The Looming Problem for the CBD Edibles Market

How has the initial growth of the weed market been?
Any cannabis with over 3% TCH is still considered marijuana and therefore illegal at the federal level due to its continued listing as a Schedule 1 Drug. This limits the ability of many CBD investors from expanding too heavily into the TCH and full CBD edibles world across the country. Investment opportunities have been limited to 11 states were cannabis is recreationally legal and hemp which can be grown legally in 47 states. In the states where all cannabis is recreationally legal, growth has been highly uneven and in most underperforming. This isn’t to say that the experiments have been a failure. On the contrary, most of the issues have been around the taxation and regulatory mess rather than the social acceptance. THC and CBD edibles is a proven multibillion dollar industry that has garnered Colorado companies at least $6.5 billion in revenue since the opening of the market in 2015.

The hurdle therefore isn’t whether or not to invest but how to handle the regulatory field. This is exceedingly significant when it comes to cannabis as a food ingredient and how it is regulated by the FDA and other state food inspection agencies. Currently the FDA doesn’t view cannabis as a food ingredient and therefore won’t be showing up on your grocery store shelf anytime soon. However, Colorado has allowed it to be included in food as an ingredient. So, if you travel to Denver you might find a few places to grab an infused grilled cheese or tater tots.

Investing in Cannabis

Is there any end in sight?
Yes, everything good must come to an end. As long as the industry retains the current regulatory scheme there will be a plateau. This isn’t a bad thing, it is just a market reality. Each new market that opens will allow new growth and investment. However, with limited product offerings the shelves may seem a little boring. The major hurdle to national acceptance is at the federal level. For full investment in THC and CBD edibles by TCH and CBD investors the federal government will have to 1) remove marijuana as a Schedule 1 Drug; and 2) the FDA will need to allow cannabis to be a food ingredient.

What are the major problems faced by the industry?
Here is a list of potential problems that all TCH and CBD investors in THC and CBD edibles will be facing in the years to come:

  • Unhelpful Regulations (limitations on growth or too open of growth lacks the nuanced market introduction controls necessary for a legal weed industry)
  • Lack of health standard (there are few industry health standards on productions and products have been shown to have heavy metals in them)
  • The taxes are too d** high (taxes can be upwards of 40+% in some areas effectively stopping the introduction of a stable legal weed market)
  • Cannabis is fat soluble (have food goods that are fat-free? It will be harder to infuse them with weed)
  • Does anyone know the shelf life of cannabis? (if you want it in the market how long should it sit around before it goes bad?)
  • How does the legal system deal with high driving? (Cops need a good test to see if you are high, not there yet.)