Anne-Marie Fischer, Author at Green Market Report - Page 2 of 5

Anne-Marie FischerJuly 24, 2019
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In a time of designer bags, jewelry, shoes, and a slew of other consumer goods being knocked off, the cannabis industry has also fallen victim to counterfeit products.

Imagine going into what you believe is a legitimate cannabis dispensary or online shop and being sold what you think is a King Pen, Brass Knuckles, or Heavy Hitter vape, only to find that in comparison to what you’re inhaling, “you’re better chewing on lead paint”. 

This is an occurrence more common than we think within the cannabis industry, according to Ashesh (Alex) Shah, CEO and Founder of solo sciences the consumer-products intelligence company dedicated to preserving the integrity of the cannabis industry as a whole by protecting cannabis consumers from potentially harmful bogus products. 

The Extent of Counterfeit Cannabis

solo sciences dug into their own research and estimate that up to 80% of all packaged cannabis products appearing within the cannabis market, both illicit and legal, are counterfeit. This means that 8 in 10 times, cannabis consumers around the U.S. are consuming products that have not been distributed through licensed providers, manufacturers, distribution companies, and retailers. Most common cannabis products being knocked off are vape pens, trying to represent the big brands of that product category.

Just a Google Search away, people with less than honest intentions can access knock-off packaging from cannabis brand giants, to fill with low-quality oils, or in some cases, products that don’t contain any cannabis at all. With so many new consumers putting their trust in the hands of dispensaries and budtenders being sold counterfeit packaged cannabis products, Shah remarks that “It’s a perfect storm that could mean the end to the industry.”

A Tool to Protect Industry Integrity

“Major brands are being misrepresented,” says Shah, as licensed brands only legally do business with licensed retailers. To fix this, Shah, along with co-founder Kate Flannery, solo* is bringing to the cannabis industry technology yet unseen by the industry, and the anti-counterfeit solutions industry as a whole. 

The world and the industry’s first cryptographically secure cannabis product authentication system, solo*CODE™ is the first-of-its-kind, closed-loop intelligent authentication system for cannabis products. The platform uses an app to decipher uniquely encoded labels that create a “digital fingerprint” that can only be used and decoded by the solo* app. What is produced is a product authenticity report that acts as a certification for cannabis brands, telling the consumer that the product is 100% authentic.

With 80% of products estimated to be counterfeit, the problem is mostly exacerbated by online retailers that get their materials mostly from China. Disposable counterfeit vape cartridges either comes pre-filled with mystery oil or is sent empty for the retailer to fill. Since there is no regulatory body overseeing what is going into these products, it could be low-grade oil, pesticide-ridden products, or even synthetic cannabinoids, which have proven to be fatal in some cases.  

As the black market continues to thrive, unlicensed shops also add to the problem of pushing counterfeit packaged cannabis products. For instance, according to the Los Angeles Times, more than 200 illegal dispensaries operate in L.A. alone, which could be a conservative estimate. 

“The world of cannabis is murky, unpredictable, and often not safe,” said Ashesh (Alex) Shah, CEO and founder of solo sciences in a company press release. “As brands and governments are struggling to fight the illicit market, we created solo* to solve that problem by creating transparency into what cannabis providers are actually selling to consumers. solo* is designed to keep people out of the dark when it comes to what they’re consuming and putting into their bodies, so they feel secure and knowledgeable about the products they’re purchasing.” 

According to Flannery, the solo* app is about “putting the power into the hands of the consumer”, allowing the consumer themselves, not a budtender at a possibly unlicensed shop to tell them what products are authentic.

Data Experts Playing “Data Judo”

Solo sciences is not your average cannabis data company brought together to sling just another data set into the cannabis space. Shah is a former CIA Profiling Specialist on the Presidential Task Force holding 8 patents, while Flannery is a former consultant in the medical device and pharmaceutical industries, working among the likes of Medtronic, Philips Healthcare, and Hospira/Pfizer. Filling out the team of 20 employees at solo sciences are former members of the CIA, DEA, and advanced professionals in the technology of detection. The development of solo*CODE involved “image processing containing the most complicated algorithms,” according to Shah. “This is beyond a QR code,” he adds. 

Solo sciences came across the platform and its potential “accidentally, but it’s become the most important part of our product”, said Flannery to Green Market Report

The solo* app couldn’t be easier to use for the consumer, and it not only empowers the consumer with information about the legitimacy of their product but also invites the consumer to provide feedback on their experience with their product. 

How solo* Works

Through building widespread awareness among the cannabis community, consumers will recognize the solo* label on cannabis products, which will invite them to scan the code into their phone via the app. Information about the possible side effects (as reviewed by a doctor), THC:CBD ratio and other product attributes, package and dosage details, and producer information with the license number will appear to confirm a product’s legitimacy. 

Following this authentication process, consumers are invited to provide feedback on their product after its use, prompted by a series of interactive questions that will ask the consumer their mood along with their level of energy, focus, and even their level of confidence. “This allows us to close the loop and provide intel to brands from the voice of the individual,” explains Shah.

Shah also explains that the emergence of solo* “puts the screws to brands to be transparent” in offering product information to this platform that will eventually make its way directly into the hands of the consumers. The platform allows for transparency upstream and downstream, something that Shah refers to as “data judo” to Green Market Report, by working with manufacturers to help ensure customer safety. “Consumers also have a level of expectation around technology when it comes to the data that’s available to them,” adds Flannery. “This helps everyone on all sides,” remarks Shah. 

Spreading Authentication Across the Industry

In addition to publicly unveiling its cannabis authentication product, solo sciences also announced today that more than 1.2M units with the solo*CODE™ will start shipping in August through its partnership with Vertical Companies, a seed-to-sale multi-state operator

“We’re proud to be a launch partner for solo*CODE™,” said J. Smoke Wallin Vertical Wellness CEO in solo science’s press release, “We demand the highest standards in terms of product safety and excellence. We want the distributors in our network to know that our brands and CBD products they’re selling in stores or online are the real things. Through the solo*CODE™, consumers can get a download of exactly what’s going into their bodies, in real-time through the mobile app. This builds trust and transparency and should be the industry standard across the industry.”

To date, solo* has partnered with 53 cannabis brands to join forces with the new cannabis authentication system. It’s expected to ship more than 9 million encoded units into the market over the next 12 to 24 months.

 

 

 


Anne-Marie FischerJuly 23, 2019
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If there is someone who exemplifies a smart investor in the cannabis industry, it’s Marion Mariathasan, currently the co-founder and CEO of Simplifya, the industry’s leading regulatory compliance tool for licensees and those who audit them.

Mariathasan is a serial investor and entrepreneur if there ever was one. More attracted to ancillary cannabis services and solutions, he has personally founded or invested in about 14 different cannabis companies, including Ceylon Solutions, providing high-quality development solutions for the cannabis industry. He is also the largest shareholder of Leafwire, a platform for companies and investors to create funding relationships, and continues to be on the Boards of several organizations.

Green Market Report caught up with Mariathasan to hear about his path to where he is now in the cannabis space. 

Name: Marion Mariathasan

Title: Co-Founder/CEO 

Company: Simplifya

Years at current company: “I wish I could take credit for this concept,” says Mariathasan, explaining that the renowned cannabis law firm Vicente Sederberg LLP is to be attributed to the idea surrounding compliance software. Mariathasan came on board in October 2016 as the company’s first investor, making his commitment in February 2106 in advance of the launch. 

Education profile: Mariathasan is certainly well-equipped to take on a role in the tech side of cannabis. A graduate from the University of Kansas and Emporia State University, studying Architecture, Computer Science, and Computer Information Systems, his career emerged at the forefront of technology. He began his work as a computer programmer for a leading medical software company and has since held positions in some of the world’s leading tech companies. 

Most successful professional accomplishment before cannabis: It’s difficult for Mariathasan to isolate just one successful professional accomplishment before making his foray into cannabis. Mariathasan is responsible for staring a handful of tech companies, so he sees his success as more cumulative. “What I’m most proud of is taking a concept that aims to solve a problem, and being able to build upon it, grow it, raise money, and sell it.”

Company Mission: Simplifya gives businesses the power to delegate, review, and proactively manage compliance tasks across all facilities and license types. With easy-to-use tools for scheduling, audit management, and tracking issues, Simplifya gives license holders a 360-degree view of their compliance. According to Mariathasan, their mission extends “to enable the cannabis industry and the movement to continue forward by helping license holders preserve their license. License is the most valuable asset that they have. If they’re not compliant from a regulatory and operational perspective, can get hundreds of dollar fines or lose their license.” 

Company’s most successful achievement: Through working with its partners and cannabis license holders, Simplifya has learned and understood the pain points of the license holder and create technology around it. To make this possible, Simplifya has created relationships all around the industry that puts compliance at the forefront and have the industry value it. “It takes a village”, says Mariathasan, “The investors coupled with the team has been our best achievement thus far, but as we bring on multi-license operators, mom and pop shops, government stores, is what makes this feel like we know we’re at the right place.” 

Has the company raised any capital? In December of last year, it was announced that Simplifya had raised $3 million in Series C funding from the private equity fund Merida Capital Partners. It was announced then that they would pursue additional funding, and this sure occurred to the tune of $7.3 million raised through a Founder’s round, and the series of funding rounds, including the last Series C round completed by Merida Capital. “The investors are second to none in this industry,” Mariathasan remarks. 

Any plans on raising capital in the future?: Simplifya plans to hold another raise of capital towards the end of this year to help with the company’s expansion. “We’re in 17 states right now,” explains Mariathasan, “Now we have opportunities to go into more states and international. Our initial focus was marijuana dispensaries, and now we’re bringing what Simplifya has to offer to governments, banks, and insurance companies.”

Most important company 5-year goal: “We exist to make cannabis easier to operate in,” says Mariathasan, “We serve medical marijuana dispensaries, and we’re helping governments, banks, and insurance companies with mitigating the risks that come with legal cannabis while streamlining projects.” 

Thus, Simplifya will continue to make relationships with companies within and external to the cannabis industry. “Government didn’t have the expertise to enforce the regulations they created,” says Mariathasan, “Now it’s easier to stay on top of the cumbersome regulations, as we can now help manage cannabis compliance from a government perspective.” 

What does Mariathasan attribute to the success of Simplifya? “A lot comes down to the team and their experience with cannabis. If they can put a strategic plan together, and execute it, while building a personal connection then we are successful together.”

 


Anne-Marie FischerJuly 12, 2019
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5min51570

According to a recent Headset market report, “Understanding the CBD market in state-legal cannabis”, CBD could potentially take up the majority of sales among non-inhalable products in legal cannabis states. If current trends continue, CBD products could even potentially become the majority of sales among the cannabis industry at large.

The data giant revealed insights into the shift in popularity and sales for CBD products, noting the passage of the U.S. Farm Bill as an important catalyst for allowing more people to access cannabis products. The report is quick to note that despite going into the mainstream, hemp-derived CBD products (now purchased at places like CVS Health Corporation (NYSE: CVS) and Walgreens) and cannabis-derived CBD products (traditionally purchased at dispensaries) are to be considered two different things.

Here are some important highlights of the Headset market report that Green Market Report finds of interest:

Google Searches for CBD

The Headset report reaches back to 2015, citing data from Google searches for CBD. At the start of that year, Google searches for CBD were nil. Google searches for CBD were at an all-time spike in May of 2019, representing a 100% increase of when CBD first hit the Google searches later in 2015.

A Non-Smoking Experience

While the cannabis industry is characterized by smoking and inhaling cannabis products like traditional cannabis buds or flower and concentrates, the CBD trends are showing that one-third of CBD sales are going to non-inhalable products. Customers are demonstrating a preference for edibles, topicals, tinctures, and sublinguals. Headset suggests that “the CBD market is expanding on top of the existing market for high-THC, psychoactive inhalable products, rather than inside it.”

The report also states that there is a “new and distinct customer base” that is more health-conscious, preferring to stay away from pre-roll and vapor pen products. 

CBD Product Categories

Within the non-inhalable CBD products category, Headset compiled data from Washington and Colorado and saw that there are 5 emerging product categories: Beverages, Capsules, Edibles, Topicals, and Tinctures & Sublinguals. 

CBD products have experienced a surge in growth in the past 12 months in comparison to tradition, THC-based products. 

CBD Edibles have always had the highest market share and retains this position, with customers gravitating to high CBD products. CBD Edibles experienced a 43.9% growth this year, compared to 24.8% growth for non-CBD edible products. Almost 50% of dollars spent on all edibles in 2019 were spent on CBD Gummies. Within the edible product category, honey, sugar, and sweeteners, CBD products made up almost 1/3 of the proportion of overall sales. 

Capsules are not showing much growth in the overall product categories. Headset speculates that this is because capsules are “usually associated with medical conditions” and that CBD is used as therapy rather than a full-on medication.

Tinctures and Topicals & Sublinguals are the dark horse of the CBD market, once having just a tiny sliver, and now taking a giant slice, growing nearly 60% in sales in the past 12 months in comparison to high-THC infused products’ 10% increase.

Headset suggests that “if your company is producing Gummies, but not CBD Gummies, you may want to adjust course”.

Opening Wallets for CBD

Average item price (AIP) and the number of products people are adding to their basket in the CBD category (basket penetration) are rising concurrently.

Since 2015, CBD went from only 3% of baskets to 7% in 2019. Average item price also is rising with the interest in CBD, indicating that “consumers aren’t only more interested in CBD, but also more willing to spend money on it”. 

 


Anne-Marie FischerJuly 10, 2019
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Extractors get their own holiday every year. July 10, also known as 7/10 has been fondly named “Dab Day” within the cannabis community. Spelling “OIL” when flipped upside-down, 7/10 is the day when cannabis concentrates and extracts are celebrated, and sales data is showing that cannabis consumers are eagerly participating in the celebration.

“While 4/20 is the celebration of the cannabis plant itself and the many victories won against prohibition it also serves as a rallying point for the ongoing struggle to fight and end prohibition. On the other hand, to me, 7/10 symbolizes a kind of cannabis renaissance brought about by the widespread use and understanding of cannabis OIL,” said Troy Ivan, CEO of ExtractCraft. “Cannabis oil is the base of all concentrates used in vape cartridges, wax, shatter, edibles, tinctures, and topicals to treat and bring relief to those suffering from a wide variety of serious ailments. The OIL represented by 710 is the source of healing from the plant and is why we named our first product the Source. It is so fundamental to what ExtractCraft does you might notice the clock in the background of our videos is ALWAYS stopped on 7:10.”

Green Market Report obtained data from both Flowhub and Headset demonstrating that consumers are happily opening their wallets on 7/10, making major dents in weekly and monthly sales. Here’s what we found out:

Flowhub tracked sales data for Tuesday, July 10, 2018, across Alaska, California, Colorado, and Oregon markets. They found that on this day, concentrate sales increased 28%, and transactions increased 23% more than the average Tuesday. Overall sales increased 18%, with transactions increasing 13% and the average sale amount increasing 7%.

“Traditional flower is the most widely known form of cannabis, but demand for cannabis concentrates is rapidly growing in regulated markets due to being a more efficient and combustion-less way to consume. Patients who need a higher dose of cannabinoids or those who are looking for a cleaner and more consistent method can all benefit from trying concentrates,” said Jeffrey M. Zucker, President of Dip Devices. “Dip Devices aims to normalize the use of these concentrates by making the consumption methods more accessible and less intimidating. We believe concentrates can offer significant benefits to the cannabis consuming population, many of whom are intimidated by “dabbing,” as concentrate consumption is often called. Having a day (7/10) dedicated to celebrating concentrates specifically brings it even further into the mainstream and lets people see that it can be enjoyed by anyone, not just the heaviest users.”

What kinds of concentrates and extracts are people buying on 7/10 in these states? Shatter sales reign supreme at 42.4%, with cartridges following at 21%, and wax at 17.5%, with unspecified products and live resin making up the consumer’s basket profile.

“When consumers started migrating from smoking flower to vaping concentrates, we saw an opportunity to create a line of precision-effect cannabis products,” said Charles Jones, CEO of LucidMood. “By extracting only a portion of the cannabinoids and terpenes found in the plant, we would be able to dial in very specific mood states – including ones that would appeal to boomers that are coming to cannabis for the first time or returning to it after an extended break. LucidMood can be a great starting point for newbies as well as a great go-to for more experienced users who appreciate the subtleties of our formulations and the quality of our ingredients. 4/20 has come a long way in recent years and though it may not be as widely celebrated now, I think 7/10 deserves continued attention.”


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Move over, 4/20, there’s a new cannabis “holiday” to be celebrated. July 10, also known as 7/10 has been fondly named “Dab Day” within the cannabis community. Spelling “OIL” when flipped upside-down, 7/10 is the day when cannabis concentrates and extracts are celebrated, and sales data is showing that cannabis consumers are eagerly participating in the celebration.

Green Market Report obtained data from both Flowhub and Headset demonstrating that consumers are happily opening their wallets on 7/10, making major dents in weekly and monthly sales. Here’s what we found out:

Flowhub tracked sales data for Tuesday, July 10, 2018, across Alaska, California, Colorado, and Oregon markets. They found that on this day, concentrate sales increased 28%, and transactions increased 23% more than the average Tuesday. Overall sales increased 18%, with transactions increasing 13% and the average sale amount increasing 7%.

What kinds of concentrates and extracts are people buying on 7/10 in these states? Shatter sales reign supreme at 42.4%, with cartridges following at 21%, and wax at 17.5%, with unspecified products and live resin making up the consumer’s basket profile. 

 

Still, according to Flowhub, 7/10 in 2018 didn’t come close to 4/20 of that year, with 4/20 beating 7/10 sales by 64%. Overall, with 7/10 concentrates and extract sales increasing, and the awareness of the holiday building, people are buying more concentrate cartridges, with this market seeing a 94% increase in sales since 2016.

Similarly, Headset compared the average sales data from the 4 previous Tuesdays to July 10, 2018, across the Washington, California, Nevada, and Colorado markets. 

Headset found that total cannabis sales in these states went up 10% on Dab Day in 2018, with concentrates (up 49%) and vape pens (up 36%) driving sales for that day. While flower sales remained relatively unchanged, people were buying more beverages (up 24%) and capsules (up 36%).

Washington saw the biggest sales increase of concentrates, up 100%, while Colorado trailed behind at an increase of 78%. These states also saw the highest sales increases for vape pens, up 45% in Washington, and 57% in Colorado. Headset speculates that this is likely due to these markets being the most mature recreational markets, with Dab Day making a greater permeation in the cannabis culture of these states. 

In these states, Live Resin reigned supreme, taking 30% of sales, while wax and shatter both saw a 23% increase in sales. Headset expects the numbers to increase for this 7/10/19.

With the popularity of 7/10 and cannabis concentrates rising, Green Market Report expects that we’ll see unprecedented sales for these products in all recreational markets.

Happy 7/10!

 


Anne-Marie FischerJune 25, 2019
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Like many in cannabis, Chris Driessen is just happy to be doing what he is doing in an industry that he is extremely passionate about. Currently the Executive Vice President of Sales & Business Development at SLANG Worldwide (“SLNG”), an industry leader in branded cannabis consumer packaged goods. SLANG, with its headquarters in Toronto, currently operates across 5 continents, including 10 states in the U.S. SLANG Worldwide has achieved over $250M in worldwide sales, with a SLANG branded cannabis consumer product being sold across the world 1 every 4 seconds.  

Full birth name: Chris Driessen

Title: Executive Vice President of Sales & Business Development

Company: SLANG Worldwide

Years at current company: Driessen assumed the role of Executive Vice President of Sales & Business Development this past January when Organa Brands, for which he was President, was acquired by SLANG International.

Education profile: Driessen acquired a Bachelor’s Degree in Public Relations from the University of North Texas’ School of Journalism

Most successful professional accomplishment before cannabis: Like many, prior to cannabis, Driessen was working in a job that he wasn’t finding personal fulfillment in despite his financial success. He considers his decision to “get out of Dodge” and into a fulfilling career his most successful professional accomplishment. Driessen worked in sales for the hospitality industry, specifically selling coffee machines. “Coffee machines are the thing that everyone has, but no one wants to buy or talk about until it breaks,” he remarked, “I felt the walls closing in around me,” Living in Denver, Colorado, he recognized he had a great thing going on in his own back yard, “I knew cannabis was my passion,” he says. After some soul searching, speaking with his family, he finally decided to make the foray into the cannabis industry where he had the opportunity to “put his skills on display”, and couldn’t be happier with his transition, especially with his recent success with his new role at SLANG.  

Company Mission: SLANG is a portfolio of branded cannabis consumer products that is a leading distributor of cannabis brands worldwide. The company operates on three core competencies: extraction, brands, and distribution. Driessen and his team recognize that within cannabis, there are so many demographics that can be appealed to, with no shortage of opportunity to market useful products to different kinds of people. SLANG seeks to reach all people with branded cannabis packaged goods that meet their needs and their lifestyle.

Company’s most successful achievement:  Driessen attributes the success of SLANG’s ability to aggregate world class brands for distribution into dispensaries over 5 continents, in 17 markets to the people and talent the company has collected.  “What makes SLANG unique is the people that have rallied under the banner of SLANG,” says Driessen, “These people are all hand-selected with a great deal of though into what puzzle pieces are going to fit together well. In putting together SLANG’s brands and the talent that represented them, the company focused on skill sets, and ensuring the individuals that were brought in had skill sets that were complementary to each other as they pursue their core competencies: extraction, brands, and distribution. “Leveraging gifts and skill sets has been what has allowed us to achieve what we have together,” says Driessen.

Has the company raised any capital (yes or no): Yes, although this is not a current focus of SLANG at the moment.

If so, how much?: The fundraising completed, to the tune of $66M CDN was to complement the transactions including acquiring and executing new brands prior to the company going public in January.  

Any plans on raising capital in the future? Driessen explains that SLANG is a company that raises money and uses it judiciously. While the company is nimble and is ready to ride with the twists and turns of the cannabis market, there are no big plans in the imminent future for a capital raise, but “our eyes are open,” he states.

Most important company 5 year goal: “Same thing it is today,” says Driessen, “We know who we are, and we stay in our lane.” SLANG will remain dedicated, now and in the future, to making world-class branded cannabis products. At the moment, SLANG doesn’t have plans to get into retail or create storefronts, “Right now, we’re all about building brand loyalty and brand awareness, and being able to execute that within the market.”

 


Anne-Marie FischerJune 20, 2019
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Data is everything in cannabis right now. With this “data race” going strong, the cannabis industry is benefitting from useful data as firms compete to release the most interesting data on the profit-driving consumer behaviors of cannabis users.

Now, we have new insights on the why around cannabis use and overall cannabis attitudes, thanks to a new cannabis-related data set that the analysts call a “giant sandbox of data to play in.”

Consumer Research Around Cannabis has partnered with Radium Research LLC to provide the cannabis industry with insights they have never seen before through the use of predictive analysis, an approach to data that allows analysts to make predictions about future behaviors, attitudes, and consumer patterns.

Whereas the cannabis industry thus far has relied on attitude surveys, Point of Sale data and state reports to understand the who, what, where, when, and how of cannabis consumption, these new research partners are offering the why… and you may be surprised by what they found.

Using data from over 110,000 local market surveys that spanned the Greater Toronto Area and 85 U.S. markets, the analysts mined the 15 key factors that drive people to say that they support legal cannabis. Key indicators included voting behavior, whether they drink alcohol, whether they use tobacco and even looked at whether they attend religious services on a regular basis.

In their analysis of the data, what stuck out most is that the choice to support the legalization of cannabis is an issue of morality, and largely coincides with a person’s likelihood to attend regular religious services. For instance, in the case of Illinois, the analysts found that those who attended regular religious services were 83% opposed to cannabis legalization, while those who did not attend religious services were 89% in favor.

Jeffrey Stein, VP of Consumer Research Around Cannabis explained to Green Market Report that asking several hundred behavioral questions on medical and recreational cannabis use can offer predictive analysts a window to understanding the “key ingredients” that lead someone to support legal cannabis.

Dr. Paul Crowe, President of Radium Research, who created his company to apply his experience in predictive analysis in product innovation and segmentation, reminded us that a lot of the data going around in the cannabis space right now is like looking through a “rear view mirror”, whereas the approach of predictive analytics allows us to look ahead, and innovate.

“Innovation is the lifeblood of any company,” says Stein, “If you don’t innovate you’ll sink because someone will always innovate better than you. Once the “big guys” of the cannabis industry jump in [to the data game] you’ll need to know the future.”

This partnership between Consumer Research Around Cannabis and Radium Research offers the cannabis industry, policymakers and companies from other industries an opportunity to truly get into the heads of potential, current, and future consumers in order to predict what makes them tick.

An example of how this data can be used by cannabis companies is comparing purchasing data, for instance, individuals who use a vaporizer to consume cannabis, and their attitudes towards cannabis, and the reasons they use it. Companies in their marketing approaches can now understand certain drivers for consumers and market their products based on these indicated attitudes.

This team has partnered with NORML of Illinois & Chicago to offer their data, and the approach of predictive analysis, as a tool to help this group “know exactly where they need to go to change attitudes.”

 


Anne-Marie FischerJune 17, 2019
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“It’s crazy to think how much money states are flushing down the toilet by keeping marijuana in an illegal market,” said Mason Tvert, VP of Communications at Vicente Sederberg, LLP upon the release of a report that detailed how the over $1.2 billion raised in cannabis tax revenue has helped the state thrive.

According to the report released this week from Vicente Sederberg, LLP, since regulating cannabis for adult use in 2014, the Colorado government has collected more than $1 billion in cannabis-related taxes and fees, which have gone into local and state improvement programs.

This report coincides with and includes data from the Colorado Department of Revenue’s release of cannabis sales and revenue figures for April 2019. The Vicente Sederberg report, which offers specific figures and analyses on Colorado cannabis tax revenues can be downloaded here: http://bit.ly/64MonthsOfA64.

Since legalizing, Colorado has 2,917 licensed marijuana businesses and 41,076 licensed individuals working in the industry, according to the Department of Revenue. $6.56 billion worth of marijuana products have been sold in the state of Colorado since 2014.

Taxes collected by the state help fund a range of youth and public health programs, which include mental health services, addiction services, affordable housing, youth literacy initiatives, and anti-bullying programs at the K-12 level.

As the Vicente Sederberg report states, more than $283 million in marijuana-specific tax revenue that has been raised for K-12 schools, most which has been spent on school construction. The first $40 million raised each year was allocated through Amendment 64, which directed the Legislature to enact an excise tax on wholesale transfers of marijuana for adult use. The excise tax revenue was allocated to the Building Excellent Schools Today (BEST) grant program, funding the abovementioned school construction projects.

“We were never under the illusion that legalization would be a fiscal panacea, but we knew it would have a substantial and positive impact,” said Vicente Sederberg LLP founding partner Brian Vicente, “Funds are being used on everything from building schools to hiring school health professionals and paying for bullying prevention programs.”

Following the Department of Revenue report, Colorado’s governor, Jared Polis said: “Today’s report continues to show that Colorado’s cannabis industry is thriving, but we can’t rest on our laurels. We can and we must do better in the face of increased national competition. We want Colorado to be the best state for investment, innovation and development for this growing economic sector.”


Anne-Marie FischerJune 13, 2019
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Despite legalization continuing to spread, and efforts advocating towards federal legalization of cannabis, the black market in the U.S. for cannabis continues to thrive across the nation.

Simply put, despite access and legal product being available, people are still as or more likely to purchase their cannabis from black market sources, with this trend not showing any signs of stopping.

Consumer Research Around Cannabis, a U.S. research company specializing in data for the cannabis market released data from a survey that tracked where people were sourcing their cannabis in many major U.S. states.

Black Market Sales In Fully Legal States

Here are just a few snapshots of cities, and where their citizens are sourcing their cannabis, in some of the legal recreational states:

  • Denver, Colorado: In Summer, 2018, 9.4% of survey respondents were still purchasing cannabis non-legally, a small incline from the 9.2% of the previous year. In comparison, 28.4% were purchasing from legal markets in 2018, up from 26.6% the previous year;
  • Las Vegas, Nevada: Illicit market purchases rose from 9.7% to 12.8% from Spring to Fall 2018. At the same time, legal purchases rose from 21.5% to 29% in the same time period;
  • Seattle, Washington: Purchases in the illegal market rose from 7.8% to 10.3% from Winter 2018 to Winter 2019. Purchases in the legal markets rose from 25.6% to 28.6% during this time period.
Comparison of Legal and Non-Legal Purchase of Cannabis Among Adults 18+ in Four US Markets Where Recreational Cannabis Purchase Is Legal, 2018 and 2019
Market Denver Portland Las Vegas Sacramento
Visited legal cannabis retailers/dispensaries at least once a month or less 28.4% 28.3% 29.0% 17.9%
Non-legal purchase 9.4% 11.1% 12.8% 11.9%
Non-legal purchase as a percentage of legal purchase 33.1% 39.2% 44.1% 66.5%

Massachusetts recently legalized adult use cannabis sales and BDS Analytics believes that its black market sales will fall from 90% in 2018 (when recreational sales were illegal) to 76% in 2019. However,  the state has been slow to issue adult use licenses to retailers. Until the dispensaries are open in larger numbers the black market consumers aren’t likely to make the switch if it is inconvenient.

Black Market Sales in Legal Medical States

Here is a snapshot of cities, and where citizens are sourcing their cannabis, in some of the legal medical cannabis states, showing a trend of an increase in illicit market purchases:

  • Albany, New York: Illicit market purchases rose from 8.5% in Winter of 2018 to 12.5% in just a year; at the same time, purchases in the legal market rose from 4.1% to 9.6%;
  • Cincinnati, Ohio: In Fall 2017, 9.9% of survey respondents indicated they bought from the legal market, compared to 12.4% in Winter 2019; legal purchases rose from 4.2% to 6.6%;
  • Detroit, Michigan: Illegal purchases rose only slightly from 11.3% to 11.6%; legal purchases rose from 26.6% to 28.4%;
  • Jacksonville, Florida: Illicit market purchases rose from 7.1% in Fall 2017 to 11% in Winter 2019; at the same time, legal market purchases rose from 3.4% to 7.7%;
  • New Orleans, Louisiana: Between Winter 2018 and 2019, illicit market purchases rose from 7.3% to 12%; there was an equally large jump in legal market purchases from 3.6% to 10.6%.

In these medical states, illicit purchases, according to this survey, slightly declined:

  • Minneapolis, Minnesota: In Spring 2018, 9.4% of respondents were purchasing from the illegal market, in Winter 2019, that number had declined to 6.8%; legal purchasing rose from 4.3% to 7.2%;
  • Pittsburgh, Pennsylvania: In the spring of 2018, illegal spending was at 9%, and had fallen to 7.8% by fall; legal market purchases rose slightly from 5.4% to 6.4%.
Comparison of Legal and Non-Legal Purchase of Cannabis Among Adults 18+ in Four US Markets Where Only Medicinal Cannabis Purchase Is Legal, 2018 and 2019
Market Pittsburgh Orlando Minneapolis Cincinnati
Visited legal cannabis retailers/dispensaries at least once a month or less 6.4% 8.8% 7.1% 6.5%
Non-legal purchase 7.8% 9.8% 8.5% 12.4%
Non-legal purchase as a percentage of legal purchase 140.0% 111.4% 119.7% 190.8%

 

The trend is clearly showing that where legal cannabis is available, people will purchase it, yet, they are still as comfortable, if not more, sourcing cannabis from the black market despite the rise in legalization.

The Cases of California & Colorado

The survey completed by Consumer Research Around Cannabis did not focus on areas in California, save for representing that 11.9% of respondents in Sacramento were purchasing from the illicit market, while 17.9% were purchasing from the legal market in Fall 2018.

This being said, California’s illicit market stands out as one that will never be snuffed out.

80% of California’s over 500 municipalities currently do not allow for legal cannabis stores, forcing the black market to go darker. From Northern California’s cannabis farm raids to the raids in Southern California on hundreds of illegal cannabis shops, California’s illegal market is not expected to die down any time soon.

In comparison to Colorado, which has 562 licensed cannabis stores, California has only 620 licensed stores, despite being six times the size of Colorado. This number is 10% less than what was expected when the state legalized.

According to a 2018 Eaze report titled “The High Cost Of Illegal Cannabis”  1 in 5 Californians purchased cannabis from the illicit market. In addition, Eaze found that 84% of those are highly likely to repeat that behavior in the future due to the illicit market having cheaper products and no tax.

At the same time, despite being the first state to legalize cannabis and cannabis being widely available, Colorado’s black market is growing, with much of the cannabis that is being grown in the state being sent to other illegal states where there is greater profit potential.

Barriers to Legal Market Participation

With each state facing challenges to get consumers’ buy-in to legal cannabis markets, there are some common barriers inhibiting legal market participation, including:

  • Lack of brick-and-mortar stores;
  • High taxation and pricing (i.e. in Denver, cannabis is taxed 23.15%);
  • Regulations on products such as THC limits that are deemed restrictive;
  • Hesitancy to support “big cannabis” with a value often placed on craft growing;
  • Habit, convenience, and discretion of being able to purchase from the black market (i.e. delivery services);
  • People are growing their own cannabis with new home growing laws;

Cannabis in Canada: A growing black market

Despite being the first G7 country to legalize cannabis at a federal level this past October, Canada’s black market is growing stronger than ever.

Scotiabank analysts Oliver Rowe and Ben Isaacson calculated in a research report that the black market in Canada could control 71% of all cannabis sales in 2019, but they expect that figure to drop to 37% by 2020. In the report cited on BNN Bloomberg, Scotiabank said, “We forecast illicit conversion will be swift, although limited form factors and potentially limited supply may keep 2019 low.”

The analysts believe that packaging and regulatory red tape issues will be resolved and that will curtail illicit sales. However, that would mean that over 30% of the cannabis consumers buying in the black market would then shift to legal purchases within a year. That’s a big move in a short amount of time.

People cite waiting for the kinks of legalization to be ironed out as well as pricing as the biggest reasons they don’t turn to the legal market.


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The cannabis space is full of opportunities for bright young minds to bring innovation and a new way of thinking to an industry that is rather new and open to different perspectives. As such, Millennials have begun to make their mark within the cannabis industry, and their efforts are being recognized.

Here are three emerging and successful entrepreneurs who are making waves in the cannabis industry and modeling the way for both their successors and predecessors on how to make a serious impact in an emerging industry:

Karson Humiston, Founder & CEO, Vangst

Recruitment has become front and center with numerous platforms that aim to connect eager applicants with vacant opportunities within a growing and established companies. 

Karson Humiston, with a background in student travel after founding On Track Adventures, Karson has gone on to become the Founder & CEO of Vangst, the cannabis industry’s leading recruitment and hiring platform.

Since launching in 2016, through Direct Hire & Vangst GIGS, Vangst has connected more than 10,000 people with jobs at over 650 leading cannabis businesses around the US and Canada. 

Her accomplishments include raising $12.5M from leading tech and cannabis investors, including Lerer Hippeau and Casa Verde Capital. She was featured on the 2018 Forbes 30 under 30 lists.

Ryan Smith, Co-Founder & CEO, LeafLink

Companies that have aimed to streamline communications and operations processes within the cannabis industry have found great success. POS systems, inventory management systems, and internal/external communication systems are helping cannabis companies find efficiencies that in turn increase profit.

Ryan Smith is the co-founder & CEO of LeafLink, the cannabis industry’s wholesale marketplace. LeafLink connects thousands of cannabis brands and retailers and empowers them to streamline the ordering process, simplify communication, and spend less time on administrative work, so they can focus on growing their businesses.

Launched in Colorado in March 2016, LeafLink is now live in 20 territories across the United States and Canada. Under Smith’s leadership, LeafLink has raised $14 million in investor capital with the software helping cannabis retailers and brands to manage over $1B+ per year in orders.

Smith specializes in managing B2B firms and online marketplaces, successfully founding and exiting two companies, one of which he sold to an NYSE public firm. In 2016, he was the first CEO of a cannabis-facing company to be listed on Forbes’ 30 Under 30 list. In February 2018, LeafLink was the first company in the cannabis space to make Fast Company’s 2018 list of Top 10 Most Innovative Companies in Enterprise.

Aaron Riley, President & CEO @ CannaSafe

An important component of cannabis legalization has been product testing to ensure all that is sold to consumers are free of contaminants and pesticides while providing information on cannabinoid content for consumers.

With experience in the luxury car industry, Aaron Riley brings his business acumen to the cannabis industry in his role as President of CannaSafe, the first ISO accredited cannabis lab in the world. CannaSafe is a full-service testing lab offering a one-stop solution where cannabis cultivators and distributors can ensure they are in full compliance with all regulatory requirements and that their products are safe and effective for use.

Their 12,500 square foot lab facility, based in Los Angeles, CA, currently tests approx. 25% of all compliant batches in the state. The company has a second facility opening later this year. Riley obtained a Bachelor &  M.B.A. from Jacksonville University, earning his way through college on a football scholarship. Under Aaron’s leadership, CannaSafe recently won Testing Facility of the year award for California by Dope magazine.

Follow in their Footsteps

Opportunities abound for emerging professionals within the cannabis industry. Green Market Report featured cannabis companies that are accepting summer internships for young professionals to get their foot in the door and follow in the footsteps of these three professionals under 3 who are getting noticed within cannabis.

 


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