What Will 2019 Bring for the Cannabis Industry?
By: Christopher Nani
Exciting things happened in 2018. Hemp was federally legalized paving the wave for the future CBD industry to explode (it’s predicted to be over $22 billion by 2022), Michigan became the tenth state to permit adult-use, and the FDA approved the first cannabis based medicine (Epidiolox). With as many developments that occurred in 2018, what will the future bring for the cannabis industry? Below I divided possible events into three categories: ‘Likely’ meaning there is significant evidence supporting the proposition; ‘Possible’ meaning there are some indicators it could occur; and ‘Unlikely’ meaning while there is chance, there is not enough evidence to support its’ probability.
Georgia Goes Medical
The state commission tasked with studying medical cannabis unanimously approved drafting legislation to create a medical program. Georgia currently has a very limited medical program that does not allow cultivation, manufacturing, or dispensaries. The commission’s proposal would change that for Georgia’s 6,000+ registered medical cannabis patients by allowing them to purchase it within the state. Both Republican and Democrats in Georgia support developing a medical program. The proposal would allow 10 grow licenses, 10 manufacturing licenses, and a to-be-determined amount of dispensing licenses. The 2019 legislative session starts January 14th.
Illinois Passes Adult-Use Legislation
Governor-elect J.B. Pritzker is not shy about his position on cannabis. Part of his platform when running for governor was legalizing cannabis. Pritzker believes legalization will help reduce the opioid overdoses, help fix the criminal justice system, and wants to use the tax revenue from it to help the communities harmed by the War on Drugs. In a recent tweet, J.B. Prizker tweeted “Marijuana should be legalized in a safe way, and it’s time we do that in Illinois.” It isn’t just the future governor who is pushing for legalization, both state houses are controlled by democrats who also support legalization. Expect Illinois to be one of the first states in 2019 to pass adult-use legislation.
All Fifty States Pass Hemp-Derived CBD Regulations
The 2018 Farm Bill removed hemp from the definition of ‘marihuana’ allowing farmers to grow hemp nationally without worrying about raids or the DEA investigating their crops. The federal government has given their thumbs up to hemp leaving it up to each state to decide if they want to grow hemp. Hemp is important to state economies because hemp-derived CBD is a multi-billion-dollar industry. Currently, forty-six permit CBD with Idaho, Kansas, Nebraska, and South Dakota being the odd states out. Cannabidiol, or CBD, is expected to skyrocket in demand due to its multiple health benefits and it is likely every state will legalize CBD because of all the commerce it brings with it.
Cannabis Becomes Federally Legal
With the majority of the states already enacting their own medical and adult use laws, the federal government has noticed its laws and policies are outdated. Over thirty-five states and Puerto Rico have some form of state regulations for cannabis with the remainder states considering legalization. In 2015, Colorado collected $135 million in tax revenue – before cannabis had even grown to the popularity it is at now. In 2018, for the first eleven months, the state collected almost doubled the amount of taxes as it did in 2015 totaling to $245 million. With all of the possible tax revenue. Aside from the amount of revenue that could be collected, business owners want to operate in a legal industry without having to worry about going to jail for committing a federal crime. With all of the legislation currently being proposed to either deschedule (remove entirely from the CSA) and reschedule (to a lower schedule reducing regulatory oversight). The research is pouring on cannabis. The multitude of benefits cannabis provides both medicinally and to the states is at a breaking point the federal government will have to address soon.
Kentucky Overpasses Colorado as Leading Producer of Hemp
At the start of 2018, no one would have suspected Kentucky could overpass Colorado in hemp production. Colorado has roughly 400 licensed growers cultivating over 2.35 million square feet of hemp. Comparatively, Kentucky only has half the amount of licensed growers (209) and was only cultivating 3,200 of the 12,018 acres licensed for hemp. With the passage of the 2018 Farm Bill, the federal government legalized hemp allowing states to implement their own regulations. Kentucky has historically been an agricultural state and, with expected hemp shortages for the preceding years, Kentucky is primed to overtake Colorado and could potentially quadruple its production.
New Hampshire Battles for Adult-Use
New Hampshire passed its medical cannabis laws in 2013 but with resistance. Based on a state commission report that includes over fifty-four recommendations for implementing adult-use, the proposal is facing an uphill battle. Governor Chris Sununu has opposed prior legalization attempts along with the New Hampshire Association of Chiefs of Police. Yet, the bill has received partisan support from senior legislators which is a huge advantage to passing the bill. The bill will be introduced this month where it will be initially heard by State Representative Renny Cushing, the incoming chairman and proponent of legalization.
Indiana Goes Medical
Indiana Republican Representative Jim Lucus believes part of the battle of legalization involves debunking the “stigma and fear-mongering” of medical cannabis. Indiana is one of the few states that continues to lag behind as the rest of the nation progresses and develops their own cannabis regulations. One of the most notable obstacles is the Indiana Chamber of Commerce. Chamber President Kevin Brinegar opposes legislation in part because the FDA has not found cannabis has any valid medical purpose. He is also concerned legalization will reduce worker productivity. Yet, the research needed to determine the medicinal value and effects of cannabis are still being undergone with no definitive answer either way. Expect Indiana to start the process of legalization but with the current climate in the state not much else besides speculation and proposals.
There Will Be Enough Hemp for 2019
Dubbed “The Year of Hemp” by the Mail Tribune, hemp is going to be a top ten food additive, the source for CBD products, and the king of cash crop for the foreseeable future. Even with hemp cultivation doubling or tripling according to Colleen Keahey, President of the Hemp Industry Association, it is likely there will not be enough hemp for every industry looking to break into the new CBD market. Hemp farmers can make between $35,000 to $50,000 per acre and they understand a shortage can work in their favor. Depending on how fast states react to the Farm Bill, a hemp shortage could last for at least half a year. Hemp takes four months to grow and along with being certified before cultivating, farmers also have to process their product before it can be sold. A hemp shortage is inevitable but a good problem the hemp industry will overcome.