Friends, sharing today a recent article from the Washington Post style section about yuppies using cannabis again. Putting aside the author’s questionable choice to revive the term “yuppie”, this kind of style section article highlights the mainstreaming of cannabis in the US. I think that the article does a nice job of capturing the cognitive dissonance in the minds of people who grew up during the time when the term “yuppie” was actually used and were subjected to the Just Say No/DARE campaigns of that era.
It shows the challenge and the opportunity for the industry at this moment in time.
Speaking of challenge and opportunity, as you likely know, the Senate signed the 2018 Farm Bill, moving the industry one step closer to finally being able to sell hemp-based CBD fully legally.* It’ll certainly cause more work for us lawyers as companies move to split out their hemp CBD businesses, which then would be able to take advantage of such quotidian things as tax deductions and bank accounts, and then raise capital on those businesses. This is because, I suspect that, once CBD is legal, the floodgates will open and US-based CPG companies will start to put CBD in everything to capture market share, and traditional institutional capital will finally start to fund deals. This will put pressure on the smaller players, who will need to find ways to distinguish themselves into a more niche market, or else consolidate.
This isn’t different from other markets**, which is another way that this industry is (almost) like any other consumer product (which is a good thing). This process should provide a good test case for much of what’ll happen when Cannabis is legalized – how large CPG companies react, how the financial system reacts, how the regulatory agencies react, how plaintiffs’ lawyers filing consumer products claims react, how investors react.
*yes, I know that the CBD industry takes the position that CBD is already fully legal based on the existing Federal agency regulations. I won’t comment on that because, as the disclaimer says below, this email isn’t legal advice….
**as I’ve noted to many of you, every day, this industry looks like the wine industry to me
Written by Marc Hauser