demand for CBD when the 2018 Farm Bill legalized hemp and hemp-derived products. And while there was an initial spike in demand, these predictions were far from accurate and the market just wasn’t there.

With all this said, it’s impossible to know what’s going to happen next. If government regulations work in favor of the CBD industry, consumer confidence may further increase. However, the opposite remains possible if government regulations create more skepticism in the marketplace.

Since the hemp industry is still very new, we need to remember how important our role is too in spreading knowledge about this plant. Currently, there’s too much misinformation out there and, with that, a lack of trust overall in hemp and CBD.

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Sana Packaging, founded by Ron Basak-Smith and James Eichner while attending the University of Colorado Boulder’s MBA program, aims to revolutionize product packaging with its hemp-based solutions.

“Ron approached me with the idea to do something about cannabis packaging. While a lot of positive things have come from cannabis legalization, one of the biggest negative externalities is packaging waste,” Eichner explained.

Eichner and Basak-Smith were awarded the prestigious university pitch competition for their efforts, and decided to continue developing Sana after graduating through a business accelerator program in Spring 2017.

“What started off as wanting to explore innovative materials and addressing simple problems turned into a mission driven company where the ultimate goal is to design and develop cannabis packaging for a circular economy,” said Eichner.

Today, Sana Packaging works to bring sustainable solutions through 100% reclaimed ocean plastic and 100% plant-based hemp plastic.

Eichner characterized today’s current economic model as incredibly wasteful: resources are extracted to create a product which is then produced and used only to be disposed of immediately after.

The ultimate goal of Sana’s circular economy is to minimize waste and pollution, “from material sourcing to the end-of-life cycle for products,” to keep products and materials in use to ensure materials being used are “reclaimed” to regenerate the natural world.

Rather than simply curb negative environmental impacts, Eichner and Smith also wish to draw tangible benefits from sustainable products: “You could apply that to any of the materials we use, whether hemp-based plastics or reclaimed ocean plastic. In order to create these products, we have to remove waste from the environment.”

“When we finished the accelerator in 2017 and started working on this full-time, we were still in product development. We had 3D printed prototypes of our products, such as hemp-based pre-roll tubes and containers.” Sana remained in this phase until 2018 which included finding a willing manufacturer as hemp-based materials are much more uncommon in packaging.

The company’s first products were launched in the summer of 2018 during a six-month pilot program. By January 2019, Sana opened its doors for sales to the wider public. Sana has plans to have eight unique products in 2021.

At the end of the day, sustainability is the ultimate goal.

“I think the cannabis industry is interested in our packaging. It is growing rapidly, creating a huge need for sustainable products. It is a market that has room for a startup like us. And the industry has a high willingness to pay for sustainable materials,” even though they come at a premium, according to Eichner.

Sana’s customers are in North America, with the majority being based in the US, as well as additional customers in Canada, Puerto Rico, and Guam.

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Vancouver-based cannabis and psychedelic medicine firm Thoughtful Brands has dissolved its German subsidiary Verrian to focus on its core business of direct-to-consumer brands, e-commerce, and the vertical integration of its supply chain.

Verrian had established a foothold in the emerging field of psychedelics to treat anxiety, mood, and substance abuse disorders. It operated a pharmaceutical manufacturing facility in Radebeul, a suburb of Dresden, which was involved in clinical studies using psychedelic compounds for the treatment of opiate addiction. It has now sought creditor protection in Germany.

Thoughtful Brands said Verrian lacked sufficient working capital to sustain current operations and satisfy creditor demands, and had therefore been compelled to institute insolvency proceedings. It has suspended all operations and is awaiting the appointment of a court-appointed preliminary administrator to oversee its affairs in the interests of its creditors.

This follows Thoughtful Brands’ acquisition of Kentucky-based hemp grower and processor American CBD Extraction Corp in September in a deal estimated to be worth $9m.

The acquisition enables the firm to become fully vertically integrated, controlling each aspect of the supply chain including production, logistics, and value chain. The firm plans to launch new “superior quality” CBD brands, offering products made from hemp it has extracted and produced itself, as well as products formulated for future brand clients.

The closure of Verrian comes at a time when the use of psychedelics is becoming increasingly acceptable and commercial interest in “magic mushrooms” is growing.

Oregon recently became the first US state to legalize psilocybin, the main active ingredient in magic mushrooms. Oregon’s Measure 109 will give legal access to psilocybin for mental health treatment in supervised settings.

Meanwhile, citizens in the District of Columbia voted to decriminalize the use of magic mushrooms and other psychedelic substances, including the active ingredients in ayahuasca and peyote, with the passage of Initiative 81, the Entheogenic Plant and Fungus Policy Act of 2020.

The measure does not legalize the drugs but makes possession of them among the lowest enforcement priorities for DC police, according to the initiative, which still faces some hurdles before it becomes law. The DC Council needs to approve the measure before sending it to Congress for review. Congress then has 30 legislative days to block it or allow it to become law.

Congress has continually attempted to stop DC legislators from passing drug liberalization efforts. Republican Andy Harris, a representative for a nearby Maryland district, has already said he would work to oppose such measures.

Also recently, in California, state Senator Scott Wiener called for the decriminalization of psychedelic drugs for therapeutic benefits:

“When the legislature reconvenes, I’ll introduce legislation to decriminalize psychedelic drugs. These drugs have been shown to have medicinal value treating depression, PTSD, and other conditions. We need to stop criminalizing drug use and addiction.”

“I’ll be working with Assembly members Evan Low and Sydney Kamlager-Dove on this important step toward a more rational, science-based, and public health-focused approach to drugs.”

Still, it’s important to note that, despite the continued interest and the growing number of legislative victories for psychedelics, they remain a niche product with very few current opportunities for profitable business.

Thoughtful Brands clearly thought the likely time remaining until it would see a sufficient return from Verrian to justify the current expense was too great. As investors continue to look for new opportunities in the psychedelics area, that wariness should be remembered.

Original article: https://www.cbd-intel.com/thoughtful-brands-pulls-out-of-german-psychedelics-to-focus-on-american-cbd/

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