Curt’s Cannabis Corner: “Branding Bud” Author David A. Paleschuck


CURT’S

CANNABIS

CORNER 

Branding Bud Author 

David A. Paleschuck

By Curt Robbins


 

Author David Paleschuck, a mainstream marketer who honed his craft working on mega brands like Pepsi, American Express and Microsoft has been involved in creating and marketing some of today’s leading cannabis brands (including DOPE). His new book, “Branding Bud: The Commercialization of Cannabis” is a must-read primer for any professional involved in product creation, branding, packaging, marketing or retailing.

This week on Curt’s Cannabis Corner, host Curt Robbins sat down with David Paleschuck (virtually), along with an international assemblage of marketing, branding and PR professionals ( Alana Armstrong, Alan Aldous, Toronto; Wesley Donohue, The 9th Block, Denver; Colleen Kibler, Maple Valley Pharms, Waterville, Maine; and David Rheins, MJNews, Seattle) to discuss the mainstreaming of marijuana, the emergence of grassroots canna brands, The 14 Cannabis Brand Archetypes and how Big Tobacco, Big Alcohol, Big Pharma and Big Retail are changing the dynamic marketplace.

With Altria, Amazon and Canopy Growth all in the news this week, the subject of the commercialization of cannabis could not be more topical.

Curt’s Cannabis Corner is a series of educational articles and podcasts from technical writer, author and educator Curt Robbins at Higher Learning LV and MJNews Network.  The collection is designed especially for cannabis and hemp industry professionals who wish to gain a better understanding of the nuanced biochemistry of this special—and newly legal—herb.

If you would like to be a guest on Curt’s Cannabis Corner, or have a suggestion for a CCC topic, please email us at: info@mjba.net

Turn On. Tune In. Catch the Buzz. Marijuana Channel One is a creation of MJBA Publishing LLC. Copyright @2021 All rights are reserved. For more information, contact us at: info@mjba.net #mjnews #MJChannelOne

 

Altria to Make Growth Investment in Cronos Group

Altria to Invest USD $1.8 Billion (CAD $2.4 Billion) for 45% Ownership Interest in Leading Global Cannabinoid Company with Warrant to Increase Ownership to 55% Over Next 4 Years

VIRGINIA: Altria Group, Inc. announced that it has entered into an agreement to acquire newly issued shares in Cronos Group Inc., a leading global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of CAD $16.25 per share, for an aggregate investment by Altria of approximately USD $1.8 billion.1

As part of the agreement, at closing, Altria will have the right to nominate four directors, including one independent director, to serve on Cronos Group’s Board of Directors, which will be expanded from five to seven directors. The agreement includes a warrant to acquire an additional ownership interest in Cronos Group at a price of CAD $19.00 per share exercisable over four years from the closing date. If exercised in full, the warrant would increase Altria’s ownership in Cronos Group by 10% to approximately 55%.

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential.”

“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Mike Gorenstein, Cronos Group’s Chairman, President and Chief Executive Officer. “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate Cronos Group in this area.”

This investment positions Altria to participate in the emerging global cannabis sector, which it believes is poised for rapid growth over the next decade. It also creates a new growth opportunity in an adjacent category that is complementary to Altria’s core tobacco businesses.

Altria expects its investment to help Cronos Group accelerate its growth strategies and its R&D and intellectual property development. Additionally, Altria will provide expertise to help Cronos Group thrive in the growing global cannabis market. These services may include regulatory affairs, regulatory science, compliance, government affairs and brand management.

About Cronos Group

Cronos Group is a globally diversified and vertically integrated cannabis company with a presence across five continents. Cronos Group operates two wholly-owned Canadian licensed producers: Peace Naturals Project Inc., which received the first non-incumbent medical cannabis license granted by Health Canada, and Original BC Ltd., which is based in the Okanagan Valley, British Columbia. Cronos Group operates a portfolio of brands which includes Peace Naturals, a global medicinal brand and two Canadian adult-use recreational brands, COVEand Spinach. Cronos Group has multiple international production and distribution platforms across five continents.

Cronos Group is establishing infrastructure to create an efficient global production footprint and a diversified global sales and distribution network. Cronos Group is focused on creating and monetizing disruptive intellectual property and growing a portfolio of iconic brands that resonate with consumers. Cronos Group is committed to building an industry-leading business that transforms the perception of cannabis and responsibly elevates the consumer experience.

Cronos Group has no U.S. operations, and cannabis remains illegal at the federal level. Through Cronos Group, Altria is better positioned should cannabis become federally permitted.

Transaction Structure

Under the terms of the agreement, at closing Altria will pay CAD $16.25 per share of Cronos Group stock issued in the transaction, or a 41.5% premium to the 10-day volume weighted average price of CAD $11.48 on the TSX as of November 30, the last unaffected trading day prior to when Cronos Group announced it was in preliminary discussions with Altria regarding a possible investment in Cronos Group. The transaction will result in an aggregate investment by Altria at closing equal to approximately USD $1.8 billion in cash (approximately CAD $2.4 billion).1Altria will receive shares representing a 45% interest in Cronos Group.

The agreement also includes a warrant to acquire additional ownership interest in Cronos Group at a price of CAD $19.00 per share exercisable over the next four years. If exercised in full, the warrant would increase Altria’s ownership in Cronos Group by 10% to 55%. The aggregate exercise price for the warrant is equal to approximately USD $1.0 billion (approximately CAD $1.4 billion),1 subject to customary adjustments.

The transaction is subject to customary closing conditions, including Cronos Group shareholder approval and receipt of regulatory approvals, which will be pursued promptly. The transaction is expected to close in the first half of 2019. At closing, Cronos Group will remain a Canadian publicly-traded company headquartered in Toronto, Canada and continue to be led by its existing management team.

A copy of the agreement containing the terms of the transaction will be filed with the Securities and Exchange Commission (SEC) and Canadian regulatory authorities.

Financing & Advisors

Altria has received committed financing totaling approximately CAD $2.4 billion from JPMorgan Chase Bank, N.A. Altria may consider seeking permanent financing in the future.

Perella Weinberg Partners LP is the financial advisor to Altria. Wachtell, Lipton, Rosen & Katz and Goodmans LLP are providing legal counsel to Altria for the deal. Hunton Andrews Kurth LLP is providing legal counsel to Altria regarding the financing.

Lazard Ltd. is the financial advisor to Cronos Group. Sullivan & Cromwell LLP and Blake, Cassels & Graydon, LLP are providing legal counsel to Cronos Group for the deal.

Is Marijuana A Better Alternative To Cigarettes?

Many smokers choose to make the switch from cigarettes to marijuana, whether it’s to simply give up smoking forever or to get more of a “buzz” from an inhalant. Marijuana and tobacco are both derived from naturally-occurring plants, but there’s a common misconception that “naturally-occurring” substances are always healthy. This simply isn’t the case.

Comparing marijuana and cigarettes requires some facts about both and their effects on the body, so you can choose for yourself. The answer to the question is a matter of personal preference, but you’ll find an in-depth comparison below for your consideration. If you’re a smoker, there are plenty of alternative products available aside from marijuana to get you off of cigarettes, including tobacco-less chew (Black Buffalo is a good start), CBD oils, and more.

Cigarette Facts

To get started, let’s look at some cigarette facts. Cigarettes are one of the most deadly and destructive products on the market to individual and public health and even the environment. Every year, the tobacco industry is responsible for millions of tons of litter, toxic waste, and thousands of deforested acres to make way for massive tobacco farms. This environmental damage affects wildlife, ecosystems, and perhaps more importantly, waterways.

You see, the tobacco industry is a fan of pesticides and fertilizers. After all, the crops can be worth billions of dollars in the final product form, so they must be protected and provide the highest yields possible. The problem with these chemical fertilizers and pesticides is that they’re loaded with dangerous and toxic chemicals, heavy metals, and other substances that offer a serious health hazard. And all of those nasty things end up in your cigarettes.

Cigarettes are said to contain anywhere from 3,000-7,000 chemicals, and at least 70 of those are known carcinogens (cancer-causing). Cigarettes have been linked to dozens of cancers and can cause serious damage to internal organs such as the heart and lungs. In fact, smoking makes you twice as likely to suffer a heart attack or stroke because of its effects on the heart and blood vessels.

When you inhale cigarette smoke, the chemicals affect the red blood cells; specifically, the hemoglobin. Your blood thickens, and those platelets have a much more difficult time carrying and delivering oxygen to important organs and tissues. Not to mention, your blood pressure spikes, which causes serious strain on cardiac muscles and the inner lining of blood vessels. The bottom line?  Every time you take a drag on a cigarette, you’re taking minutes off of your life. And that’s a fact.

Marijuana Facts

Marijuana is a strain of Cannabis that contains higher concentrations of THC, the psychoactive compound responsible for marijuana’s classic “high” sensation. Users report feelings of euphoria and heightened physical sensation, as well as serious impairment. Let’s look at some marijuana facts to properly compare it to cigarettes.

Marijuana does not contain the enormous number of chemicals that tobacco does. While it has found use in some medical applications to help manage things like pain and anxiety, the exact benefits of inhaling marijuana smoke are still being studied. What we do know is that it shows great promise in pain management and perhaps even managing conditions like depression.

That being said, there’s a common misconception that you can’t become addicted to marijuana. Let’s clarify. While you can become chemically addicted to nicotine, you likely won’t become chemically addicted to THC, but that doesn’t mean you won’t become dependent on it for everyday life. You can become dependent on just about anything that brings you joy.

Is It Better?

The question still remains whether marijuana is a “better” alternative to cigarettes. The short answer? No. The lungs are designed to inhale oxygen, and that’s the only thing that should be entering them. Foreign substances can be dangerous, and hot smoke from any inhaled plant matter can cause damage to important lung structures.

Not to mention, marijuana is still illegal at the federal level, despite being legalized in several states. That means you could potentially be prosecuted for possessing, growing, or using it.

Conclusion

Perhaps a better question to ask is, “what could I be doing instead of smoking?” Many of us suffer from a helpless addiction to a harmful vice, but even replacing that vice with something similar but “less harmful” can still be harmful in the end. Perhaps we should instead focus on art, literature, and other noble pursuits to better ourselves and spend our time more wisely. Vices, however minor they may seem, can lead us down a road we do not want to take. A more focused approach to our personal health will make us a happier, healthier society as a whole, which is something we definitely need during this pandemic. Don’t put yourself at risk for something that only damages your body!

Centers For Disease Control: Initial State Findings Point To Clinical Similarities In Illnesses Among People Who Use E-cigarettes Or “Vape”

No single product linked to all cases of lung disease

DISTRICT OF COLUMBIA: Initial findings from the investigation into serious lung illnesses associated with e-cigarette products point to clinical similarities among those affected. Patients report similar exposures, symptoms and clinical findings and these align with the CDC health advisory released last week. While many of the patients, but not all, reported recent use of THC-containing products, some reported using both THC- and nicotine-containing products. A smaller group reported using nicotine only.

No evidence of infectious diseases has been identified in these patients, therefore lung illnesses are likely associated with a chemical exposure. However, it is too early to pinpoint a single product or substance common to all cases, according to authors of articles published today in the CDC’s Morbidity and Mortality Weekly Report (MMWR) and the New England Journal of Medicine.

“We are committed to finding out what is making people sick,” said Robert R. Redfield, MD, director of the Centers for Disease Control and Prevention. “All available information is being carefully analyzed, and these initial findings are helping us narrow the focus of our investigation and get us closer to the answers needed to save lives.”

CDC, FDA, and state partners are combining information about e-cigarette exposures, results from FDA testing of product samples, and clinical testing results to identify a cause or causes of these illnesses.

“The FDA appreciates the continued collaboration between our federal and state public health partners to get to the bottom of these distressing incidents and gather more information about any products or substances used. We are leaving no stone unturned in following any potential leads and we’re committed to taking appropriate actions as the facts emerge,” said Acting FDA Commissioner Ned Sharpless, M.D. “Our laboratory is working closely with our federal and state partners to identify the products or substances that may be causing the illnesses and have received more than 120 samples from the states so far. The FDA is analyzing these for a broad range of chemicals but no one substance, including Vitamin E acetate, has been identified in all of the samples tested. Importantly, identifying any compounds present in the samples will be one piece of the puzzle but won’t necessarily answer questions about causality, which makes our ongoing work critical.”

CDC launched a multi-state investigation into the lung illnesses on August 1, 2019, and has worked closely since then with FDA, states and other public health partners, and clinicians to determine the cause. As of today, more than 25 states have reported possible cases of lung illnesses associated with use of e-cigarette products (e.g., devices, liquids, refill pods, and cartridges).

At least two deaths have been reported to CDC. Additional cases of lung illness are being investigated to determine whether they are linked to e-cigarette use and have similar clinical features. This includes looking back for older cases based on CDC’s case definition. States are in the process of classifying possible cases, and this information will be reported next week.

What CDC is doing

CDC has created an incident command structure to respond to these illnesses and is working with FDA and states to investigate whether the illnesses may be linked to specific devices, ingredients, or contaminants in the devices, or substances associated with e-cigarette product use. On August 30, 2019, states were asked to submit data to CDC about lung illnesses associated with e-cigarette product use, as well as information about the types of e-cigarette products used. CDC is currently receiving data from affected states and will share updates as more information becomes available.

What health care providers can do

CDC encourages clinicians to immediately report possible cases of e-cigarette-associated lung disease to their local or state health department for further investigation. If e-cigarette product use is suspected as a possible cause for a patient’s lung disease, a detailed history of the substances used, the sources, and the devices used should be obtained, as outlined in the HAN (Health Alert Network), and efforts should be made to determine if any remaining product, devices, and liquids are available for testing.

What the public can do

While this investigation is ongoing, people should consider not using e-cigarette products. People who do use e-cigarette products should monitor themselves for symptoms (e.g., cough, shortness of breath, chest pain, nausea, vomiting, abdominal pain, fever) and promptly seek medical attention for any health concerns. Regardless of the ongoing investigation, people who use e-cigarette products should not buy these products off the street and should not modify e-cigarette products or add any substances that are not intended by the manufacturer. E-cigarette products should never be used by youth, young adults, pregnant women, or adults who do not currently use tobacco products.

If you are concerned about your health after using an e-cigarette product, contact your health care provider, or you can also call your local poison control center at 1-800-222-1222. Health care providers also can contact their local poison control center.

CDC and FDA encourage the public to submit detailed reports of any unexpected health or product issues related to tobacco or e-cigarette products to the FDA via the online Safety Reporting Portalexternal icon.

The reports released today in CDC’s MMWR include “Severe Pulmonary Disease Associated with Electronic-Cigarette-Product Use – Interim Guidance” by CDC authors and “Notes from the Field: An outbreak of e-cigarette associated acute lipoid pneumonia — North Carolina, July–August, 2019,” from North Carolina cliniciansThe New England Journal of Medicine today released “Preliminary Report: Pulmonary disease associated with e-cigarette use, Illinois and Wisconsin,” with authors from the two states and CDC co-authors.

More information about the investigation is available on the CDC website.

Marketing Thru Marijuana: Differentiate or Die

This is the year that hippie cannabis dies. Woodstock is 50, and has just licensed its name to mega-retailer MedMen.  Hemp is newly de-scheduled and igniting the imaginations of farmers and investors excited about the global opportunity.  Pot Culture has become Pop Culture as legalization has spread coast-to-coast and pushed marijuana into the mainstream.

For grassroots marketers who have been playing in our fragmented American marketplace — where no two states share identical regulations or standards — things have gotten tough in the last year as legal competition from Big Pharma, Big Alcohol, Big Tobacco, Big Consumer Package Goods and Big Agriculture have transformed the playing field.

“As our nascent industry rockets from grassroots to global, it’s Differentiate or Die time for independent companies hoping to stay relevant in an increasingly noisy landscape.” MJBA Founder and veteran marketer David Rheins told MJNews Network.

“You must be able to stand out from the cacophony.  My advice for the licensed cannabis business and ancillary provider alike, is to focus on defining your brand differentiation.  Find a niche, fill a niche.  Your competition moving forward is Big Industry, which has the money, the technology and the wherewithal to take a product from field or factory to shelf better than the little guy ever will.”

His advice: Build your brand authority.  “Big Industry doesn’t understand emerging markets — who the consumer are, their buying preferences and psychographics,” Rheins said.  “As a small business, you are part of the community. You are making a market — defining the industry and your space in it.  No one understands its needs and attitudes of the new market better than the grassroots marketer.  Build your brand around your values, and the values of your customers and your community.   Establish brand loyalty and authority — with your vendors, and your customers, wether you are b2b or b2c — by lending value.”

Differentiate Or Die

Rheins suggests that the New Year is a good time for all marketers to do a brand review.  As an exercise, he encourages his clients to ask their investors, employees, vendors and customers to answer a couple of questions:

1) Describe our brand value  — what do we stand for — in one sentence.

2) What products/services do we offer.

3) What is our unique selling proposition (USP) — what do we do better than other brands?

“You’d be surprised how much intelligence you’ll gain just by analyzing these questions,” Rheins said.  “It only goes to reinforce that today marketing is not simply an exercise of spending money on paid advertising.  Advertising — particularly targeted placements — can be effective, but savvy marketers today depend on an integrated strategy that includes owned media (your company websites and newsletters) and earned media — social media engagement on public platforms with business communities and groups on Facebook, Twitter, Instagram, Reddit.

In this dynamic environment, Rheins advises businesses to stay engaged and stay fresh.

Take An Annual Brand Checkup

1) Do A Brand Review: How well do your customers understand your Brand Values and USP? How well do you understand your customer segments?

2) Website Audit: How fresh is your content? Are you SEO optimized? Are you using your website to gather customer feedback?

3) Social Media Audit: How visible is your brand on key social media platforms?  How often do you post content?  How quickly do you respond to queries or brand mentions? Who in your company is responsible for social media?

4) Community Check Up: How engaged is your brand in your community — not just your cannabis community but your local community?  Do you sponsor local events? Do you give to local charities? How well liked is your brand on Main Street?

 

 

Altria to Make Growth Investment In Cronos Group

Altria to Invest USD $1.8 Billion (CAD $2.4 Billion) for 45% Ownership Interest in Leading Global Cannabinoid Company with Warrant to Increase Ownership to 55% Over Next 4 Years

VIRGINIA: Altria Group today announced that it has entered into an agreement to acquire newly issued shares in Cronos Group, a leading global cannabinoid company, headquartered in Toronto, Canada. The transaction represents a 45% equity stake in Cronos Group, at a price of CAD $16.25 per share, for an aggregate investment by Altria of approximately USD $1.8 billion (approximately CAD $2.4 billion).

As part of the agreement, at closing, Altria will have the right to nominate four directors, including one independent director, to serve on Cronos Group’s Board of Directors, which will be expanded from five to seven directors. The agreement includes a warrant to acquire an additional ownership interest in Cronos Group at a price of CAD $19.00 per share exercisable over four years from the closing date. If exercised in full, the warrant would increase Altria’s ownership in Cronos Group by 10% to approximately 55%.

Cronos-no-icon

“Investing in Cronos Group as our exclusive partner in the emerging global cannabis category represents an exciting new growth opportunity for Altria,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “We believe that Cronos Group’s excellent management team has built capabilities necessary to compete globally, and we look forward to helping Cronos Group realize its significant growth potential.”

“Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth,” said Mike Gorenstein, Cronos Group’s Chairman, President and Chief Executive Officer. “The proceeds from Altria’s investment will enable us to more quickly expand our global infrastructure and distribution footprint, while also increasing investments in R&D and brands that resonate with our consumers. Importantly, Altria shares our vision of driving long-term value through innovation, and we look forward to continuing to differentiate Cronos Group in this area.”

This investment positions Altria to participate in the emerging global cannabis sector, which it believes is poised for rapid growth over the next decade. It also creates a new growth opportunity in an adjacent category that is complementary to Altria’s core tobacco businesses.

Altria expects its investment to help Cronos Group accelerate its growth strategies and its R&D and intellectual property development. Additionally, Altria will provide expertise to help Cronos Group thrive in the growing global cannabis market. These services may include regulatory affairs, regulatory science, compliance, government affairs and brand management.

The Wink In Weed: Why Seattle Hempfest Is Still Worth Supporting

By David Rheins

It’s been five years since Washington opened its legal cannabis marketplace, and today adult consumers in the Evergreen state have an abundance of high-quality, legal weed available in an impressive array of product configurations at affordable prices.

Seattle Hempfest, taking place this week along the gorgeous Puget Sound, is the nation’s oldest and largest “Protestival.”  It began as forum and platform for activists, patients and pot smokers to gather together to fight for their rights to toke in peace.  Back then, firing up a joint in public had real potential consequences — and could land you with a fine or even jail time.

My fellow Hempfest Volunteers in their Green T-Shirts

Hempfest Volunteers

Today, Washingtonians don’t have to go to the park to spark up. Pot smoking is legal, accepted and somewhat normalized in the Pacific Northwest. Leading some to ask what is the relevance of Seattle Hempfest?

While more of a party these days than a protestival, Seattle Hempfest is still a must-attend annual gathering of the cannabis tribes.  Our Green Revolution is a broad tent, with a diverse set of communities.  We are advocates, patients, farmers, business professionals, parents, teachers and caregivers, all united under the belief that Federal Prohibition, and the War on Drugs — and Drugs Users — must end. There is something powerful and undeniable about seeing a hundred thousand pot smokers gather together to celebrate community.

There is still much legal reform that needs to happen before cannabis consumption is fully normalized — and it is encouraging to see the momentum behind the STATES ACT and the Marijuana Justice Act as Congress has finally gotten the word that the American public — on both sides of the aisle — are through with prohibition.  The 2018 Farm Bill, with its Hemp Farming provision, will de-schedule industrial hemp and open the way for explosive growth in hemp-based products, including consumer goods, industrial materials, foods, fuels and medicines.

We are in a fight for the control of our legal cannabis industry.  Big Pharma, Big Alcohol, Big Tobacco, Big Agriculture and Big Government Regulators are all fighting to establish their places in our new mainstream marijuana marketplace. We must continue to stay involved now as the new regulations and standards of our emerging industry are crafted. I see Hempfest as a natural venue for showcasing the best and most innovative hemp products. Cannabis consumer rights need to be protected to ensure that the legal products are safe, tested and of the highest quality. Legal cannabis businesses have an opportunity to build an industry based on the highest standards of production, marketing and operations.  We need to be fair and equitable in our hiring and compensation practices, and we need to direct the windfall of new marijuana tax revenues towards improving the health and welfare of local communities, particularly those hit hard from the War On Drugs.

CurvedPapersHempfest512x440As our alternative culture takes centerstage, it is important that we stand together for our shared values.  We are witnessing and influencing the end of an era. The post-WWII, better living thru petrochemicals, conspicuous consumption society is unsustainable — and is quickly being replaced by a global, plant-based lifestyle, renewable energy zeitgeist.

MJBA is proud to once again participate as a media sponsor and exhibitor of Seattle Hempfest.  We’re thrilled to be sharing a booth with Curved Papers, with whom we’ve been touring the country on a Cannafest Destiny Tour.  We’ll be showing off our NORML 100% Hemp rolling papers, and showcasing our latest poster by Michael Guttsen, and doing social media blasts with MJBA Ambassador At Large Jake Dimmock.  Please join us at Booth #323 across from the Hemposium.

Michael O'Malley, David Hynes Michael O'Malley David Rheins

It has never been more important to stand up and be counted.  Please come out to Myrtle Edwards park this weekend, listen to the speakers, dance to the music and support the many food and merchandise vendors.  Be sure to drop a few bucks in the donation bucket:  Seattle Hempfest is an all-volunteer effort, and it depends on the support of its Vendors, Sponsors and Attendees to survive.

 

 

Big Business Starting To Look At Canada’s Newest Industry

UNITED KINGDOM: Twenty years ago, it was vilified as a ‘gateway drug’. Now, cannabis has grown into a big business, with the potential to become even bigger as laws are scheduled to change to reflect shifting social attitudes towards marijuana and investment picks up to take advantage of increased demand.

And make no mistake: the demand is huge. In the United States, the legal cannabis industry is worth $6.7 billion, according to Bloomberg.  Actively watching the industry include: Altria Group (NYSE: MO), Insys Therapeutics (NASDAQ: INSY), GW Pharmaceuticals (NASDAQ: GWPH), Teva Pharmaceuticals (NYSE: TEVA), MedReleaf Corp (OTC: MEDFF) (TSX: LEAF.TO)

In Canada alone, cannabis is estimated to reach an $8 billion market with 150,000 people using marijuana for medical purposes. Yet estimates indicate that number could increase dramatically after pot is legalized next year: by 2021 there could be 3.6 million legal users consuming 420,000 kilograms of pot.

With the legal cannabis industry still in its infancy, the potential for growth is huge. At the moment, legal growers supply only 31,000 kilograms of Canada’s weed, or 5 percent of anticipated total medical and recreational demand. To avoid bottlenecks and keep supply coming, Canada’s pot-growing business must take off, and fast. Dozens of underground producers, who have grown illegally for years, could start supplying existing demand within a few years, if they can obtain licenses and build infrastructure.

Cannabis is virtually unique: an emerging sector tainted for years by high-risk and regulatory uncertainty, it has yet to be penetrated by tier-one capital, as institutional investors have stayed away.

Investing in cannabis can be tricky. Publicly-traded companies are scarce, most are small-cap and penny stocks, and finding those with strong prospects for growth can be challenging. The amount invested globally into cannabis ventures remains relatively small, only $220 million in 2016. Yet that’s a significant increase from investment in 2013, which was a scant $13 million.

But the opportunities for smaller investors to get in the ground floor are significant, especially when you look at what some newer firms are bringing to the table and the likelihood that larger firms, particularly those in the tobacco trade, will get in on the action as well.

Here’s a look at some companies that are getting into the cannabis game:

Philip Morris

It makes sense for a major tobacco company to be interested in cannabis. Back in the 1960s, when social interest in marijuana began to grow, rumors circulated that Big Tobacco was buying up brand names for marijuana products while considering investments in cannabis production.

A crackdown on drug use and a pushback against marijuana quashed that attempt, but with the norms changing, a few of Big Tobacco’s most prominent members are re-evaluating their interest in cannabis.

A major reason is the declining sales of cigarettes. For the last several decades Big Tobacco have focused on emerging markets as smoking faded in the developed world. But marijuana represents a lucrative new market, one which is attracting new attention from the larger tobacco firms, albeit in a slow, hesitant fashion.

Medical Marijuana 101: Doctors, Regulators Brace For ‘Big Marijuana’

MASSACHUSETTS:  The argument that marijuana is poised to become Big, as in Big Tobacco, begins more than a hundred years ago, argues Dr. Sharon Levy, a pediatrician at Boston Children’s Hospital.

Changes in curing made tobacco easier to inhale, additives made it more addictive and machines began to churn out inexpensive, readily available cigarettes. With these “innovations” and lots of market savvy ads, tobacco use and addiction rose dramatically.

“Is there anything to prevent innovative products with marijuana that will do the exact same thing?” asked Levy, who runs the adolescent substance abuse program at Children’s.

Levy described her concerns about Big Marijuana in the New England Journal of Medicine last month. She acknowledges that marijuana is nowhere near as harmful as is tobacco and that marijuana has some health benefits. But Levy worries that marijuana addiction rates, now around 9 percent of users, could climb to those seen among tobacco users (32 percent) without strict controls on growers and manufacturers. Growers are already producing strains of marijuana with stronger and stronger concentrations of THC, the ingredient that makes people high. It’s also the ingredient that seems to trigger depression, anxiety and sometimes psychosis in Levy’s adolescent patients.

 

Big Tobacco Planned Big Marijuana Sales In The 1970s

Tobacco executives anticipated the legalization of marijuana as early as the 1970′s — and they wanted a piece of the action, according to newly discovered documents from tobacco company archives.

Public health researchers scanned 80 million pages of digitized company documents for keywords such as, “marijuana,” “cannabis,” “reefer,” “weed,” “spliffs,” and “blunts.” The results, published Tuesday in the Milbank Quarterly, reveal a long history of maneuvers toward marijuana-laced products.

“The starting point must be to learn how to produce in quantity cigarettes loaded uniformly with a known amount of either ground cannabis or dried and cut cannabis rag,” read one memorandum from British American Tobacco’s adviser on technical research, Charles Ellis.

A hand-written letter from Philip Morris president George Weissman read, “While I am opposed to its use, I recognize that it may be legalized in the near future…Thus, with these great auspices, we should be in a position to examine: 1. A potential competition, 2. A possible product, 3. At this time, cooperate with the government.”