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Sunday, August 14, 2022

Impostors, lack of leadership, bureaucracy have put American hemp to the ground

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When it comes to Smackdown The US cannabis industry has suffered over the past three years, and most injuries have been self-inflicted.

As an assortment of get-rich-quick charlatans, self-proclaimed “leaders” and “experts” around CBD, the true potential of cannabis – in food, construction, biosynthetics, and other key sectors – has been lost to shuffle, worse From it: CBD bustle putting a stench on hemp set the industry back for years.

In the lead-up to the passage of the 2018 Farm Act and the months since, CBD products went viral, popping up everywhere from marijuana dispensaries to your local gas station store. Estimates at the end of 2019 showed that 13 million users contributed to a total market of nearly $4.5 billion overnight. CBD sales grew anywhere from 25-40% the following year.

But even this strong performance fell far short of expectations – a canary in the coal mine – for what was touted as a “breakthrough” product.

What is this smell?

Analysts’ predictions were rosy as stories of fortunes to be made in the CBD flowed endlessly. In the 2018 CBD Report, data provider Brightfield Group famous The market in the US will grow to $22 billion by 2022. It seems that those who sneered have been proven right because seeing products going to “big box” retail stores has turned out to be a mirage.

Sources: Brightfield Group; statista

In a report released last week, Brightfield’s latest numbers will keep CBD sales steady through 2021, at around $5 billion.

Further fanning the hype, over-the-counter (OTC) operators – this especially foul Public Company Form – Infusion unspeakable press releases glorify the next big thing in cannabis for unintentional investors.

When fan shit struck at the beginning of 2019, the first victims were the most important to the creation of the US cannabis industry: farmers, who not only fell in love with scam brokers – Grow for CBD and earn $50,000 per acre! seed? You will get it for free! – but also misconceptions about hemp as a crop: it is easy to grow, Anywhere!

Hard lessons

Some farmers learned hard lessons, losing crops to pests and bad weather, and plants that exceeded THC limits that had to be destroyed. Harvest costs and investments in equipment and technology were high. Some farmers delayed realizing that things like drying facilities were missing, meaning that unplanned investments were often required.

But the most brutal lesson was about supply and demand. Farmers who were able to bring in crops – after all, many of them – did as expected Demand did not materialize, with users increasing just 13% to 14.8 million in 2020.

With the spread of the covid-19 pandemic, it has been estimated that there are as many as 5,000 CBD companies on the market. About 90% of them are believed to have failed between 2019 and 2021.

Merge

While the major producers were scrambling, partnerships and mergers and acquisitions involving CBD makers and better-oriented marijuana companies intensified. Aurora bought Reliva, Canopy Growth and Martha Stewart combined, and Molson Coors joined with Hexo to form Truss CBD. There were others notable.

Meanwhile, farmers are left with subsidized biomass in their pens that are increasing in value by the day, and under the pressure of payments on huge capital investments.

The industry has also created a leadership gap that has been evident in the management of cannabis companies (again, mainly CBD), which are often rooted in the naive “cannabis will save the world” ethos but with little business acumen. Many also had little to no qualms, shredding celebrities for fake endorsements and pushing “miracle cure” ads for their products, which were often of questionable quality.

Get to know your bureaucrats

The atmosphere of the “Wild West” at the end Attracting the organizers’ attention But not in the way many had hoped. Instead of boosting the CBD industry by treating it with regulations, the US Food and Drug Administration (FDA) has begun cracking down on advertising claims and issuing warnings to producers.

In the CBD sector research for the bogeyman, the Food and Drug Administration sets an appropriate target. The fact is that the Food and Drug Administration has not done much to support the necessary research as a fundamental basis for the safety of CBD. But if stakeholders think the Food and Drug Administration will join them in their excitement for the next miracle product, they don’t know the agency, which is always moving at a snail’s pace in approving new foods and drugs.

Amid all the hype, the cannabis industry’s self-proclaimed “leaders” burst He reconstituted the inherited stakeholder organization Hemp Industries in 2020, leading to bad faith before moving on to engage in a series of petty claims That made the industry look ridiculous, in the words of one of the judges. Some states have abandoned domestic cannabis programs, leaving growers further afield, operating under the oversight of the federal government.

The CBD craze briefly highlighted cannabis. But the close look was ugly. In the end, it caused real and lasting damage. It remains for those who see the plant for its broader potential to pick up the pieces.

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