Why I left Cannabis for Hemp

The Beginning

I started in the cannabis industry just about 27 years ago. I really love cannabis! I started out as a guerrilla farmer, moved to indoor, then outdoor, then into greenhouses and then controlled greenhouses. I always liked growing in organic soil. That never changed. Just my preference, that’s all. I love working with the plant, and I believe it helps us to be better people, and teaches us things like how to nurture and be better farmers and human beings.

It has allowed me to explore a special level of personal freedom and entrepreneurial opportunity that I am extremely grateful for. Cannabis gave financial freedom to many families, like mine, who might not have otherwise had that freedom. Today, the newly legal cannabis industry is bringing in new investors and entrepreneurs in droves. Its the new “business to be in."

The End

I decide to drop out of the cannabis industry in the Fall of last year. After 27 years!

“But why?! Everyone else is just getting into it.”

Before we get to that I will cover a few key factors that drew me to the industry to begin with. These are aside from it’s reputation as a catalyst for independent thought and creativity, and the fact that it helped me quit prescription opiates after being injured in Iraq.

Factors

1. The demand was far greater than production.

2. Healthy profits were insured by risk, scarcity and price disparity.

3. Technical industry knowledge was King.

Today, money is king. Production is higher than ever. Demand is parked right next to it. Naturally, we have seen a significant price drop. Where the industry is going is still very exciting and of course there are solid profits to be made. My belief, though, is that the Green Rush is over. The exponential growth period has already happened, and this model will follow the models of other industries before it, like peppermint in the 1800’s, or Tickle Me Elmo. Boom and Bust cycles are a well known part of the agricultural business. These types of patterns are also fairly predictable by anyone who has flipped through a monthly investment periodical.

Combine this with the fact that the industry is just plain mainstream, and there is plenty of motivation to find a better market to utilize as space for an entreprenur to create, originate and improve. This is because there has been no real innovation in hemp for 81 years. In all the other industries that surround us, there is constant, yearly, innovation. Cannabis has seen incredible innovation in the last few years. The creative products coming out of the cannabis industry now were simply unimaginable 20 years ago.

99.999% of Hemp innovation is still ahead of us.

Explosion

An explosion is characterized by a vacuum, rapid expansion, pressure and a release of the corresponding forces. Cannabis has seen it’s release. The explosion has occurred. Now the dust must settle. Those left standing will hold significant pieces of the pie. The collateral damage will be significant. There will be few survivors. You will meet veterans of the cannabis industry everywhere. People who “used to grow." Farmers are already leaving en masse, which is what the industry needed to reduce supply levels, and restore prices. We'll see what happens when mass produced cannabis really hits the market, though.

In contrast, Hemp is at the very beginning of its bubble. It hasn’t reached its pressure stage yet because its still in the vacuum stage. Explosions typically suck in the oxygen they need to burn just before the signature “boom.” I know this from my time as a Marine. I have been danger-close to more explosions than I care to remember, and have seen this sucking phenomena with my own eyes and felt proceeding shock wave go through my body. We are very close to the Hemp Boom.

Spoiler Alert

In the state of Nevada this year, there will be just over 1,000 acres of hemp grown by somewhere around 80 farmers. In any county in California today, you can typically find between 5,000 and 15,000 cannabis farmers. This is an historical moment for hemp; a marker in history that opens such a very unique opportunity. It is dependent upon so many factors to manifest, that it really is a Perfect Storm of opportunity. It is like a stage play. "Hemp” is in the opening of the Second Act, and we can just now see the beginning of the plot.

Here’s the best part. We’ve realized by the closing of Act One that we've seen a version of this play before. It was called, "Cannabis.” Imagine being a cannabis farmer in California when there were only 80 farmers in the whole state! Imagine what could be done with that kind of head start and how one could leverage knowledge about how the industry will develop. This is the position we are in today.

Factors Part 2

1. The demand is far greater than production.

2. Healthy profits are insured by risk, scarcity and price disparity.

3. Technical knowledge is King.

There’s no secret strategies here. Its just plain business. The product is in huge demand, and there is a shortage of related products. Legalization is around the corner, which will open the door for innovation, product development, investment, exports, and more.

Bouyancy

Archimedes’ principle is about buoyancy. Not to get too deep into a physics lesson here but there is some discussion about displacement and weight and volume that we can relate to basic economic terms and principles. There is an economic principle called "bouyancy." This is Extreme Economic Bouyancy.

Hemp, as an industry, is like a foam block that has been held underwater for 81 years. We have calculated that the foam block, which is hemp, is quite large in relationship to the market in which it is submerged. It wants to be up there at the surface, and is pushing very hard to get to its rightful place up there, but is being artificially restrained. If you remove the ballast or restraint that has been holding the block down, in this case we’ll just call it “regulation,” we will find that the foam block will push its way to the surface with explosive force. That’s the force you’re looking for!

To leverage our resources with maximum results we want to utilize natural economic forces. The way that a sailboat uses the wind, or the way a surfer rides a wave. As entrepreneurs we move and invest in cooperation with these natural forces, and often, against the consensus. This is where we find the most success in the shortest amount of time. The undefeated Samurai, Miyomoto Musashi discusses this in his Book of Five Rings. Newton also discusses this in his Laws of Motion. Lao Tzu discusses sit in the Tao. Its basically remedial material.

Social Responsibility

We know that hemp can make thousands of products like clothing, houses and food, but it can also make cars, airplanes, batteries, and even superconductors that can replace graphene. Really! BMW and Mercedes already use hemp in its cars.

Millions of people are claiming it helps with debilitating conditions from pain to seizures, without making them high or addicted. Small children who would would otherwise spend a lifetime being poisoned by opiates and other toxics medications, are using it, as are the elderly. People claim it helps with sleep and anxiety. (These are not medical claims. The FDA will get me if I make any actual medical claims! I’m just conveying what the people are telling me.)

It can replace wood-based paper products, saving millions of trees. It can replace petroleum plastics and fuels, saving our air and oceans. Theses changes will help preserve our environment and every species of animal on the earth.

So here we are with the knowledge that we have discovered the beginning of an immense, socially and economically powerful bubble. What do we do now?

Act

Quite simply, act. Take some dang action already! Get involved. Read about it. Google it. Talk to people. Research. Invest. Cultivate it. Find a new way to use it. Figure out where you fit into history and take the action to make it happen. If you missed the DotCom Bubble, the Cannabis Bubble, the Peppermint Bubble or the Whale Oil Bubble, don’t worry! This is the bubble of your lifetime, and the time to act is now.

Here…in this present moment.

Philip Northcutt

CEO