Convenience and cost are two factors that are always on the minds of older consumers no matter the product—including cannabis. One California company that calls itself the “Costco of cannabis” is addressing both of these issues by creating a membership system that allows members to save on products that are purchased on their website and delivered directly to the consumer.
In an article for TechCrunch, Lucas Matney reports consumers in California can purchase a variety of cannabis products from Flower Co.’s website. However, what the company really wants to do is turn customers into members. That’s because the company doesn’t make any money from product sales. It only profits by selling memberships. The cost of an annual membership is $119 and membership, as the add used to say, has its privileges
In addition to discounts of up to 40 percent when they purchase medical or recreational cannabis products, members get faster delivery and access to the company’s “private events and concert series.”
The products offered on the website come directly from farmers and manufacturers, eliminating any middlemen. Everything is packed to order and delivered on demand, which is thought to make for more efficient delivery routes.
Recently, a group of investors that included Slome Capital, Prehype, Rob Stavis, Adam Draper, Josh Abramson and Camille Hyde, showed their confidence in the concept by investing $2.8 million in the company.
Matney points out that even in California, where marijuana is legal, the unregulated black market still thrives due to high taxes on the regulated market which is thought to be just 1/4 the size of the illegal market. According to CEO Ted Lichtenberger, Flower Co.’s ultimate goal is to get those who purchase products in the black market to go legit thanks to the better deals and the conveniences offered by the company’s platform.
To learn more you can read Lucas Matney’s article in the July 22, 2019 issue of TechCrunch.com
Investor News and Notes
There has been a change in the cannabis industry and investors need to take note. So says CNBC’s investment guru James Cramer. According to Cramer, “As the weak hands exit the cannabis space, investors are starting to care about the actual results.”
Tyler Clifford, writing for CNBC’s “Mad Money,” notes that although Cramer calls himself a “big believer” in the industry in the long term, he contends that without the certainty of nationwide legalization here in the U.S., investors have to make decisions on cannabis stocks based on the numbers, not optimistic promises. And the actual numbers are complicated.
Clifford noted recreational use of marijuana is now legal in 11 states across the country and that Colorado said last month that it has already crossed the $1 billion mark in total cannabis-related revenue annually. Many investors in the cannabis sector are betting the U.S. federal government will drop marijuana from Schedule I of the Controlled Substances Act and the House Judiciary Committee did hold a hearing on decriminalizing the plant. However, Cramer told Clifford not to count on marijuana being legalized at the federal level, at least “not with this Congress.”
With that in mind, Cramer urged viewers of his show to be selective with their cannabis stock picks and to pay attention to how products of the underlying equity are selling. For example, even Canopy Growth, a Cramer favorite and one of the few he currently recommends, revealed its operating costs are growing faster than sales. He believes that contributed to the ouster of Bruce Linton as the company’s co-CEO.
More information is available in Tyler Clifford’s detailed article, “There has been a paradigm shift in the weed industry, Jim Cramer says” in the July 11 issue of CNBC’s “Mad Money.”
Cannabis, Insomnia and Pain Management
There is hopeful news for mature consumers who are interested in using marijuana to treat insomnia and or manage pain. A recent study has shown that cannabis may be an effective treatment option for both pain relief and insomnia, particularly for those who want to avoid prescription and over the counter pain and sleep medications.
Science Daily reports the study, published in the Journal of Psychoactive Drugs, looked at 1,000 people who use marijuana in parts of the U.S. where it is legal. Researchers found that of the 65 percent of people who reported they take cannabis to manage pain, 80 percent said it was very or extremely helpful. As a result, 82 percent of these people reported they were able to reduce, or stop taking over the counter pain medication.
In addition, 74 percent of the 1,000 individuals interviewed said they used it to help them sleep. Of that group, 84 percent said that marijuana had helped them, and over 83 percent said that they had since reduced or stopped taking over-the-counter or prescription sleep aids.
The researchers caution that more research needs to be done to understand the potential therapeutic benefits of cannabis. “Approximately 20 percent of American adults suffer from chronic pain, and one in three adults do not get enough sleep,” says Dr Gwen Wurm, Assistant Professor of Clinical Pediatrics at the University of Miami Miller School of Medicine.
Said Wurm,”In states where adult use of cannabis is legal, our research suggests that many individuals bypass the medical cannabis route (which requires registering with the state) and are instead opting for the privacy of a legal adult use dispensary.”
According to Wurm, nonsteroidal anti-inflammatory drugs (NSAIDs) such as ibuprofen cause GI bleeding or kidney damage with chronic use. Paracetamol (Acetaminophen) toxicity is the second most common cause of liver transplantation worldwide, and is responsible for 56,000 ER visits, 2,600 hospitalizations, and 500 deaths per year in the U.S.”
“The challenge,” said Wurm, “is that health providers are far behind in knowing which cannabis products work and which do not. Until there is more research into which cannabis products work for which symptoms, patients will do their own ‘trial and error’ experiments, getting advice from friends, social media and dispensary employees.”
You can learn more by reading “Could marijuana be an effective pain alternative to prescription medications?” by the Taylor & Francis Group. It appears in the July 1, 2019 issue of Science Daily.
CBD Products and Tennis
Recently, several professional golfers, including Scott McCarron and Bubba Watson, started to promote what they see as the benefits of using CBD products for treating pain and speeding recovery time. Now it appears tennis players may become the next group of athletes to endorse the use of CBD. Pro tennis player John Isner has announced a partnership with DEFY—a beverage described as the first CBD-based performance drink. This marks the first CBD-based partnership in professional tennis.
Isner—currently ranked 15th in the world—is known for a strong serve and an intimidating physical presence on the court. As with every professional athlete, recovery after a match or practise is an important part of Isner’s routine. He believes the beverage aids both his recovery after a workout and his performance on the court.
DEFY—co-created by Pro Football Hall of Famer Terrell Davis (TD)—is described as the world’s first mainstream hemp extract performance beverage built specifically for athletes. The company claims it’s designed to aid in rapid muscle fiber recovery and clear-headed, hyper-focused training.
According to Thomas Barrabi, who covered the story for FOXBusiness, the drink is said to contain 20 milligrams of CBD per bottle. Barrabi noted that Isner’s deal with DEFY is one of several recent endorsements of CBD products by professional sports leagues, including IndyCar which unveiled its first CBD-related sponsorship deals in May, and BIG3, the 3-on-3 professional basketball league founded by musician and actor Ice Cube. In April the league named CBDMD its official CBD partner.
What’s not clear at this point is how the company intends to address the Food and Drug Administration’s increased interest in regulating food and beverages that contain CBD and promote the ingredient’s health benefits.
To learn more, visit Barrabi’s story in the July 23, 2019 issue of FOXBusiness.com
CBD and Regulation
A leading manufacturer of CBD products is learning a costly lesson about making claims you can’t verify. According to Jacqueline Howard reporting for CNN, the US Food and Drug Administration has issued a warning letter to Curaleaf for selling some unapproved cannabidiol products with “unsubstantiated” health claims that the products treat cancer and Parkinson’s disease, among other health conditions.
Curaleaf is considered to be a leading company in a turbulent industry that many market analysts expect to be valued at between $15 billion and $20 billion in the next five to six years.
After the FDA letter, shares of Curaleaf Holdings Inc. dropped more than seven percent and dragged the broader sector lower according to Ciarra Linnane, writing in the July 24, 2019 issue of MarketWatch. Linnane noted that Curraleaf and drugstore giant CVS announced a partnership in March that resulted in the sale of a line of CBD products at the drugstore chain. After the FDA letter, CVS said in a tweet that it will remove the Curaleaf products named by the FDA from its stores. “As such, the only Curaleaf products we are selling are its CBD lotion and CBD transdermal patches,” said the company.
Howard reported that the FDA letter indicated that Curaleaf has 15 working days to respond with details on how the company has corrected violations or state why the company believes its products are not in violation. Failure to correct the violations could result in legal action which could include the seizure or ban of a product.
You can learn more by reading Jacqueline Howard’s article, “FDA issues warning to CBD company for ‘unsubstantiated’ health claims,” in the July 23, 2019 issue of CNN.com and Ciara Linnane’s article, “Curaleaf shares tumble 8% after FDA sends warning letter over CBD health claims,” in the July 24, 2019 issue of Marketwatch.com.
Senior Cannabis Digest is compiled and edited by Joe Kohut and John Kohut. You can reach them at seniorcannabisdigest@gmail.com or by calling 347-528-8753