Welcome to Senior Cannabis Digest. This week we take a look at the effect legal cannabis has on the demand for opioids, the seasonal demand for topical and edible products, how some cannabis investors are profiting by “betting on the barn instead of the horse” and more. Enjoy.
A Modest Correction
Some of you may remember that last week we reported that a company called Lantern had announced plans to be the first on-demand cannabis delivery service to offer recreational delivery in Colorado.
Well, as the saying goes, “there is many a slip between the cup and the lip.” As it turns out that first delivery contract actually went to a company with the appropriate name of High Country Supply, although it will do business in Aurora under the name of Colorado Harvest Co.
According to an article that appeared in the February 11, 2021 edition of Marijuana Business Daily, Colorado Harvest, which is located in the Denver suburb of Aurora, said it hopes to start delivery services by March 1, pending city approval.
To learn more, you can click on the link that follows.
mjbizdaily.com/colorado-awards-first-adult-use-cannabis-delivery-license/?
Cannabis and Opioid Use
Another study has found evidence that legal access to cannabis may help to reduce the demand of opioids and other addictive painkillers. In this case the researchers followed the classic investigative maxim: “follow the money.”
The study, which carries the scintillating title, “Opioid Prescribing in Canada following the Legalization of Cannabis: A Clinical and Economic Time-Series Analysis,” appeared in the journal Applied Health Economics and Health Policy . Researchers wanted to examine the amount of opioids prescribed and the money spent on opioids before and after the legalization of cannabis in Canada.
The investigators looked at requests for painkillers, both opioids and opioid equivalents, and the money spent on them through both public and private health plans from January 2016 to June 2019.
The study found both a significant reduction in requests for opioids as well a severe decrease in the amount spent on such drugs during that period, from an average of $267,000 (Canadian) spent each month on opioids to an average of $95,000 (Canadian) spent per month.
Finally, the researchers said they believe their findings support the hypothesis that easier access to cannabis for treating pain may reduce opioid use for both public and private drug plans.
To learn more, you can visit an abstract of the study by clicking on the link below.
link.springer.com/article/10.1007%2Fs40258-000638-421-
Stats of the Week
Just as that song Pete Seeger stole from the Book of Ecclesiastes says, there is a time for everything. You know, a time to be born and a time to die, only in the cannabis industry it’s about knowing when it’s the time for topicals and edibles—and that time is Valentines Day.
This week’s magic number is 21 percent. According to the research firm Headset, that’s how much sales of topicals increased between February 12 and February 14 in 2020. Completing the trifecta of cannabis enhanced romance, edibles sales were up nearly 13 percent and beverages 12 percent during that same period.
To learn more about how the cannabis industry is beginning to respond to seasonal sales trends, you can read Omar Sacirbey’s insightful article in the February 12, 2021 issue of Marijuana Business Daily.
mjbizdaily.com/cannabis-topicals-make-big-gains-around-valentines-day-as-do-beverages-edibles/?
Cannabis Quote of the Week
“My Republican colleagues are trying to reconcile some of the views that they’ve long had, which is ‘oh, we don’t think we can support these efforts,’ with the fact that their voters are way out in front of them. Their voters are saying, ‘look, we’re voting for this. Come around, it’s time to change.’”—Senate Finance Committee Chairman Ron Wyden (D-OR).
When asked what he expects the economic impact of legalization to look like, Wyden told Kyle Jaeger, reporting for Marijuana Moment,“I always think that when you can legalize something like this, where millions and millions of Americans have already voted that way, that can be a real plus for the economy—certainly it could be a real plus for small businesses, for communities of color, and that’s how we’re looking at it. ”
To learn more, we encourage you to read Kyle Jaeger’s article in the February 9, 2021 edition of Marijuana Moment.
Investor News and Notes
Ask anyone who has invested in cannabis stocks and it’s likely they will tell you the same story. The cannabis markets are extremely turbulent and unpredictable. Except for those with very deep pockets and what can seem like infinite patience, cannabis stocks have been an investment where dreams and dollars go to die.
However, there are some who think that may be changing sooner rather than later. For example, Omar Sacirbey, writing for Marijuana Business Daily, points to six factors that he contends signal a more “bullish” investment environment.
Sacirbey points to the impact of state elections that have led to legalization of recreational cannabis as well as what some think will be a more cannabis friendly White House.
He also thinks the performance of dispensaries during the pandemic has confirmed the speculation that cannabis is a recession-resistant product much like alcohol or tobacco.
In addition, Sacirbey points to various signals that many cannabis companies are beginning to mature and are now engaging in sounder practices and have recruited more seasoned management staff. Add to that an increase in institutional investor interest and investment advisors who are familiar with the industry and an increase in available capital for cannabis investment and Sacirbey holds that the industry’s bear market may be ready to transform itself into a raging bull in 2021.
Another example that investment opportunities in the cannabis sector may be expanding is the fact that many investors are rethinking how to invest in the sector.
For instance, Peter Grant, writing for the Wall Street Journal, shows how instead of betting on the horse, some cannabis investors are betting on the barn. Or, more specifically, they are investing in cannabis-related properties.
In his recent article Grant describes how in the past year legalization efforts in four states have sparked a “land rush” in retail properties where cannabis can be grown or that can house a retail cannabis business. He reports that in states where cannabis is now legal, property owners “have been able to charge as much as three times market rates when selling or renting to businesses involved in the cultivation, distribution, processing or sale of cannabis, according to brokers, landlords and cannabis industry executives.”
Grant points to the story of the owner of one sought-after Arizona retail location who could have sold it for “a couple hundred thousand dollars” before the state’s recreational ballot measure was approved in November. After legalization the owner has already received an offer for $2 million.
According to Anthony Coniglio, chief executive of NewLake Capital Partners Inc., which owns 19 properties in eight states rented by cannabis businesses, for owners willing to lease to cannabis businesses, “it’s like holding the winning lottery ticket.”
To learn more we urge you to read Omar Sacirbey’s article in the January 4, 2021 issue of Marijuana Business Daily and Peter Grant’s article in the February 16, 2021 issue of the Wall Street Journal. The links for both are below.
Senior Cannabis Digest is compiled and edited by Joe Kohut and John Kohut. You can reach them at joe.kohut@gmail.com and at 347- 528-8753.
