CannabisNewsWire
Editorial Coverage: After years of wrangling, the U.S. Congress
stands on the verge of legalizing the cultivation of industrial
hemp.
- Hemp is a variety of the cannabis sativa plant that doesn’t
generate a psychoactive effect.
- Traditionally used to produce cloth and rope, hemp can also now
be used in wellness products and food.
- Competing legislations by the House and Senate are being
aligned with an anticipated September 30 deadline.
- The legalization of hemp has cross-party support and appears
likely to pass.
The expected change in U.S. law will be beneficial for companies
such as Marijuana Company of America, Inc. (OTC: MCOA)
(MCOA
Profile), which is already invested in industrial hemp
and support for hemp growers. Across the border, Canopy
Growth Corp. (NYSE: CGC) has established acres of Canadian
hemp cultivation and gained financial backing that would support
huge growth. Aurora Cannabis, Inc. (OTCQX: ACBFF)
has also received substantial funding in the past few months, which
will help its ongoing expansion effort. Hemp cultivation will
provide plentiful CBD to be used by companies such as CV
Sciences, Inc. (OTC: CVSI) as an ingredient in a wide and
growing range of health and wellness products. All this growth is
aided by support companies such as Terra Tech Corp. (OTC:
TRTC), which provides equipment for cannabis
cultivators.
To view an infographic of this editorial, click here.
Hemp: Caught Between Politics and Business
Industrial hemp is a crop with a strange history in the United
States. For centuries, it was used to produce products such as
ropes and sails, playing an integral part in the economy. This
ended in the twentieth century when hemp was caught up in a broad
ban on the cannabis family of plants, despite the fact that hemp
itself is not usable as a recreational drug. Now its tentative
return depends upon the outcome of a far broader agricultural
bill.
Because it doesn’t share the psychoactive properties of
marijuana, hemp has potential to be regulated and grown separately.
Early tests in restoring this industry have produced significant
profits for farmers. If the political will can be found to change
its status, it could create great opportunities for businesses and
their suppliers.
Hemp Cultivation Project in the United
States
Several companies, including Marijuana
Company of America (OTC: MCOA), are already growing
hemp in the United States with their Scio, Oregon Cultivation
Project, in conjunction with their joint venture partner Global
Hemp Group Inc. (CSE: GHG) (OTC: GBHPF) (FRANKFURT: GHG).
Under their high-yielding CBD hemp cultivation projects, the two
joint venture partners have formed Covered Bridge Acres, LTD. The
key to the project was the acquisition of a 109-acre agricultural
property in Scio, Oregon, with a history of hemp cultivation over
the past few years. In July 2018, 40,000 hemp clones were planted
on the property for Cannabidiol (CBD) propagation on approximately
33 acres of the property.
MCOA and GHG are now in the process of evaluating different
harvesting, drying, storage and processing strategies in
preparation of an early October harvest. The joint venture partners
are also in negotiations with guaranteed offtake agreement offers
and are considering strategies involved with selling the attained
biomass from harvest in bulk.
When Is a Drug Not a Drug?
Hemp is one of a range of different cannabis plants. Unlike the
versions smoked by recreational users, it doesn’t contain
significant quantities of tetrahydrocannabinol (THC), the chemical
that gets smokers high. It does contain the active ingredient
cannabidiol (CBD), which has been widely reported to have medicinal
value — reports that now have been substantiated by
the U.S. Food and Drug Administration. Importantly, hemp also
contains fibers that can be used for a wide range of purposes.
In the twentieth century, cannabis plants were banned as the
U.S. government and others worldwide cracked down on drug use.
Though hemp doesn’t get drug users high, the governments apparently
banned the cannabis plant because of the difficulty of
distinguishing between the plant varieties. The decision to include
hemp in a list of banned drugs was based on political expediency
rather than science.
Fast forward to the twenty-first century and the rules surrounding hemp have started to change,
allowing the creation of companies such as MCOA. Hemp has a huge
number of potential uses, including the manufacture of cloth and
paper and the processing of food. Under licenses designed to cater
to research and the medical market, farmers have begun growing
industrial hemp with expectations of earning up to 150 times as much money per acre of land as they
would growing alfalfa.
The Great Agricultural Debate
Farm bills are an important part of how the U.S. government
establishes policy around food and agricultural production and how
that policy is enshrined in law. Roughly every five years, Congress
creates a bill covering a wide range of agricultural topics. With
its huge financial implications and many different political
angles, passing the bill can be a messy business.
Following a pilot research program for hemp growers created in
the 2014 Farm Bill, the current Farm
Bill includes the legalization of industrial hemp. There’s a
lot at stake for hemp growers as well as those hoping to enter and
establish a foothold in the industry. The U.S. Hemp Roundtable has
gone so far as to hire attorney Daniel Cameron, an experienced
Washington legal counsel, to lead its advocacy on
the bill.
The House and Senate have both passed versions of the 2018 Farm
Bill that support the legalization of the hemp industry without
drug enforcement oversight. On Sept. 5, the first bicameral
conference committee on this Farm Bill began meeting in an attempt to resolve competing
elements between the two bills, with a deadline to present the
president with an agreed-on final version of the bill by the end of
the month.
The good news for companies such as MCOA is that the hemp element of the Farm Bill has cross-party
support. Hemp’s potential to revive the fortunes of American
farmers makes it a potential vote-winner for rural politicians
nervously eyeing up the polls. The bad news is that in a bill
affecting everything from agricultural subsidies to environmental
conservation to food stamps, there’s plenty for politicians to
disagree over.
Hemp Products
Sail cloth and rigging were enough to make hemp profitable in
the eighteenth century, but the world has changed since then. So
what sort of products can the world expect to see from a resurgent
hemp market?
Many products will undoubtedly be targeted towards the health
and wellness market, using CBD as an active ingredient. A leading
example of these types of products is MCOA’s hempSMART line,
including hempSMART Brain, which is developed to help with
alertness and concentration; hempSMART Pain Capsules and Pain
Cream, formulated to be an effective product combination for the
temporary relief of minor pain associated with physical activity;
hempSMART Full Spectrum Drops; and hempSMART Face, a nourishing
facial moisturizer infused with Ayurvedic herbs and botancials.
A Growing Industry
Many companies already engaged in the cannabis market are
exploring ways they may be able to benefit from the growing
popularity of hemp. Canopy Growth Corp. (NYSE:
CGC), one of Canada’s foremost cannabis companies, has a
hemp division with expertise in this area and acres of hemp production already under way. The
company also recently received a $4 billion
investment from Constellation Brands, a leading beverage
company, to help it expand within the fast-growing cannabis market.
With such levels of investment, Canopy Growth will be in a strong
position to increase production as the market for hemp products
grows.
The medical use of CBD is a major area of interest for
Aurora Cannabis, Inc. (OTCQX: ACBFF), which is
developing different strains of cannabis to benefit from their
different medical properties. Like Canopy Growth, Aurora has an eye
to expansion while the market is still young. Its recent takeover of MedReleaf appears to be just one
step in a far bigger plan. The company has just taken out a $150
million loan with the Bank of Montreal, betting on the power of a
short-term financial boost to make it a market leader, more than
capable of repaying the debt when the time comes.
Another company exploring the medical potential of CBD is
CV Sciences, Inc. (OTC: CVSI). CV Sciences has a
strong focus on research, with a division devoted to developing new
drugs that use CBD as an active ingredient. Its consumer products
division works through health care providers, health food shops and
online sales to market CBD-based wellness products.
The increasing number of growers is good news for supporting
companies such as Terra Tech Corp. (OTC: TRTC).
Terra Tech produces growing systems — including moving tables and
hydroponics — for cannabis farmers. These products are designed to
increase the productivity of indoor cannabis cultivation, which is
where a lot of CBD and marijuana plants are grown. The company’s
environmentally friendly systems can reduce waste and thereby cut
costs while also increasing productivity.
The anticipated changes in the U.S. laws governing hemp
cultivation signal implications for a large number of companies in
the wider cannabis sector as well. If the Farm Bill gets through
Congress as expected this month, it could open up a sea change in
agricultural production and U.S. wellness industry products.
For more information on Marijuana Company of America, visit
Marijuana
Company of America, Inc. (OTC: MCOA)
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