2019 is shaping up to be the year of cannabis. Fueled by the Farm Bill’s inclusion of industrial hemp, coupled with the fact that marijuana has been legalized in 10 states, Washington, D.C., and Canada, a new category of products is being created that are flooding the market.
Rep. Earl Blumenauer (D-Ore.) has even laid out a step-by-step process for making cannabis legal nationwide in 2019, and Natural Products Expo West, held last month in Anaheim, Calif., seemed to be the coming-out party for hundreds of new CBD products.
If you have any doubt of cannabis and CBD going mainstream, just look at Martha Stewart, who has teamed up with the world’s largest cannabis company, Canopy Growth Corp., taking on an advisory role to help develop a “broad new line” of products for both humans and animals. Stewart, who is 77, is an animal lover and also co-hosts a cooking show with rapper and well-known pot smoker Snoop Dogg.
But before you get too excited and clear your shelves for the influx of new cannabis products, there is a problem. Cannabis is not legal at the federal level under the Controlled Substances Act. What that means is that interstate commerce is denied, although CBD products can be shipped as long as they contain less than 0.3% THC.
Socrates Rosenfeld, co-founder of Jane Technologies with his brother Abraham, has created the industry’s first online marketplace—iheartjane.com—that he told me is the solution to the problem. He says he wants to be the “Amazon of cannabis.”
The web-based marketplace operates in 21 states and brings customers to more than 600 dispensaries that sell the product direct to consumer. Within some states, such as California, some of their partner dispensaries deliver to your door, while others have you pick up your order at their store. Rosenfeld said their top stores have a 2-to-1 ratio for delivery vs. in-store pickup.
A tour of the website found 2,725 products within 35 miles of my office. Since launching, it has processed hundreds of thousands of orders. Each product includes a description: In the case of cannabis flowers, it includes the purported effects and use; for edibles, it lists ingredients along with the quantity of CBD and THC. His business model is simple: He collects a flat fee of $1 per order. Sales, he says, are growing at the rate of 25% month over month. Being a privately held company, he would not offer up any additional revenue information.
The best sellers are edibles that are sweet (candy and ice cream in particular) and sales have grown industrywide by 50% in the past six months. His big prediction that grocery retailers should heed is that CBD-infused products will be the big winner. Preliminary clinical research shows the benefits of CBD on anxiety, cognition, movement disorders and pain. Jane Technologies data shows that people buying CBD products spend 50% more than a shopper buying cannabis flowers for THC, the main psychoactive compound in cannabis that delivers the “high” sensation.
Rosenfeld’s mission, as a former Apache helicopter pilot and graduate of the U.S. Military Academy, is “to bring legitimacy and access to medicinal cannabis and serve as an advocate for veterans’ right to choose a holistic approach to physical and emotional healing.”
It was during his time in graduate school earning his MBA at MIT’s Sloan School of Management that he caught the entrepreneurial bug, focused on his own personal growth and health—and discovered the medicinal benefits of cannabis.