Here at the World Economic Forum in Davos, Switzerland, one sign that your international venture has reached a level of prominence is the appearance of a “house” bearing your name — a storefront to hang your hat, give away swag, and hold endless seminars while pumping champagne into would-be investors. There’s the Caspian Week digs, a storefront devoted to the economic interests of the Caspian Sea region, which one night featured female musicians apparently trying to re-create the 1986 Robert Palmer “Addicted to Love” video. My favorite was the Karnataka House, a one-stop shop for all things commerce in Southwestern India that had a mysterious sign in its window proclaiming “Pizzeria Still Open.”
A quieter place was the Cannabis House, the second annual incarnation of a spot devoted to explaining the holistic and capitalistic charms of weed. But this wasn’t a Coachella tent. I stopped by yesterday morning and found no bongs, but fresh croissants and well-appointed black couches where a group of young execs and dreadlocked visionaries were getting into, uh, well, the weeds of the international cannabis business.
Much was learned, particularly how the big money is not to be made by selling edibles to Beverly Hills housewives. It turns out hemp — a strong, fibrous plant that can be used in everything from rope to BMW dashboards to concrete — is the next new thing. Well, actually the next old thing. Hemp is a cousin of marijuana, a fast-growing crop that looks a whole lot like weed, but given its extremely low THC levels, will fail to get anyone high. It was present at the first American settlement in Jamestown, provided a stronger sail for early American merchant ships, and held 1880s Levi’s together. However, it fell into disuse when it was banned a century ago, along with all things marijuana in America. While hemp production was decriminalized as part of the 2018 Farm Bill, the United States is now playing catch-up. Hemp is the agricultural savior of small farms in places like the landlocked African republic of Lesotho, where much of the crop is crushed into an oil. This has the dual Davos benefit of profits for both investors and subsistence farmers. “They’re the cannabis kingdom now,” says Saul Kaye, founder of iCan, an Israeli cannabis firm.
A further bonus of hemp as a crop is it can be used for phytoremediation, meaning that it actually cleans heavy metals and other toxins from soil. It also doesn’t require much water on the arid plains of Africa. According to some cannabis insiders, 10 acres of hemp can generate as much profit as 40 acres of timber in a struggling land. The talk at the Cannabis House was how poor Lesotho, population 2 million, was set to lap America’s hemp possibilities all because of a long-ago stigma.
“They don’t have the struggle of over a hundred years of prohibition like we do in the States,” says David Traylor, senior managing director of Golden Eagle Partners, a cannabis investment firm. “They’re starting from scratch without the stigma.”
Yet Traylor says he thinks U.S. progress can’t be turned back — whether in hemp or marijuana — even under the Trump regime’s anti-pot policies. He points out the recent approval of medical marijuana in heavily religious states. “If you look at Utah and Oklahoma, that to me was the sea change in the U.S. because if you look at the church attendance per capita, Utah’s number one, Oklahoma’s number seven,” says Traylor. “When they went legal medically, that was just to me like, ‘holy shit.’”
But with such dreamy optimism comes corporate competitors. The investors talked of the liquor corporations, who they say are trying to play catch-up.
“They’re going to have an additive that they’re going to add to alcohol, which gets really interesting,” says Jonathan Sweetser, co-founder of CannGoods, a CBD wellness company, referring to a cannabis-based product he believes will soon be in production. “So maybe I’m out and my girlfriend doesn’t want to drink, but she still wants to have euphoria. They’re looking at that [developing a nonalcoholic beverage with a cannabis kick] and then also looking at recovery. I was having a conversation with liquor companies that are going, ‘I want to have a hangover cure.’ So I want to be both the disease and the cure.”
In addition, Sweetser says that consumer-packaged-goods brands — companies that make food, beverages, and beauty supplies, for example — are trying to put the breaks on the spread of legalized marijuana. “There is a universal slowdown to catch up by CPG brands. They were shocked and surprised at the rapid onset of consumer acceptance of this product, and they were completely unprepared. They have no pipeline created for this.”
While most of the media attention in the United States has been over the rush to legalize recreational marijuana, most of the folks at Cannabis House thought the global money to be made was in less sexy projects like hemp, and further exploring the plant’s medical and pharmaceutical benefits. The Cannabis House sponsored talks this year with researchers on how marijuana can be used to fight post-traumatic stress disorder. It has long been discussed among professional football players as a treatment for chronic pain that’s significantly less addictive than opioids.
“Medical marijuana is the global spearhead,” says Kaye. “You’ve got babies who are taking it for seizures. You’ve got big pharmaceutical companies now putting products into an FDA process. America is very isolated in cannabis. The rest of the world is going medical, and medical needs doctors to prescribe it, the pharmacists to dispense it. And the forms that you take won’t be joints. On one hand you can treat anorexia, on the other hand you could treat obesity, same plant.”
Many of the American entrepreneurs grumbled about medical research red tape back home that allows a country like Israel — where scientific research into the plant is not just allowed, but federally funded — to make the most progress in devising new medical uses for marijuana.
“Just look at the six things that are Schedule I drugs in the United States,” says Traylor. “Marijuana is Schedule I, and meth is Schedule II.”
Our time was winding down when I pointed out the inconvenient fact that many investors lost their shirt — be it hemp or cotton — on cannabis stocks in 2019. For all the happy talk, there are treacherous years ahead.
“This is not a special snowflake,” says Sweetser. “This is a business, it is an industry like any other. It’s going to go through the normal hype cycles; and the normal ebbs and flows. Come in with good due diligence.”
It was time for the investors to go. Outside, they piled into a waiting car and sped off to their next promotion/séance. Watching their taillights disappear out of sight, it was unclear whether Davos had gone weed or weed had gone Davos.