Vol. 6, No. 52 -- August 30, 2019 - Edited by Dr Lloyd Covens
MR RECOVERY PLUGS HIS CBD JOURNEY AGAINST PAIN-- Adding his name to a growing list of superstar CBD proponents-- retired New England Patriots tight-end Rob Gronkowski(above) this week garnered national press as he offered his full backing to CBD for helping his own years-long pain from football. Speaking for Rhode Island-based Abacus Health Products (and their CBD-MEDIC brand) the NFL superstar encouraged his league, and other professional sports associations to begin allowing all athletes the right to access CBD for pain management and CTE symptoms. NBC News' report on the Gronkowski event also expanded their coverage to also detail positive sleep and anxiety results from THC-bearing medical-cannabis as well.
Hemp Harvest May Witness 40 to 65% Failure, Burn-Over Rate
For a booming market with hope for billions in new revenues, the upcoming U.S. hemp harvest season may only reach half its' revenue potential. While the USDA-estimated 128,000 planted acres is four-times larger than last year00 it may not deliver on that potential with THC-testing dis-allowance coupled with the steep learning curve of a crop not grown since the 1950s in many new states. With 2014 state plans for hemp growing still the rule-- an anticipated set of new rules implementing the 2018 Farm Bill are not expected to be effective until yearend --- farmers will be using a variety of testing methods to ensure the crop has not surpassed 0.3%(on a dry weight basis) of THC, and have to be destroyed.
Floods, grasshoppers and millions of male plants (mixed in with the high-CBD yielding female plants) have already taken a toll on the new acreage of CBD hemp plants. In Vermont and Oregon, state officials have been patient to allow the most-lenient types of tests for the presence of THC. For instance, Oregon allows delta-8 (pre-cursor to full THC development) to be tested, and then allows the farmer another 30-days to harvest. In South Carolina, a program to allow a tested THC limit up to one percent is allowed, but will require growers to maintain "chain of custody" through the processing cycle, where finished products will once-again be subject to a strict 0.3% THC limit. New states-- Michigan, North Carolina, North Dakota and Wisconsin-- all have the verbal support of state agricultural officials, however, none wants to run afoul of being branded as allowing unlicensed marijuana growing..
"Based on observations from last year, we assume that only 40% to 50% of the hemp planted will be harvested and suitable for processing, with the rest lost to a combination of poor weather, pests and disease, seed failure, plants that test "hot" for THC, plants with very low levels of CBD, and bottlenecks in the supply chain for harvesting, drying, storing, and processing biomass. This results in a range of between about 85,000 and 130,000 acres harvested successfully, writes market experts, Hemp Benchmarks in its just released August analysis.
Last month, Bill Richmond, USDA's director for specialty crops at the Agriculture Marketing Service said "the industry is not going to be happy" about strict THC testing rules. Richmond explained that the definition of hemp in the 2018 Farm Bill leaves little room for his agency to "be creative," and said the THC rules will require strict adherence after implementation for 2020. So will state plans that allow THC to rise to one percent-- or for rules allowing further processing into other non-consumable goods (ie., animal feed, biochar, sleep enhancer CBD) be allowed next year. Richmond refuses to even speculate, repeating that his agency is not tasked with "final products"-- but with rules for planting, testing and harvesting hemp plants themselves. Pricing continues to confound the market place. If 128,000 acres only yields half the total in harvest--64,000 acres would be able to produce 1000 to 1800 plants per acre.
At $30 per pound (or about ten percent CBD per pound) each successful acre might deliver $38,000 to $42,000 in gross revenues. Farmers hope that the higher side demand comes into play, however, processor demand will initially be higher for "flower and tops" of CBD-hemp, and over the fall, demand for full plant biomass is expected to decline. Returning to the Hemp Benchmarks analysis, we already have see the decline of biomass pricing during 2019--caused in part at processors begin to sell-off 2018 harvested biomass, to make room for the expected flood of biomass CBD product this fall.
Source: Hemp Benchmarks, copyright, 2019, New Leaf Data Services.
CANNABIS NEWS BRIEFS... The Drug Enforcement Agency says it will begin reviewing the three-year old applications of some 33 proposed growers of research-grade marijuana. Currently, the federal government only allows research cannabis to be acquired from the $70Mil University of Mississippi "pot farm." Researchers have complained that the Old Miss source for cannabis is unable to deliver consistent cannabis at any level of THC above 7 or 8percent. The DEA has not moved any of the competitive applicants who were invited three years ago to submit plans on becoming sources for researcher cannabis. Among the 33 current applicants, the University of Massachusetts and the Hawaii Agriculture Research Institute are seeking an extract license. The University of California Davis is also looking to grow cannabis and wants to expand its MJ genetics research.
Licensed Colorado cannabis operators may immediately begin seeking out-of-state investment-- including public companies-- under expedited rules issued by the state's Marijuana Enforcement Division. While initially targeted to begin opening applications, Nov. 1st-- under rules created with passage of the new House Bill 1090-- the state agency overseeing cannabis now says it will allow ownership applications for up to ten percent control (from any of the state's 10,000 retail, MIP, lab and cultivation permits) will be allowed to move ahead immediately. Per the MED release: On August 1, 2019, interim rules were adopted pursuant to HB 1090. These new rules appear to have immediately removed all restrictions on convertible securities in advance of HB 1090’s November 1, 2019 effective date. Prior rules presented several challenges for companies trying to raise capital, and required that any form of convertible securities (be it a warrant, option, convertible note or anything that could conceivably convert into equity ownership of a licensed cannabis business) be preapproved by the Marijuana Enforcement Division (MED) before any money changed hands. All convertible securities were referred to as “Permitted Economic Interests” and had to be held by an individual, rather than an entity. On August 21, 2019, the MED advised that certain convertible debt transactions may occur prior to the November 1, 2019 effective date. In order for these financings to be compliant, two conditions must be met:
1. None of the holders of the convertible debt can be considered controlling beneficial owners under the new rules (which means no one can be in a position to convert into an equity position of ten percent or more of the licensed business); and
2. The convertible instrument must clarify that the conversion may not occur prior to November 1, 2019.
Curaleaf may have been chastised by the FDA over health claims of CBD, but the company unfolded its' quarterly report and once again claimed it would soon surpass one billion in cannabis revenue, and challenge all others to be the biggest cannabis concern on the globe. Announcing quarterly gross sales of $111Mil., Curaleaf revisited several of its past 4 month acquisitions, led by the $875Mil($800Mil cash) acquisition of Chicago's GrassRoots, expanding CuraLeaf to 19 states. The company signed a sale-leaseback agreement with Freehold Properties, Inc. for six properties valued at $28.3 million. "We have made significant progress over the last few months in executing on our strategy to become the leading vertically integrated multi-state cannabis operator in the United States," said Joseph Lusardi, Curaleaf CEO.
Another call for global comments has again been filed at the FDA, this time questioning the drug scheduling for marijuana and other drug substances. the Agency) is reopening the comment period for the notice entitled “International Drug Scheduling; Convention on Psychotropic Substances; Single Convention on Narcotic Drugs; World Health Organization; Scheduling Recommendations; Dronabinol (delta-9 tetrahydrocannabinol) and its Stereoisomers; Cannabis, Cannabis Resin, Extracts and Tinctures; Cannabidiol Preparations; and Pharmaceutical Preparations of Cannabis” that appeared in the Federal Register of March 1, 2019. The Agency is taking this action to allow interested persons additional time to submit comments. https://www.federalregister.gov/documents/2019/08/29/2019-18714/international-drug-scheduling-convention-on-psychotropic-substances-single-convention-on-narcotic
Second Half: Major MJ/Hemp Shows & Expos
Sep 4-7: TORONTO- 2nd MJBizCon/Global Sep 4-6: PORTLAND Cannabis Science Conference Sep 6-7 - NASHVILLE -- SouthEast Hemp Expo
Sept. 10-14: BALTIMORE -- Natural Products Expo Sep 15-16: VANCOUVER - ICBC: Intl Biz Conference Sep 25-28: LOS ANGELES: Cannabis World Congress Oct 8-9: LONG BEACH- Calif. Cannabis Indus Assn/NCIA Oct. 10-11 SAN FRANCISCO - New West Summit Oct 23-26: BOSTON- Cannabis World Congress- Expo Nov 1-4: CHARLOTTE (NC)– 6th Hemp Industry Assn Nov 20-22: CALGARY: Canada Hemp Trade Alliance Dec 5-6: SAN DIEGO: CANNABINOID-Natural Products Dec. 11-13 LAS VEGAS – MJ BIZ National Show Dec. 14-15 SONOMA, CA – Emerald Cup
West420 NewsWeekly is targeted to adults 21-plus and is not a solicitation for any cannabis product or derivative. Please share with your colleagues. Serving the cannabis professional since 2014, we appreciate you comments via email to " DrLLoyd@CBOutlook.com" or for back issues, please Visit This Link