The Business of Cannabis

I’m going to talk to you about getting into some aspect of the Business of Cannabis, but first a little about why me: I’ve been pioneering new products and new segments in the soyfoods industry for 36 years, and hemp food for 22 years.

I sold tofu in the Reagan ‘80s 1, which made it easy to sell hemp foods in the go-go ‘90s. I was first-mover by years in what today is more than 90% of the Canadian hemp industry – and provided the first business model. I was on the Inc 500 list of fastest-growing companies in 1993 2 – and introduced more than 150 products to the market. I literally wrote the book on hempseed foods 3, twice 4, and spoke to 3 million viewers about hemp foods on the Roseanne Show (afternoon talk show) on CBS in 1999 5 .

After spending $2.5 million and 8 years developing a branded 22-member global hemp food supply network selling over a dozen hemp foods internationally, I walked away from it and retired in 2002 when a hemp fiber group killed the food market for years by suing DEA over food against my wishes. 6

Ten years ago I moved to Colorado, where I researched and documented the emerging CBD hemp industry. I started and run both the Hemp Food Association, started in 1998, and the Medicinal Hemp Association to advocate and educate on CBD. I’ve been advocating for Cannabis reform since 1972 and California’s first Proposition 19, to legalize.

I’m 60 years old now, and after spending the last 44 years studying and advocating Cannabis, I have to say that today is an incredibly exciting time to be alive if you are a friend of her. Just this week 7 more US states legalized, bringing to 45 (90% of the 50) states which have some form of Cannabis legalization 7 , including the population centers of California, New York, New Jersey, and Illinois. And President Obama said just last week that federal prohibition was “untenable.” 8

Notwithstanding the fact that Trump was elected President, things are about to change and change fast in the US, which means big changes for other nations will also move faster. The business of Cannabis is massive in its volume, turnover, scale, technology, potential, and most importantly, its relevance to healing, health, and well-being. 100% of the human and pet population can benefit from Cannabinoids. 9  If you are a young person looking for a career or profession, few other industries will offer you the security, creativity, upside potential, or fun.

While you may at first consider working with another Cannabis company to gain experience (even Master Growers make $120,000 10 ), I am here to tell you that perhaps the best thing you can do for yourself is starting your own business. In America, we use a French term for that: Entrepreneurship. Your own company gives you far more freedom from bosses, creative expression, the potential to make millions, and daily fun.

What is a “Cannabis Business”?

First, let’s define what is a “Cannabis business:” although the British have popularized the word “Cannabis” to mean what Americans call “marijuana,” in fact the genus Cannabis includes hemp, long marijuana’s red-haired stepchild11 . Few understand that while marijuana is basically only good for producing Cannabinoids and Terpenes (hallelujah!), hemp also does that, and so much more:

  • superfoods like protein and omega-3
  • sprouts
  • Cannflavins
  • Cannabisin
  • CBD
  • CBG
  • terpenes
  • building materials
  • clothes
  • textiles
  • diesel
  • alcohol
  • ethanol
  • carbon fiber
  • graphene supercapacitors
  • paper
  • culinary oil
  • and much more.

Hemp may disrupt entire old school industries, which is why recreational marijuana is more legal to grow than hemp in 7 states , and strangled by “research-only by universities” regulations.12

What Kinds of Businesses are Possible with Cannabis?

In Colorado, hemp and marijuana legalization brought about 18,000 new jobs in a state of 5 million. 13 Innovations such as 26% CBD hemp, 5% terpene marijuana, the first buildings made from hemp in the country, hundreds of millions of dollars from new taxes and new millionaires. The first CBD dabs, terpene dabs, fractional distillation, terpene as a solvent, sprouting, juicing, CBN production. Hemp (0.3% max THC) bred, grown, cured, extracted, and smoked like marijuana for the first time (for CBD). That’s the leading edge, and if you are looking for a new business to start, be sure to look to Colorado. In fact, I suggest you find best practices companies everywhere and emulate them. Borrow their best ideas for your new business.

I started an Inc 500 fastest-growing international food company with $400 and a spare bedroom and sold it 15 years later for almost $4 million.14 If I can do it, SO CAN YOU. Not all new businesses require tons of start-up capital. Consider leasing your equipment. Factoring your receivables. Get long payment terms from your suppliers but cash terms from your customers. Hit up your rich uncle to be an angel investor. Think outside the box, practice guerilla marketing.

Don’t waste your precious start-up capital on University, start a business instead (this coming from a guy with 2 degrees in marketing). Learn EVERYTHING you can about your chosen craft, but also marketing and finance because you are going to need it, big time.

The art in your business will often be developing workarounds for dealing with regulations, lack of financing, banking, and marketing. Expect push-back from friends, relatives, and the government, be polite but firm when confronted with insults to your vision.

Get up early and work late, because your competitors are. Maintain integrity, but don’t be a push-over. Milk the positive Public Relations aspect of what you are doing, that’s free advertising (use non-profit trade associations as a PR division of your company, the others do).

Give back to your community, just on principle. Always remember what drives you to do this, whether your customers, patients, children, or whatever.

Create entire new industries and product segments, and when you do, totally own them as long as possible. Protect IP ruthlessly, it might be worth a ton later on. Competitors are not your “Bro,” no matter how many times they call you that. Be more Pro than Bro.

How Big Is The Cannabis Market?

Every estimate on the size of the Cannabis industry is understated, some by an order of magnitude or more. Those are all based on how Cannabis will impact EXISTING industries and companies. On that they may be right: for instance, I expect at least 15% of pharmaceuticals will be disrupted by Cannabinoid medicines.15 However, those estimates don’t include the entire new industries and industry segments that will be created, like I did with “Hemp Nut” shelled hempseed in North America 20 years ago. It is very likely that the overall Cannabis industry in 20 years will be in the many Trillions of dollars, that’s thousands of billions of dollars.16

So What is Possible For You to do as a New Business?

The obvious ones of course: growing flowers and extracting (it’s not all about THC any longer; with 144 Cannabinoids and 120 Terpenes, the range of possible blends is over 14,000). Dabs, shatter, wax, crumble, oils, tinctures, capsules, nanoparticles, Nobacco and Not-Pot CBD flowers and dabs, vape drippers and cartridges, 17 inhalers, eye drops, skin sprays, nasal sprays, transdermal patches, chewing gum, isolates, edibles (the THC “medibles” market in just Colorado is larger than all edible hemp products imported from Canada 18 ), and more. All those could either be THC products, the somewhat more legal CBD, or whatever.

Then there’s the seed: shelled or pressed for oil, with the very high-quality protein and omega-3 in the nut you can make medical and nutritional drinks like Ensure, an energy blast like 5-hour energy shot, medical and special-diet foods, or functional foods. Extract cancer-fighting Cannabisin from the shells.19 Sprouts taste great and contain CBG and Cannaflavins. From the nut make burgers, breads, milk, cheese, yogurt, drinks, bars, bake mixes, cookies, ice cream, and more. Perhaps even with 25 mg of CBD per serving. Seed, sprouts, and fresh or dried tops can be powdered without heat. Juice fresh tops like wheatgrass. Seed oil can be used in cosmetics or cooking – and is high in omega-3 and GLA. Or in body care products, like lotions. It can even be used to make a hot oil hair pack, soap or diesel fuel.

Use Cannabis essential oil for its medicinal properties, or to scent a perfume or room freshener. It can also be used as a flavoring for candies and energy drinks to taste like a grow room in flower.

On the fiber side, you could do clothes, woven and nonwoven textiles, cordage, even replace fiberglass insulation with hempcrete. Someday your car and home may be powered by hemp: graphene supercapacitors made from hemp fiber are cheaper and perform better.20 Single-atom-thick carbon-fiber from hemp is totally possible, too.21 Ethanol and moonshine can be made from the stalk, which can be petrified to be harder than drumsticks. Plastics can be made with hemp22 , also paper and cardboard boxes, toilet paper. Zeoform furniture, and surfboards. Cars even contain hemp fiber in the interior panels and for sound-deadening.23 Then there’s phytoremediation, healing contaminated soil,24 as well as breaking up compacted soil, as a rotation crop, or stabilizing erosion.

Consider the ancillary industries: open an analytical lab, or a clinic for patients, or produce clones, or breed and multiply new cultivars.

Or in finance: do credit card processing, or lease equipment, perhaps a roll-up of a handful of Cannabis businesses, go public and float stock. If you have experience in other industries, pivot to Cannabis. The world of Cannabis is huge, and getting bigger by the day. Be part of it, it needs you and your talents, vision and good energy.

What About Prohibition?

If you live in a state or country with Prohibition and are afraid of trouble, know this: the most repressive laws and cruelest law enforcement on the planet couldn’t even make a tiny dent in the Cannabis industry in the US. As of now, 45 of the 50 states, 90%, have listened to a majority of the people and legalized some form of Cannabis.7 If it can happen there under very difficult conditions, it can happen anywhere. Including your country too, but you can’t wait for someone else to do it. You have to be the change you want to see. Write letters, make phone calls, see your politicians face-to-face, make them feel safe legalizing, that the people are on their side. Build coalitions with others, get active. If the laws can change in the US, they can change where you live too. Make it so.

In the meantime, do a Canna-business that won’t get you in trouble. Publish a magazine, write a book, educate in town halls, teach your friends and neighbors. Change is in the air, everywhere. Not only the US; the Police Union in Italy recently came out for legalization. There will very soon be a tipping point at which time massive change will happen fast. Like with the Hundredth Monkey phenomenon, YOU be the 100th monkey. You owe it to yourself, your brethren, and the world.
– Richard Rose
11/11/16
Cannafest, Prague

References:

1.
Stewart C. Santa Rosa Man Sells Food Derived from the Plant. San Francisco Chronicle. http://www.sfgate.com/bayarea/article/Hemp-Hemp-Hooray-Santa-Rosa-man-sells-food-2949011.php. Published February 23, 2001. Accessed November 18, 2016.
2.
Sharon’s Finest (281) – America’s Fastest-Growing Private Companies. Inc.com. http://www.inc.com/magazine/19931001/6089.html. Published September 30, 1993. Accessed November 18, 2016.
3.
Rose R, Mars B. The Hemp Nut Health and Cookbook. HempNut Inc.; 2000.
4.
Rose R, Mars B. The Hempnut Cookbook. Book Publishing Company (TN); 2004.
5.
Barr R. Roseanne and Richard Make HempNut Potato Salad (1999). YouTube. https://www.youtube.com/watch?v=PxnJxrWg9ys&t=36s. Published December 29, 2015. Accessed November 18, 2016. [Source]
6.
Information: Legal Cases: DEA Hemp Food Rules. Vote Hemp. http://www.votehemp.com/legal_cases_DEA.html. Accessed November 18, 2016.
7.
State Marijuana Laws in 2016 Map. Governing. http://www.governing.com/gov-data/state-marijuana-laws-map-medical-recreational.html. Accessed November 18, 2016.
8.
Maher B. President Obama: FULL INTERVIEW | Real Time with Bill Maher (HBO). YouTube. https://www.youtube.com/watch?v=xXH5agV7skw. Published November 4, 2016. Accessed November 18, 2016. [Source]
9.
Endocannabinoid system. Wikipedia. https://en.wikipedia.org/wiki/Endocannabinoid_system. Accessed November 18, 2016.
10.
Master Grower. THC JOBS. https://www.thcjobs.com/job/master-grower-9/. Published July 7, 2015. Accessed November 18, 2016.
11.
Cannabis. Wikipedia. https://en.wikipedia.org/wiki/Cannabis. Accessed November 18, 2016.
12.
Marijuana research will remain restricted with DEA decision. STAT. https://www.statnews.com/2016/08/10/marijuana-medical-research-dea/. Published August 11, 2016. Accessed November 18, 2016.
13.
Ingraham C. The marijuana industry created more than 18,000 new jobs in Colorado last year. The Washington Post. https://www.washingtonpost.com/news/wonk/wp/2016/10/27/the-marijuana-industry-created-over-18000-new-jobs-in-colorado-last-year/. Published October 27, 2016. Accessed November 18, 2016.
14.
Times SA. Tree of Life acquires soy cheese company. St. Augustine Times. http://staugustine.com/stories/042501/bus_0425010039.shtml#.WC8b6hIrISQ. Published April 25, 2001. Accessed November 18, 2016.
15.
ASX Company to Disrupt $916BN Big Pharma Industry? The Next Biotech. http://www.nextbiotech.com.au/asx-company-to-disrupt-916bn-big-pharma-industry/. Published July 20, 2015. Accessed November 21, 2016.
16.
L. Is Cannabis the World’s Next Disruptive Innovator? Harmony. http://meetharmony.com/2016/10/14/cannabis-industry-new-disruptor-market/. Published October 14, 2016. Accessed November 21, 2016.
17.
Product. CannaKorp. http://www.cannakorp.com/product/. Accessed November 21, 2016.
18.
Huddleston, Jr. T, Huddleston, Jr.                      Tom. The Legal Pot Market Could Hit $22 Billion in Sales By 2020. Fortune. http://fortune.com/2016/02/01/marijuana-sales-legal/. Published February 1, 2016. Accessed November 18, 2016.
19.
Cannabisin B induces autophagic cell death by inhibiting the AKT/mTOR pathway and S phase cell cycle arrest in HepG2 cells . Science Direct. http://www.sciencedirect.com/science/article/pii/S0308814612018468. Published June 1, 2013. Accessed November 18, 2016.
20.
Hemp fibres “better than graphene” – BBC News. BBC News. http://www.bbc.com/news/science-environment-28770876. Published August 13, 2014. Accessed November 18, 2016.
21.
Scientists mix carbon fibre & hemp for lighter auto parts – The Economic Times. The Economic Times. http://economictimes.indiatimes.com/industry/auto/news/auto-components/scientists-mix-carbon-fibre-hemp-for-lighter-auto-parts/articleshow/45822335.cms. Accessed November 21, 2016.
22.
Chemurgy – The Hemp Body or Soybean Car. Wikipedia. https://en.wikipedia.org/wiki/Chemurgy#The_Hemp_Body_or_Soybean_Car. Accessed November 18, 2016.
23.
Teague C. These Luxury Cars Are Made From Hemp. HERB. http://herb.co/2016/06/11/luxury-cars-hemp/. Published June 11, 2016. Accessed November 21, 2016.
24.
              MintPress News Desk                    . How Hemp Can Clean Up Radiation From Fukushima Nuclear Disaster. MintPress News. http://www.mintpressnews.com/how-hemp-can-can-clean-up-radiation-from-fukushima-nuclear-disaster/210098/. Published October 6, 2015. Accessed November 18, 2016.
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