The Intoxicating Hemp Derivatives Marketplace

In recent weeks, I attended the 9th Annual NoCo Hemp Expo at the famous Broadmoor in Colorado Springs, CO. It is always a pleasure to connect with old friends (and new) and so many legacy hemp industry leaders and business operators.

I have attended NoCo since its inception in 2014 and am a big fan of the devoted following that Founder, Morris Beegle, brings together at his events. NoCo is one of the most unique trade shows in that, each year, it brings together the legitimate global who’s who of the hemp industry. I am honored and proud to be amongst that group of friends. This year, I provided an Opening Keynote with a message of hope and unity. A brief snippet:

“For the world to fully recognize the 50,000 uses of the hemp plant, we need to stand in unity and support for all uses of the plant. Detach yourself from your notion about what the hemp industry is supposed to be, and recognize and respect your fellow entrepreneurs, hustlers, and the like. Respect all uses in hemp’s family of uses. All of them. You don’t send one member of a family, because of controversy and disagreement, into the wilderness to die or jettison them, you must embrace them and work with them or you really do not have a family at all. For hemp to succeed as an industry, the entire family of uses MUST be recognized and respected.”     

All of the plant’s uses and contrivances must be respected for the hemp family of uses to exist. This year’s NoCo brought me down memory lane, as I recalled the various industry consumer product trends over the past nine NoCo Hemp Expos, like CBD, hemp flower, hemp cigarettes, CBG, THCa, etc.

Today’s market trend is Delta-8 THC and related compounds, such as Delta-10 THC, Delta-11 THC, HHC, and the like. Numerous states are actively promulgating regulations to ensure that these compounds are produced and sold in a manner that is safe and consumer friendly.

These products fall into a category that I generally describe as Intoxicating Hemp Derivatives (”IHDs”). One of one of the world’s leading manufacturers in the IHD space is Colorado-based MC Nutraceuticals. Founder, Bret Worley, comments, “Though we’ve seen mounting pushback on hemp derived cannabinoids over the past year, consumers and marijuana companies continue to buy these products. The reality is that the hemp industry has fast tracked cannabis plant science by at least 20 years. This has allowed all cannabis companies and consumers to access new beneficial cannabinoids.”

Make no mistake about it, IHDs are very much here to stay. So much so that economists and market analysts are beginning to categorize “cannabinoids” as a third distinct sector of the broad and sweeping cannabis industry. Leading cannabis industry Economist, Beau Whitney of Whitney Economics, and JD McCormick of the American Healthy Alternative Association, have gathered substantial data on three of the largest IHD states—Colorado, Virginia, and Florida. The numbers are staggering. The Colorado hemp-derived cannabinoid space:

• Represents annual revenues in excess of $527 Million Dollars, with steady growth;

• Utilizes over 24,000 acres of hemp biomass annually;

• Creates material acquisition costs (biomass procurement) in excess of $171 Million Dollars annually;

• Employs over 2,600 workers in Colorado;

• These workers are paid in excess of $126 Million Dollars annually; and,

• The manufacturing infrastructure in Colorado is worth far in excess of $205 Million Dollars.

Virginia’s total sales were estimated to be $1.2 billion, of which $562.2 million was derived from CBD and IHD sales in 2022. The industry employs approximately 4,263 workers, paying in excess of $161 million in annual wages.

Florida, oh my. Total sales in 2022 were estimated to be in excess of $10 billion, of which $6.9 billion was derived from CBD and IHD retail sales, while $4.1 billion came from manufacturing sales and $1.9 billion came from wholesale and distribution. The hemp industry supports the employment of approximately 104,000 Florida workers, paying in excess of $3.6 billion in annual wages.

Based on the fact that nearly 85% of all U.S. hemp biomass is ultimately utilized in the production of IHDs, this industry sector appears to be an extremely beneficial family member as well. Worley adds, “Consumer demand has risen exponentially. The types of consumers that we see are not choosing to walk away from marijuana dispensaries, but rather they are very discerning and elect not to shop at dispensaries. It is a unique consumer.”

Recent judicial interpretations have indicated that these compounds, or many of them, squarely fall within the bounds of the 2018 Federal Farm Bill and are legal. With this eye-popping economic data from the real-time marketplace, the flow of investors and funds seeking to make major “bets” in the IHD space through my practice has increased exponentially. Hundreds of millions are being invested into the breakthrough crossover space. As trends tend to come and go, the presence of IHDs in the marketplace has undoubtedly disrupted the consumer product industry. It appears to be here to stay, but you ain’t gonna learn what you don’t want to know.

Read more here: Source link

Leave a Reply

Your email address will not be published. Required fields are marked *