The cannabis industry is growing rapidly, but it’s still a small business. Corporations have been putting up some of the most promising deals to get in on this green rush and build an untapped market worth billions of dollars.
The “cbd stocks to watch” is a company that has been present in the cannabis industry for a while. They have seen some success and are now looking to expand into other industries, including the pharmaceutical market.
Market activists are ramping up their defense as more large corporate movers and shakers seem to be ratcheting up their invasions into the cannabis industry.
The Coalition for Cannabis Policy, Education, and Regulation was formed in March in the United States with the objective of achieving a federal regulatory framework for cannabis and includes representatives from the tobacco and alcohol industries. (For more information, go to Benzinga.com.)
The Drug Policy Alliance’s executive director, Kassandra Frederique, released a follow-up statement the same month:
“For a long time, we’ve been worried about major commercial interests entering the legal marijuana industry. Big Alcohol and Tobacco have a history of utilizing predatory techniques to market their goods and promote their brands, often targeting low-income communities of color and opposing public health measures that would protect people. It’s understandable, but despicable, that companies that have long tolerated the artificial divide between licit and illegal drugs now want to eliminate a type of prohibition to boost their profits.”
Ironically, the cannabis sector is in the midst of a major transition. The Cannabis Administration and Opportunity Act, which is currently being debated in Congress, demonstrates that the cannabis industry has achieved the status of a big business as a result of its accelerating sales and continued growth across the country, and it identifies certain restrictions that some interpret as concerning to any cannabis companies that have partnered with Big Alcohol and Big Tobacco. It’s still unclear how that will play out.
Is the cannabis sector on the verge of a major expansion? Or is the cannabis industry so large that Congress wants to impose further restrictions on how big it can grow and who it can collaborate with, thereby making cannabis a victim of its own success? Is the industry prepared to address these major issues? Should the resistance continue?
Take a closer look at the breadcrumbs:
1. The Tobacco Industry
Tobacco corporations continue to make steady and perhaps covert advances into cannabis, some with a biotech edge.
Philip Morris International funded $20 million in an Israeli medical start-up in 2016, which created a metered-dose vaporizer for medicinal usage that used raw plants (including cannabis).
Oxford Cannabinoid Technologies (OCT), a biopharmaceutical business focusing on studying, developing, and licensing cannabinoid-based medicines and therapeutics, received funding from Imperial Brands in 2018.
In 2018, Altria Group, the producer of Marlboro cigarettes, agreed to pay $1.8 billion for a 55 percent ownership in Cronos Group, a Canadian marijuana startup. In February 2021, Altria took a step further by advocating for marijuana sales regulation in Virginia.
The Virginia General Assembly enacted recreational legalization legislation in the same month, with an effective date of January 2024. The state pushed forward the timeline for recreational cannabis legalization by three years, to July 1, 2021, in April. Did Altria lobbyists have a role in that decision? Hmmm…
2. Large Amounts of Alcohol
This is one of the most well-established non-cannabis sectors that is swiftly moving to cannabis, partly to compensate for sagging sales.
In August of 2020, Molson Coors launched a line of five cannabis-infused beers, while several local craft brewers, like as Denver’s Ceria, are producing non-alcoholic THC-infused beer.
Canopy Growth and Constellation Brands, the manufacturers of Negra Modelo and other notable beer brands, are still working on their 2017 cannabis/big alcohol merger. Constellation Brands, for example, raised its interest in Canopy Growth Corporation in a $174 million acquisition in May 2020 via its subsidiary Greenstar Canada Investment.
Tilray TLRY-0.45 percent, a cannabis research, cultivation, production, and distribution company based in Toronto, partnered with Aphria, another Canadian cannabis company, in a $4 million deal in December 2020, which included Aphria’s November 2020 acquisition of Sweet Water Brewing Company, a cannabis lifestyle branded craft brewer.
By the way, beer is a natural cannabis complement since cannabis and hops are closely related Cannabaceae species with many interesting biological and phytochemical properties in common.
3. The Pharmaceutical Industry
Big Pharma has already entered the cannabis market. And they aren’t trying to hide their motives. This includes Johnson & Johnson JNJ+0.30 percent, which owns Avicanna AVCNF+19.3 percent, which is based at JLABS, the company’s medical and scientific incubator in Toronto. Avicanna is a pharmaceutical firm that develops cannabinoid-based medications.
According to a 2019 study, Abbie, previously Abbott Labs, a medical device and healthcare firm, applied for at least 59 cannabis-related patents in the United States.
Teva Pharmaceuticals TEVA+0.36 percent, via its subsidiary Salomon, Levin, Elstein (SLE), has announced that it would manage distribution of Canndoc’s products, a subsidiary of InterCure that specializes in medicinal marijuana. Former Israeli Prime Minister Ehud Barak is the CEO of InterCure.
Sativex, which is currently owned by Jazz Pharma, was marketed by Bayer. JAZZ+0.90 percent, also called as nabiximols in the United States, is a complex botanical composition that includes the main cannabinoids THC and CBD, as well as lesser cannabinoids and non-cannabinoid components. Another sign of the times that may be catching the attention of Big Pharma decision-makers occurred in December 2020, when the Commission on Narcotic Drugs (CND), the United Nations’ central drug policy-making body, voted to remove cannabis from Schedule IV of the 1961 Single Convention on Narcotic Drugs — where it had been listed alongside specific deadly, addictive opioids, including heroin, recognized as having little to no therapeutic purpose for 59 years.
According to press sources, the ruling might spur greater scientific investigation into the plant’s therapeutic benefits, thus providing the government more cover to reschedule cannabis (rather than deschedule it), allowing it to be used for medical research.
4. Major Investors
Berkshire Hathaway, led by Warren Buffet, engaged in cannabis in October 2019 as a consequence of Kraft Heinz, a fundamental Buffet business, investing $23 million in a cannabis technology firm via their venture capital arm.
Mondelez, Inc. is another Berkshire Hathaway holding.
CalPERS, the largest public pension fund in the United States with 2 million members and $392.5 billion in retirement funds, made investments in both Insys Therapeutics, a cannabis-focused biotech company, and Tilray, a major cannabis producer in Canada that recently acquired a craft beer company, in 2018. As of May 2018, CalPERS owns 1,617 shares in Tilray.
Banks are salivating at the prospect of receiving more cannabis investor funds and working with cannabis firms without fear of federal intervention. The company is getting into the cannabis industry. And bankers from all 50 states to push for a bipartisan banking solution that “addresses the realities of the present marketplace and allows banks to service cannabis-related firms in jurisdictions where the activity is allowed.”
5. Large-scale agriculture
Cannabis farms are often tiny businesses. However, larger organizations are making inroads, and they are increasingly becoming Big Ag operations.
For example, out of a total of 27 million acres of land under agricultural production in California, the entire footprint of the 6,000-plus approved cannabis farms is projected to be less than 2,000 acres.
Copperstate Farms in Arizona, with approximately 2 million square feet of greenhouse space, is the biggest cannabis farmer in North America, whereas Ultra Health in New Mexico, with 9.2 million square feet total but a $20 million expansion, is the largest cannabis grower both outdoors and in a greenhouse.
Traditional cannabis producers, particularly in California, are fighting back, claiming that Big Ag would extinguish the rural cannabis farmer. Cannabis gardening is becoming more popular, and big ag producers feel now is the moment to separate the amateurs from the experts, with some calling it “the next frontier of commercial agriculture.”
Monsanto is said to be creating a genetically engineered cannabis seed in order to dominate the market. Cronos Group CRON+1.18 percent, a Toronto-based global cannabis corporation, has teamed up with Ginkgo Bioworks to create cannabinoids in a lab—Ginkgo has built commercial partnerships with Big Ag companies including Archer-Daniels-Midland and Cargill, Inc.
Is there anybody else? Amazon, the country’s second biggest private employer, has stopped testing its workers for cannabis and is campaigning for legalization with its public policy team in the aim of becoming a major legal cannabis distributor.
In March 2018, American Cannabis Company, a marketer of cannabis-related auxiliary items, signed an agreement with WalMart and Home Depot to offer a cannabis-related soil product.
Colgate-Palmolive is expanding its cannabis business, however with CBD products in a more cautious manner.
We’ll have to wait and see. But there’s a snowball effect occurring right now as more players look at partnerships and product development, with the backing of huge businesses that have already done their due research on cannabis and come to the conclusion: they’re not on the fence anymore. (For more information, go to Benzinga.com.)