Update your settings

There are many forces arrayed against the cannabis industry. It's time we acknowledge that this is a war. It shows up in a myriad of ways, including DEA, Schedule 1, 280e, overtaxation, social media banning, state oversight and compliance, etc and the list goes on. If you follow the money, you can see why: in legal states, opioid deaths are down, alcohol use is down, and surveys consistently show that young people are turning away from alcohol.

Here a few strategies that can help keep our industry strong, sustainable and profitable:

1. Vertical Integration - It’s a challenge, because your team must have expertise in cultivation, extraction, product development, manufacturing, packaging and retail. Difficult to do well, but the most profitable brands are controlling their supply chains all the way through.

2. 280e Workarounds - There’s been a lot of press on this lately. 280e is a barrier and I’m not an accountant or a lawyer, but there appear to be several strategies to deduct production costs - even in plant-touching areas of the business.

3. Focus on Medical - Our industry exists today because of the discovery of the endocannabinoid system. New research is constantly emerging that corroborates the importance of cannabinoids in treating a wide array of conditions. The focus on recreational weed is more about profit, but medical applications are the foundation of our industry we must not lose sight of. Germany is the best example I’m aware of for how to do it right.

4. State to State Cooperation - Why can’t neighboring states facilitate and encourage suppliers to “import and export” products between states? Sure the Feds prohibit interstate commerce, but they also prohibit THC.

5. Creative Marketing - Marketing compliance from state-to-state is a bear. Each state imposes it’s own stringent limitations on advertising. This is another area where states could potentially embrace a standard set of marketing regulations until descheduling happens. The elephant in the room is the outright hostility of Facebook and Instagram; and even LinkedIn has recently been banning people for #cannabis and related hashtags. Alternative platforms such as Leafwire provide a welcome alternative, along with ambassador/influencer campaigns where products can be promoted by third parties. This category is huge, and there are many creative options available.

6. “Coopetition” and Partnerships - This industry runs on partnerships. Leafwire partners with some of it’s competitors as well. Let’s find a way to work together and lift all boats!

7. Testing Shenanigans have to Stop - Here’s another elephant that has now spilled into the media with the Metrc lawsuit. This reflects badly on the entire industry. The testing sector must adopt standards, follow them, and quit double-dealing with MSOs.

8. Industrial Hemp - This is so big the elephant analogy falls short. It’s the “blue whale” in the room, and the original reason why the war on cannabis started in the first place. So far, the timber and chemical industries have been successful in preventing large-scale production of industrial hemp, but that won’t last forever. The market potential for industrial hemp is astronomical, and dwarfs the CBD/THC consumables market. The ultimate path for victory lies with large-scale processing and production of industrial hemp.

9. Stop the Infighting between Hemp & Cannabis - I’ve been struck by the strategy of politicians to pit the hemp and THC industries against each other. In Florida, Governor DeSantis openly backed the hemp faction in order to stop the recreational THC initiative. California and Texas are trying to ban hemp consumables completely, but for different reasons. Hemp and cannabis must cooperate! It’s not in our long-term interest to destroy each other.

Cannabis is a cause. It's about way more than just making money. There are those who are rooting for us to fail, and we have an opportunity to prove them wrong while transforming healthcare, the economy and the way people live in the process.

I hope this will be the beginning of a long and enduring conversation, because that's what it will take to ultimately win.

—---------------------

Mike Ballard is the CEO of Leafwire Media. Mike has been in the cannabis industry for 12 years, starting out as a rep and later Director of Sales for an organic fertilizer company. He started as a VP of Sales with Leafwire in 2021, building a new rep team and substantially increasing sales. As CEO, Mike is now executing on a plan to transform Leafwire’s business model to leverage and capitalize on rapidly changing industry market conditions.