This is your key to finding the most profitable CBD opportunities…
Hemp and marijuana.
Sativa and Indica.
Flower, extracts, and isolates.
Indoor, greenhouse, and outdoor cultivation.
Harvested or synthesized.
The rapidly emerging cannabis industry is fantastically complex.
And this complexity creates incredible opportunity as the roughly $15 billion in legal cannabis sales overtakes the $380 billion in total demand for marijuana.
With revenues for top companies growing at over 100% per year, making the most of this opportunity takes understanding that complexity.
Many cannabis startups intend to target the health and wellness consumer – an industry that now accounts for more than $4.2 trillion in annual spending.
A handful will go the pharmaceutical route with FDA-approved treatments and novel drug candidates that will ultimately get prescribed by doctors.
And some will focus on the cannabis connoisseur with craft-grown strains while others buy whatever they can for as cheap as possible to package into low-priced pre-rolls for the price-conscious consumer.
To identify those companies with the right strategies for their target markets takes getting familiar with the facts of cannabis.
The Eons-Long History of Hemp
About 28 million years ago, two species emerged within the hemp family – known as Cannabaceae. One gave rise to the cannabis and the other gave us hops.
Now, for all the beer fans out there, you know hops. It gives some ales the familiar sharp and chewy bitterness that many beer lovers crave.
Hops were originally added to beer as a preservative. A Benedictine nun discovered its value in beer-making in 1150. And when brewers in Britain needed to preserve beer for the long journey to India during the height of the British Empire, the hoppy India pale ale (IPA) was born.
But cannabis has been used by humans for far longer than hops. The earliest evidence points to its ceremonial use some 2,500 years ago in Central Asia. And since that time, humans have developed a mind-boggling array of cannabis strains, providing us with a wide range of effects and uses.
And the first thing to understand about cannabis is the distinction between marijuana and hemp.
The Fine Line Between Marijuana and Hemp
Marijuana and hemp both refer to cannabis plants, and the difference lies primarily in how the plant material is used.
One way to define hemp is the fiber and seeds of cannabis plants. Hemp is used to make ropes, textiles, food, insulation, and as an input to biofuels – among many other uses. I’ve been using hemp protein made from hemp seeds for well over a decade.
The typical source for this type of hemp is a special variety of cannabis often referred to as industrial hemp. It grows easily into tall and thin stalks that are harvested like any other row crop. The flowers serve little use in strains of cannabis used for industrial hemp, but it’s a cannabis plant, nonetheless.
Another way to define hemp is any cannabis plant with a THC content of no more than 0.3% (by dry weight). So, regardless of the strain, flower harvested from cannabis with no more than 0.3% THC in any part of the plant is considered hemp.
It is this definition of hemp that makes the soon-to-be $22 billion CBD industry legal at the federal level – an industry that could grow an unprecedented 3,622% over the next few years.
(You can learn how to claim your stake in the multibillion-dollar CBD revolution right here.)
So, marijuana can really be considered any cannabis product made from a plant with THC above that legally defined threshold.
Keep your cannabis plants below that 0.3% THC line, and your crop qualifies as hemp. That means you can sell hemp seed, hemp protein, hemp oil, hemp-derived CBD, fiber for textile, insulation, and a whole lot more.
Raise a crop with concentrations above that line, and you have marijuana.
You can see how this is an important line. A lot of innovation, expense, and effort goes into making sure a crop consistently falls below that line for CBD producers, including on-site testing, controlled growing conditions, and patented strains that consistently produce less THC.
An entire hemp crop could end up in the landfill should it fail to stay below that 0.3% line.
And understanding which cannabis companies are effective at maintaining that consistency is an important part of identifying those best positioned for success.
To find out how you could profit from the CBD industry’s remarkable growth today, click here.
Don Yocham, CFA
Executive Director, National Institute for Cannabis Investors
3 responses to “To Identify the Best CBD Opportunities, You Need to Understand This About Hemp”
July 01 2020