Opinion | Global Cannabis Legalization: What The US Needs To Do To Prepare

By Kiran Sidhu, Founder of Halo Labs.

Sudden legalization introduced in late-2018 to make medicinal cannabis legal in Thailand, Israel, Mexico and South Korea will soon expose U.S. cannabis to the specter of globalization. To live up to the lofty expectations, suppliers must adopt three clear responsibilities: World-leading compliance, highly skilled jobs for scientists, and an acknowledgement that competition will make this young sector stronger.

The Changing World Cannabis Market

On December 25, as much of the world celebrated the holidays at home with family and friends, the volatile markets decimated the value of U.S. technology stocks. As CEO, of Halo Labs (an Oregon-based cannabis concentrate supplier), I watched with interest as the world’s map went green.

Thailand Legalizes Medicinal Marijuana

Somchai Sawangkarn, chairman of Thailand’s parliamentary drafting committee, announced that marijuana would be legalized for medicinal use and research in Thailand on Christmas Day — a searing victory in a nation where zero-tolerance has reigned supreme since the ratification of the 1979 Narcotics Act. Sawangkarn described the legalization as, “A New Year’s gift from the National Legislative Assembly to the government and the Thai people.”  Undoubtedly, very few were expecting one of South East Asia’s most punitive countries to legalize cannabis. The move sparked unforeseen disruption in the U.S. cannabis industry.

Asian Cannabis Dynamics Are Changing

Undoubtedly, the world map is changing as legalization sweeps the globe. Thailand’s unexpected announcement took many by surprise. In addition, legislation passed earlier in November by South Korea’s National Assembly to legalize cannabinoids for medicinal purposes has also shown a dramatic change in cannabis dynamics throughout.

Israel Becomes A Major Player In The World’s Marijuana Industry

Israel’s changing stance was just as revolutionary as Thailand and Korea. The Israelis’ declared that marijuana was officially legalized December 26 for medicinal use, cultivation, and export. Marijuana for Israel is no small commodity. The value of their cannabis exports will exceed 4 billion per year. The changes made U.S. suppliers nervous.

Mexico Set To Become The Fourth Country To Legalize Recreational Weed

On the heels of the global cannabis changes that took place in 2018, Mexico has also declared that it plans to follow in the footsteps of Uruguay and Canada by fully legalizing recreational and medicinal marijuana. Interior Minister Olga Sanchez Cordero has already proposed the groundbreaking legislation that will certainly be ratified by Parliament.

United States Cannabis Companies Fall Behind In The World 

US cannabis suppliers and companies have hoped that they would emerge as world leaders in the new and revolutionary industry. However, recreational, and medicinal marijuana remain illegal in many US states and all cannabis that contains tetrahydrocannabinol (THC) is still considered a Federal Schedule 1 drug. Sadly, legalization on a federal level remains a distant dream which seriously curtails US cannabis businesses from becoming leading players in the world cannabis field. The competition globally is set to become far more intense which will reduce profit margins and upset the balance.

Reaction To The World’s Cannabis Changes

Montague Reed, whose company GreenWave represents many of America’s wealthiest cannabis entrepreneurs, stated by email that “While some North American suppliers saw legal changes abroad as a Christmas gift. Most will not.” Reed asked that his views not be described or represented as those of his own clients, but stated by email that “U.S. companies without robust supply chains could become serious victims [of] the same factor[s] which dominate discourse in North American politics and the economy right now... trade wars, tariffs, quality control, safety, volatile markets, legislation and the question of globalization.” Like a small number of individuals within the U.S. cannabis industry, Reed is calling for the industry to react positively to these changes.

The Beginning of U.S. Based Halo Labs

I would like to think that I have become a respected voice for cannabis reform in the United States. My Halo Labs company’s beginnings are humble. My partner and I first started out using volatile extraction techniques to refine cannabis concentrates in a small Oregon chicken coup. However, as Oregon embraced medicinal marijuana reform and finally recreational marijuana legalization, my company grew rapidly.

Since April 2016, my company has sold 2.7 million grams of cannabis oil and concentrates. We are presently building two enormous facilities to serve Southern California. The first facility is approximately 1,600 square feet with approximately 500 square feet dedicated to volatile extraction in a C1D1 explosive-proof. This facility will produce winterized, decarboxylated and distilled butane hash oil — also known as ‘BHO.’ If you think this sounds scientific, then you’re right. It’s high science. We’ve got the money and the capability to hire some of North America’s brightest scientists.

Cannabis Companies Must Embrace Change to Survive 

In my view, the U.S. cannabis industry can beat the traditional hurdles posed by globalization and emerge stronger. He feels strongly that focus must remain on science and compliance. Furthermore, I believe that U.S. cannabis can prevail against global competition so long as the industry makes a genuine commitment to “science and compliance.” It is imperative that they must not only change due to shareholder demands but due to the worldwide marijuana revolution. The will to change must be adopted by the industry. Companies that do not show a desire ability to transform will not survive the upcoming conventional corporate landscape that is set to take over the industry.

World Cannabis Players Will Overtake The U.S Cannabis Market

Cannabis is set to become a valuable worldwide commodity that will be affected by globalization. US cannabis companies that believe they can stand apart and not be affected by low labor costs and the rise of major Asian, Mexican, and Israeli players are sadly mistaken. Undoubtedly, foreign companies will soon compete for cannabis markets right alongside American suppliers.

Federal Legalization a Necessity For Growth

Without federal legalization the U.S. cannabis industry cannot compete on the world stage. The American cannabis market remains seriously handicapped by the federal laws that maintain marijuana as an illegal substance. The growth potential of cannabis companies and their world reach are seriously impaired. North America must show the world that its suppliers can set a benchmark for corporate responsibility. Until marijuana is legalized on a federal level that day might never arrive before other big players take control of the field and leave the U.S. in the dust.

Profitability Of The Green Wave

The “green wave” of Christmas 2018 will certainly prove profitable for some. For this to be a sustained phenomenon, companies in North America must demonstrate that their industry is truly responsible — both in this continent, and beyond. In addition, federal legalization must occur alongside all the states cooperating to finally treat cannabis in the same fashion bestowed on alcohol and tobacco. Until that day dawns, American cannabis businesses cannot spread their wings and will continue to remain grounded with no global reach.

Kiran Sidhu, Founder of Halo Labs.

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