CANNAINVESTOR Magazine October / November 2016 - Page 93

The cannabis industry has evolved at a relatively rapid pace over the past few years. This is particularly true in the states which have passed legislation and regulations favorable to this business. The majority of those states are located in the Western part of the U.S and include Alaska, Washington, Oregon, Colorado, Nevada, and the “800 pound gorilla” of the U.S. cannabis industry, California.

Because of the growth in this industry I am often approached by individuals who want to invest in a cannabis business. Almost always, their interest is in the area of owning a grow operation, a dispensary or a retail store.

While the cannabis industry certainly centers on the plant, there are a number of opportunities which are potentially more lucrative than growing and processing and certainly less of a financial challenge than owning a dispensary or retail facility.

The Cultivation of Cannabis

In states that have legalized both recreational and medical cannabis, cultivation is evolving into two distinct industries, growing for recreational purposes and growing for the medical purposes.

Growers of medical cannabis are increasingly focused on strains with cannabinoid profiles tied to providing benefits for specific medical conditions or disorders. Those strains include, Charlotte’s Web or ACDC, which have low levels of THC, and high levels of the non-psychoactive cannabinoid, CBD. Medicine derived from these plants has been used successfully for children suffering from forms of epilepsy, specifically, Dravet syndrome. The movement for cannabis legalization at the state-level has much to do with providing medical benefits to those children.

Recreational cannabis production has centered on producing plants that are high in the psychoactive cannabinoid THC. Many recreational cannabis growers compete for the Cannabis Cup awards, which recognizes the best cannabis strains. Many have THC levels that often exceed 30 percent. Colorado’s Chem Dawg and California’s Emperor Cookie Dough are two of those high-THC strains.

Cannabis Processing and Extraction

Proprietary products derived from cannabis are becoming an increasingly important part of the business in states that have legalized medical or recreational cannabis. They are often superseding the selling of flower because they have a higher profit margin.

In the state-licensed medical cannabis industry, concentrates and extracts are manufactured in various forms. These include tinctures, capsules, pills, vape pens, transdermal patches, lotions, and creams, all of which have numerous indicated medical benefits.

The recreational cannabis industry focuses on the production of concentrates, oils, waxes and shatter. These extracted cannabis products typically provide an immediate and intense “high” for the user.

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