BY DR. LLOYD COVENS
Charlotte’s Brothers Go Corporate
The Stanley Brothers (pictured here with NBC’s Natalie Morales-orange coat- and their Mom, Kristi Stanley Fontenot) have handed the Charlotte’s Web reins over to corporate management with last month’s appointment of Deanie Elsner, past senior marketing exec at Kraft, Johnson&Johnson and Kelloggs. This week Elsner held her first 1Q (2019) analyst call sharing CWEB’s product growth to 6000 retail “doors” in 18 states, and projections for $120-$170Mil. for 2019 gross sales, even as the first quarter brought in $21.7Mil, up 66% from 2018. Elsner says after a 2018 yield of 675,000 pounds of biomass, for 2019 CWEB will grow 700 acres of hemp (200 each in Colo and Kentucky, 300 in Oregon) and will launch its pet CBD line, and commence planning for a new Boulder corporate center. CWEB is uplisted to the Toronto Stock Exchange at the end of May.
AZ Progress Makes National News
It remains the biggest western state with no adult-use policy–and one of the largest MMJ states– but Arizona found two bright spots for MJ advocates last month. First, the state’s Supreme Court held that use of MJ concentrates were, in fact, legal under the state’s MMJ law, and felony charges against 100-plus patients are likely to be dismissed. At the end of the legislative sessions (literally, the final bill voted in session), Arizona lawmakers installed a strict program for cannabis testing and inspection against a wide range of molds, toxins and heavy metals. The bill also contained a repair to allow more rural MMJ dispensaries. Despite high hopes, no change to the state’s tough felony-level charges for simple possession were made. The group of pro-cannabis bills(including decrim) early in the session were largely torpedoed when the scandal-plagued legislator and sponsor eventually resigned. Nonetheless, Arizona activists have reported strong support for next year’s expected Nov., 2020 vote for legalization.
House to Vote on SAFE Banking Act
The SAFE banking act from lead sponsors Rep. Ed Perlmutter (D-CO) and —- Rep. Denny Heck (D-WA) is heading toward a likely positive vote from the US House, opening up a safe harbor for financial services to the cannabis sector. When it arrives in the US Senate, it will be assigned to the Senate Banking commission, chaired by Sen. Mike Crapo (R-ID), who has been no friend of cannabis, like his home state of Idaho. This week, however, Kentucky Sen. Rand Paul (a strong advocate for MJ reforms) said he had asked the chairman to have an open mind about the safety and accountability solutions the bill may offer. Crapo, according to Paul, will keep an open mind, even as several Republican members of the Senate have expressed support for the SAFE Act. To reach chairman Crapo with an informational(constructive) message, please email him at
Latest Industry Projections
The new annual compendium of in-depth cannabis activity from MJ Business is out, offering some key metrics for the near-term U.S. industry projections. Among the detailed review of state and federal actions, they project:
The marijuana industry will create a $39B – $48B economic impact for U.S. in 2019 with potential to surpass $100B in economic benefits in 2023.
Sales of legal recreational and medical cannabis in 2018 came in at an estimated $11.2B-$13.7B, or over three times the amount spent on E-cigarettes last year.
Legal cannabis sales represent a fraction of the estimated total demand for legal and blackmarket cannabis in the U.S., which is around $50-$60Billion.
The number of full-time workers supporting cannabis industry is expected to reach between 175,000–215,000 in 2019, an increase of 34% over 2018’s estimated 130,000–160,000 workers.
Colorado Governor Approves Multiple Reforms
Colorado regained some cannabis initiative-leader status with the passage of several new measures, all signed by strong MJ advocate in Gov Jared Polis. “These bills help maintain our leadership potential in job creation,” said Polis who signed bills creating a statewide delivery program (starting 2020 for MMJ, then 2021 for RMJ), social consumption licenses, and new allowances for expanded out-of-state investment into the state’s nearly 10,000 cannabis licensees. The social use bill will allow cities to opt-out, but supports indoor smokables, stand-alone clubs, or single event licenses where adults will be allowed to consume.
USDA to Protect Hemp in Non-Hemp States
The USDA general counsel underscored the transportation portion last week, stating that even states with no hemp growing authorization are not allowed to confiscate legal hemp shipments moving through their state. And as with the removal of hemp oversight by the DEA, to US Dept of Agriculture oversight, the general counsel held that no further enacting legislation is needed, given the express intent for those changes were effective with passage of the 2018 Farm Bill. “In other words, hemp is no longer a controlled substance. Also, by amending Schedule I to exclude THC in hemp, Congress has likewise removed THC in hemp from the CSA,” said USDA.
Hoban Law to Provide Hemp Education
Time for hemp education? Bluebird Botanicals, Hoban Law and Bish Enterprises are pooling their collective resources to provide consumer and business-level messaging to attempt to quell confusion over the entire hemp sector. “HempIsLegal.org” is the new site which will offer education on how the Farm Bill– and new state-based rules– have taken the formerly schedule 1 industrial hemp plant out of federal illegality. The web site also attacks several instances where social media giants (ie., Facebook) have deleted or altered access to hemp companies on their platforms.
Addressing often confusing topics surrounding hemp, the group stated for clarity:
- Hemp farmers are specifically authorized to access crop insurance, grants and certifications;
- Tribal governments are specifically authorized to cultivate and produce hemp;
- Interference with interstate transport of hemp and hemp products is expressly prohibited.
It was a busy week for cannabis companies reporting their first quarter (2019) operating results. Cresco, Truelieve, MedMen and Green Growth Brands all shared their financial results, most showing increased revenue from 2018, but continued multi-million dollar loses as they build geographic scale. Click here to look inside the thinking at MJ multi-state operator Acreage Holdings, see their May 28 investor deck.
–Based in Denver, Dr. Lloyd Covens, DBA is a seasoned cannabis industry journalist and the publisher of West420 NewsWeekly. Writing his doctorate on diffusion of innovations, Covens has been an expert journalist/researcher for 20 years chronicling new technology, global television and renewable energy advancements. He has reported on developments in the cannabis and hemp industry with weekly reports since 2014 covering the western U.S. for legal medical cannabis, recreational sales and hemp production. Covens is also the creator of the annual CO Hemp CBD conference held in Pueblo, Colorado.