The Marijuana Industry Is Dead, And Not For The Reasons You Think
You may remember in July 2010 when Prince said “the internet is dead”, and the world ridiculed him on social media and the internet. Fast forward to today, and no, Prince wasn’t saying the internet was dead, he was looking at the beginning of apps and smartphones and realized that everyone was going to use apps as a means of interaction with information on the Internet, not necessarily an Internet browser.
The marijuana industry, still in its infancy without even full federal legalization, is dead. If you read the headlines and follow the industry, you might guess what’s next, since you hear it all the time. Let’s run through the standard thoughts you have right now:
280E tax codes make almost 50% of cannabis businesses unprofitable
Industry saturation between the legal and illicit market where wholesale and retail prices are dropping like a rock, forcing smaller brands and businesses to close up shop.
The “race to the bottom” theory that cannabis is a commodity, like kale, broccoli and tomatoes, and commodity prices leave little room for premium brands and services
Federal legalization will lead to a massive lowering of the moat to enter a state market, legally shipping cannabis by mail and UPS, from which “Amazon’s of Weed” will arise online.
With full legalization, low-cost cannabis suppliers like Colombia, Brazil, Mexico, whose climate, electricity costs, water costs and labor costs will demolish the countries more expensive cultures such as the United States and Canada.
All consumer surveys to date indicate that consumers are only concerned about 3 factors in a cannabis purchase decision, price, effect, and distance or time to travel to said cannabis product. Branding, packaging, colors, celebrity endorsements aren’t even among consumers at this stage of cannabis legalization.
These points would all be correct and the point we raised in many articles on Cannabis.net over the past 7 years. You would be right to be very concerned about all the points mentioned above, but you missed the most obvious one that is already happening right in front of you, and at that point we at Cannabis.net dropped the ball. .
If you’ve ever seen the Brad Pitt zombie thriller, World War Z, you know what the 13th man theory is. We’ve touched on this in a few articles and it goes something like this, if 12 people all agree on a decision or outcome, it’s the 13th man’s job to oppose, no matter how bad his argument is stupid or stupid, and to investigate it. In the movie, it was one person’s job to investigate early reports of zombies taking over parts of the world and claim it was 100% true, so what should we do if this crazy story is true?
In the real sense of digging into the cannabis industry, we didn’t hold this theory to be true when the The 2018 Farm Bill that legalized hemp was signed into law by then President Trump. Hemp, and all cannabinoids rationed in the factory were made federally legal, it’s just that the cannabinoid THC had to be below 0.3% in the factory to be considered legal hemp. Not enough THC to get anyone high, or to make anyone want to smoke it, right?
Then a chemist decided to break out the Bunsen burner and see if he could start mixing the legal hemp ingredients to create something like “the real THC”, from the legal elements of the hemp plant.
The birth of Delta-8 THC then arrived. The lab-derived Delta-8 THC, when first released, was “going high lite.” I would call it the Diet Coke to Coke, but after seeing that Diet Coke is the #1 selling soda behind Coke, it would be more like Delta-8 is the Diet Pepsi to Coke. A sweet, carbonated soda that tasted a bit like Coke, but not really.
At that point, the 13th man, Cannabis.net, moved on. We tested about 7-10 Delta-8 THC products because sellers sent us samples and wanted us to do reviews. Most didn’t do much, we got vape pens, gummies, tinctures and even candies. The best product we got got you 75% high like real THC would, you were floating and feeling something, but not even close to the real thing, Coke.
We then moved on. Hemp’s Delta-8 THC was a point in time, a product that was somehow legal and got you “almost, sort of, stoned”. It would only exist for a short time before full legalization of marijuana because once that happened who would buy a Diet Pepsi when you could get Coke anywhere and for cheap. It looked like a few opportunistic, get-rich-quick guys making a quick push on a niche product that was sure to go extinct as “real THC” legalization continued state by state.
Boom! We have just been eaten by zombies.
What we failed to ask ourselves in true 13th man fashion is that if the hemp guys threw enough money and lab doctors at the problem and actually did it, they got in fact the ingredients of the “hemp hot dog” directly in the laboratory? What if they actually got all of the legal hemp plant parts from the Farm Bill in 2018 to taste, smell, and have the same effect as “real THC”?
That would be great; that would solve the legalization!
What if you could get like rich in hemp like you might get with full THC marijuana, then the THC version of marijuana, which is still federally illegal, would become obsolete over time. You could then ship Delta-8 legally across the country, teaching a generation of people what cannabis was and by the time the marijuana plant was legalized, no one would really care.
Delta-8 is made from hemp, so it is cheaper to source, cheaper to manufacture, and ultimately would be cheaper for consumers. Hemp is legal, hemp can grow anywhere, hemp can be shipped. And to top it off, one Federal court panel just confirmed that basically Delta-8 is legal because all the parts contained in the Delta-8 THC version come from a plant that has been legalized in the 2018 Farm Bill.
If hemp’s Delta-8 THC could create the exact same high, or better, than the federally illegal marijuana plant, then you’d have a game changer that could wipe out billions of dollars invested in the legal cannabis market. Consumers could order online, products could be shipped, falling production costs would lead to a “new race to the bottom” only this time we are talking about fully legal hemp.
We gave up on hemp’s Delta-8 THC too soon, we never wondered what would happen if they threw $500 million and 50 double-PhD chemists on the problem and locked them in a lab to figure it out.
This is obviously the one thing the industry overlooked, and it was right under their noses. If Delta-8 and Delta-9 THC were indistinguishable, you literally couldn’t tell the difference, now you had legal “weed” and it could be shipped and sold in all 50 states without fear of prosecution or penalties.
It’s impossible, no way?
We thought the same.
Then we were invited to a private tasting, NES only, which we repeatedly declined and only accepted in favor of an associate. Hemp Delta-8 inflated by serious chemists, PhDs and lab nerds.
As soon as we tried this new product, we knew, “OMG, shit” the hemp guys did it.
We never saw it coming, the report of zombies in North Korea was supposed to be a joke.
The marijuana industry, which exists on an archaic moat based on THC being a CSA Schedule 1 drug, is about to be shaken.
If in a blind taste and “experiment” test, what if 100 out of 100 people couldn’t tell the difference between Delta-8 THC from hemp and Delta-9 THC from the plant? illegal marijuana?
Beverages, edibles, tinctures could all be indistinguishable between Delta THC. The one area where the currently illegal plant would reign supreme would be the smokable flower. Since Delta-8 is made in the lab from “hemp parts”, there is no comparable smoking material that would mimic THC cannabis flower. Once you flower hemp over 1% in certain areas, considered hot hemp, then the flower would be considered illegal.
While flower is still a very popular choice for cannabis users, how many people enjoy inhaling and smoking, anything, period? Smoking is outdated, sales of edibles and vaping are gaining traction as they are cheaper, more discreet and produce better results. Will smoking weed ever go away, of course not, but how often do you see people smoking cigars these days?
The marijuana industry is dead.
The hemp guys got it first.
Stay tuned for part 2.
WHAT IS DELTA-8, LEARN MORE…
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