Market Barriers in Colorado Hemp

Greetings Liberty Lovers,

I have been dealing with some challenges as of late and I feel that this is something worth sharing with everyone. I need to point out that the focus of this article is not on myself, but any entrepreneur who is trying to engage in the CBD hemp market here in Colorado like me. As with any market sector, there are lots of rules, regulations, licenses, fees, and of course taxes. You know, theft and forced edicts from the state behind the barrel of a gun. All that good stuff that most people see as modern “free trade.” The Cannabis market in Colorado is no different. Although Colorado is leading the way in recreational and medical Cannabis, it is also leading the way in national attention because of the taboo nature of Cannabis due to the last 80 some years of anti-Cannabis propaganda.

So you want to move to Colorado and sell THC? Think again. You are going to have to jump through a series of hoops and need a pretty substantial amount of capital to get started. The majority of which will be spent in licensing fees after you have been here for a certain amount of time. Have a felony for Cannabis possession? Whether said felony is in the state of Colorado or elsewhere, you can hang up your ambitions of getting a legal stamp from the state.

Now, Colorado decided to push the national envelope of perception when it choose to allow hemp cultivation as well. I personally chose to pass on trying to enter the MMJ (Medical Marijuana) market after A64 passed because I didn’t see much point of giving one third of my earnings to the state off the top as the fee for “being allowed” to do business (same reason corporations keep billions offshore). Once I learned that I was able to find a profitable path through hemp cultivation that had minimal capital requirements, I decided to move forward with a business partner. We chose to cultivate CBD rich hemp in hopes to process it into a viable product like many others have chosen to do. We researched the strains, made a selection, and proceeded forward with the best information we could find.

Flash forward one year. I’m sitting here with a reasonable amount of flower that I process into oil as I continue to make sales much like many other cultivators in the same position as me. After the flower is harvested and cured, it is tested (setting aside the fact we have done many batteries of testing already to stay in compliance with the cultivation regulations) If we chose to sell flower we can not do it without a lab analysis of the contents upon which will be the deciding factor of sales. This same concept applies to ANY product that we can produce that is intended for human consumption or even animal consumption whether it be flower or concentrate or other.  Imagine trying to buy a pill of any sort from someone who can’t tell you how many milligrams of what is in their product.

A bill was recently proposed for the labs, saying that they seek procedure standardization. The reason being for this is if I send a flower sample to the 17 licensed labs I’m going to get 17 different results. The variance will be reasonable between the samples with a potential percentage point leaning one way or the other but I would be lucky to get the same results twice, as would anyone else. Sounds like reasonable regulation right? Wrong. Here is the catch. If you cultivate hemp, even if you are in compliance with regulation (.3% THC or less) You still have a little bit of THC in there. All Cannabis does. This standard is set for hemp because there is not enough THC present to trigger the psychoactive effects in humans, hence the point of a differentiation between “Marijuana” and Hemp.

Now if you possess a product that contains trace THC, even .001% that was licensed and “lawfully” cultivated, you can no longer go to a lab and have your product tested. All the licensed producers of THC rich Cannabis have to submit their plants to tracking. The state tracks every “legal” commercial THC plant in the state from seed to sale. Last week I had to call every lab in the state as the one I went to conveniently closed. None of them will test hemp. Every single one of them told me I could only submit plants to them that were part of the state’s tracking system. Don’t believe me? Call them and find out for yourself. That list is here.

I’m very lucky. I have access to reputable testing that is legal which allows me to continue. Many people are not so lucky. Many people are sitting on hundreds of pounds of flower that they can do nothing with. Why won’t the labs just test? Surely they would love to see some profit for the very same service they already provide correct? As much as they would love that profit if they get caught they could lose their license and would themselves be out of business as well. The only solution any of the labs suggested to me was to see if I could work with some activists to see if I could get my plants involved in the state tracking system.

As much as the State would love that there was a reason I avoided the MMJ market to begin with. Namely being robbed of 1/3 of the income made from MMJ sales and ridiculously expensive licensing costs. (And Colorado isn’t even the worst) This creates a huge barrier of entry into the Cannabis market. One that is completely unnecessary. Nobody is against accurate lab testing standardization. It’s better for everyone. But trying to suck hemp cultivators into the medical market because government oversight and legislators didn’t predict CBD becoming a thing is not the hemp cultivators problem, or at least, it shouldn’t be.

Where does one go from here? Well, you could buy your own testing equipment. But it’s not cheap. And even if you did have the cash on hand you would have to learn how to use it correctly. Chances are unless you majored in a science background in college you don’t know much about organic chemistry. But let’s pretend you are a boss and organic chemistry is your shit. Then you have to deal with the conflict of interest that is present by not being able to say “tested by unaffiliated third party lab.” But at least you could bring a product to the market. Every instance here is another barrier for entry into the Cannabis market.

All of these barriers are created by regulation. The regulations in question here quite literally dictate what products make it to the market and which ones do not. But it is not entirely on the merit of their contents as most people would believe if they just read a Denver Post article. It’s 100% about who has access to the testing and who does not. And right now only people who are licensed on the MMJ side of the fence have access to the labs, and that’s it. I feel it worth noting that when you submit samples to the lab for testing that after the testing is complete you do not receive the samples back, they are destroyed. So why again should this be a regulated service that only select few have access to?

My question to every lab in Colorado is why do they need the state to agree on a uniform testing method? What is stopping them from calling one another and collaborating? Why use the state? This bill has already indirectly put people out of business. And those people aren’t all necessarily out of business because they are producing a poor product or even because they did anything incorrectly as the leaders of their businesses. They no longer have testing. They can’t tell you exactly what is in their product and it is not because they want to hide the contents of their products like other companies might. They want to know for themselves how well they did in creating their product and they take pride in their numbers.

Since I subscribe to Austrian economics, I will inform the world of a lucrative business opportunity for those who can afford the venture right here on Liberty Hangout. This will get nobody rich overnight, but it is already too popular to be stopped. If you are qualified to work in a lab and understand the use of a Gas Chromatograph and can test both solids and liquids there is much opportunity on the horizon. Dedicated entrepreneurs like myself refuse to take no for an answer and I’m not the only one. If you open a testing facility that deals exclusively in hemp testing and nothing else, and promote it decently, You will famously be the only “known” hemp testing facility in the state.