The Marijuana Industry is Dead

Prince said the internet was dead in 2010, the marijauana industry is dead in 2022.

The Marijuana Industry is Dead, and Not for the Reasons You Think

You may remember in July of 2010 when Prince declared the “internet is dead”, and the world ridiculed him on social media and the internet. Fast forward to today, and no, Prince was not saying the internet was dead, he was looking at the beginning of apps and smartphones and realized everyone was going to be using apps as their medium of interaction with information on the internet, not necessarily a web browser.

The marijuana industry, still in its nascent stages without even full Federal legalization, is dead. If you read the headlines and follow the industry, you may be guessing what is coming next, since you hear it all the time.  Let’s just go over the standard thoughts you are having right now:

• 280E tax codes make almost 50% of cannabis businesses not profitable
• Industry saturation between the legal and illicit market to where wholesale and retail prices are dropping like a stone, forcing small brands and businesses to close shop.
• The “race to the bottom” theory that cannabis is a commodity, like kale, broccoli, and tomatoes, and commodity prices leave little room for high end brands and services
• Federal legalization will lead to massive lowering of the moats to enter a state market, shipping cannabis legally through the mail and UPS, hence the “Amazon’s of Weed” will spring up online.
• With full legalization, low-cost providers of cannabis like Colombia, Brazil, Mexico, whose’ climate, electrical costs, water costs, and labor costs will demolish more expensive grow countries like the US and Canada.
• All consumer surveys to date say consumers are only concerned with 3 factors in a cannabis buying decision, price, effect, and distance or time to get to said cannabis product.  Branding, packaging, colors, celebrity endorsement all don’t even rank with consumers at this stage of cannabis legalization.

Those points would all be correct and points we have brought up in numerous articles on Cannabis.net over the past 7 years. You would be correct to be very concerned about all the above-mentioned points, but you missed the most obvious one that is already happening right in front of you, and to that point, we at Cannabis.net, dropped the ball.

If you have ever seen the Brad Pitt zombie thriller, World War Z, you know what the 13th man theory is.  We have brought it up in a few articles and it goes something like this, if 12 people all agree on a decision or outcome, it is the 13th man’s job to object, no matter how foolish or stupid his point is, and investigate it.  In the movie, it was one person’s job to investigate the early report of zombies taking over parts of the world and pretend it was 100% true, so what should we do if this crazy story is true?

In the true sense of digging into the cannabis industry, we didn’t hold that theory true when the 2018 Farm Bill that legalized hemp was signed into law by then-President Trump. Hemp, and all the cannabinoids as rationed in the plant were made federally legal, is was just that the cannabinoid THC had to be less than 0.3% in the plant in order to be consider legal hemp.  Not enough THC to get anyone high, or for anyone to want to smoke it, right?

Then, a chemist decided to get out the Bunsen burner and see if he could start mixing the legal ingredients of hemp to create something like “the real deal THC”, out of the legal elements of the hemp plant.

The birth of Delta-8 THC then arrived.  Lab-derived Delta-8 THC when first released was “getting high, lite”. I would call it the Diet Coke to Coke, but after looking up that Diet Coke is the #2 selling soda behind Coke, it would be more like Delta-8 was the Diet Pepsi to Coke.  A soda, sweet, carbonated, tasted kind of like Coke, but not really.

At that point, the 13th man, Cannabis.net, moved on.  We tested around 7 to 10 Delta-8 THC products as vendors 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 made you 75% high like real THC would do, you were floating, and feeling something, but not even close to the real thing, Coke.

We then moved on.  Delta-8 THC from hemp was a stich in time, a product that was sort-of-kind-of legal and got you “almost, kind of, high”.  It would only exist for a short time before full marijuana legalization, since once that happened, who would ever buy Diet Pepsi when you could get Coke everywhere, and for cheap.  It felt like a few opportunistic, get-rich-quick guys, making a quick push on a niche product that was sure to disappear as “real THC” legalization continued state-by state, were running a quick scam.

Boom!  We just got eaten by zombies.

What we failed to ask ourselves in true 13th man fashion was, what if the hemp guys threw enough money and lab PHDs at the problem and actually did it, they actually got the ingredients of the “hemp hot dog” right in the lab? What if they actually got all the legal parts of the hemp plant from the Farm Bill in 2018 to taste, feel, and have the same effect as the “real deal THC”? 

It would be amazing; it would solve legalization! 

What if you could get as high off of hemp as you could have on full THC marijuana, then the THC version of marijuana, which is still federally illetgal, would become obsolete over time.  You could then ship Delta-8 legally all around the country, teaching a generation of people what getting high on cannabis was all about and by the time the marijuana plant was legalized, no one would really care.

Why?

Delta-8 is from hemp, so it is cheaper to source, cheaper to manufacture, and in the end, it would be cheaper for consumers.  Hemp is legal, hemp can grow anywhere, hemp can be shipped. And to top it off, the a federal court panet just confirmed that basically, Delta-8 is legal as all the parts contained in the Delta-8 THC version are from a plant that was legalized in the 2018 Farm Bill.

If Delta-8 THC from hemp could create the exact same high, or even better, than the federally illegal marijuana plant, then you would have a game changer that could wipe out billions of dollars invested in the legal cannabis market.  Consumers could order online, product could be shipped, lower production costs would lead to a “new race to the bottom” only this time, we are talking fully legal hemp.

We gave up on Delta-8 THC from hemp too early, we never asked what would happen if they threw $500 million and 50 double-PHD chemists at the problem and locked them in a lab to figure it out.

It is the one obviously thing the industry overlooked, and it was right under their noses. If Delta-8 and Delta-9 THC were indiscernible, you literally could not tell the difference, you now had legal “weed” and it could ship and sell across all 50 states with no fear of prosecution or punishment.

Can’t be done, no way?

We thought the same.

Then we were invited to a private, NDA only tasting, which we declined several times, and only agreed as a favor to a business associate.  Delta-8 hemp souped up by serious chemist, PHDs, and lab nerds.

As soon as we tried this new product, we knew, “OMG, s#it” the hemp guys did it.

We never saw it coming, the report of zombies in North Korea had to be farce.

The marijuana industry, existing on an archaic moat based on THC being a schedule 1 drug on the CSA, is about to get rocked.

If in a blind taste and “experience” test, what if 100 out of 100 people could not tell the difference between Delta-8 THC from hemp and Delta-9 THC in the illegal marijuana plant?

Drinks, edibles, tinctures could all be indistinguishable between the Delta THCs. The only area where the currently illegal plant would rule would be straight up smokeable flower.  Since Delta-8 is made in a lab from “hemp parts”, there is no comparable smoking material that would mimic cannabis THC flower. Once you made hemp flower over 1% in some areas, considered hot hemp, the flower would then be considered illegal. 

While flower is still a very popular choice for cannabis consumers, how many people like to inhale and smoke, anything, period?  Smoking is outdated, edible sales and vaping are gaining traction as they are cheaper, more discreet, and deliver better results.  Will smoking weed ever disappear, of course not, but how often do you see people smoking cigars these days?

Oh, snap.

The marijuana industry is dead.

The hemp guys figured it out first.

Stay tuned for Part 2.

Source: https://cannabis.net/blog/opinion/the-marijuana-industry-is-dead