🌿 Delta-8 THC and your cannabinoid expert uncle

Good morning. Welcome to your Thursday edition of The Greenfields, a twice weekly newsletter that teaches you everything you need to know to about the cannabis industry.

What’s inside today?

• What is delta-8 THC and why is everyone talking about it?

• Bud-Matching platform

• Medibis delays building $180m facility, blames GPs and investors

What is delta-8 THC and why is everyone talking about it?

In what will probably come as a shock to your cannabinoid expert uncle, there are actually two types of THC:

• Delta-9 THC (the more commonly known THC found in marijuana), and

• Delta-8 THC (the THC found in hemp that you just heard about but your uncle is going to pretend he knows everything about).

Delta-9 and delta-8 both produce a ‘high’ feeling, but delta-8 not nearly as strong. We found one cannabis company in the US positioning Delta-8 products as being “between CBD and THC”, and users have described it as a nicer high.

Delta-8 has been in the news in the US recently because there have been reports of people getting sick from it. The FDA has recorded 104 adverse events and 55% of those required emergency medical services or hospitalisation. The US national poisons centre recorded 2362 cases of exposure to delta-8 and 70% of those required health care evaluation.

It’s hard to tell what percentage of total delta-8 users this makes up, but those numbers don’t make me want to race out and get some.

It’s naturally occurring in cannabis so aren’t you just being a fucking narc?

Well, that isn’t entirely true. Even though delta-8 does occur in hemp plants (that don’t have delta-9 THC), it occurs in tiny amounts. So manufacturers have to make it from another cannabinoid you would’ve heard your uncle banging on about: CBD.

Why go to all this trouble for something that isn’t even as strong as delta-9 THC? Because delta-8 THC exists in a bit of a legal grey area in the US. In the US, growing hemp is legal provided it doesn’t have THC. Except when they made hemp legal they defined THC as only being delta-9 THC, not delta-8.

It’s still not entirely clear if it is legal in the US and some states have specifically banned delta-8. Aside from the legalities there are also concerns about how CBD gets turned into delta-8. I’m not going to go into the details (because I’m worried some of you will head down to Bunnings and try this yourself) but creating delta-8 from CBD can involve some harmful chemicals that might leave traces that you then inhale. This can make you sick.

So even though delta-8 sounds great, there’s still a lot of work to do to regulate it to be safe. Australian regulators aren’t making the same mistakes as US regulators either. They’ve made it very clear delta-8 THC is not legal in Australia, so there isn’t an opportunity here for old mate with a hemp farm to start cashing in.

Bud-Matching platform

US company Jointly has launched a “bud-matching” app “Jointly Matches” for cannabis retailers to help match cannabis products to people’s needs.

People in the US are expecting a lot more out of their cannabis than to just laugh their ass off watching family guy and make college dinners edible. People are using it to treat specific medical conditions, be more creative, improve sleep or relieve stress. And cannabis retailers have to make sense of the patients goals and then match them to the product.

Jointly's business model is to sell the product to dispensaries in the US and position the product as a way to increase sales and engagement while reducing the overhead of training new staff in recommending products to customers.

What’s interesting about Jointly Matches is that it includes crowd-sourced feedback. The idea being that you get some social evidence of a products effectiveness and not just what the grower claims.

It's an interesting problem to solve. The cannabis industry is moving so rapidly in the US that it’s impossible to keep up with all the products. Eventually this is going to slow down though as brands become established and the different effects become more well known.

That doesn’t mean there isn’t an opportunity here for Jointly if they move fast enough. They’ve added a bit of complexity here by introducing crowd-sourced element, because to make that work you need to scale two sides of the platform, and that requires money.

Australia’s Honah Lee have a similar database, Catalyst, but the business model is simpler: they make money by allowing medicinal cannabis companies to advertise to doctors. Because Australian law prevents medicinal cannabis companies from advertising to patients, this is a lucrative opportunity to explore.

Medibis vaporizes dreams of $180m facility

Medibis has blamed GPs reluctance to prescribe medicinal cannabis for the delays in building a new $180m manufacturing facility. Medibis CEO Angus Chapel then said that if he had the investor money he’d pull the trigger and build the facility.

It sounds like Medibis wasn’t able to raise the money needed to build the facility. They have raised some money through crowdsourcing previously, but it’s hard to raise that sort of money crowdsourcing.

They haven’t launched a product yet, so it sounds like they were getting a bit ahead of themselves anyway, which Angus described as “having dodged a bullet”.

That’s your tour of The Greenfields today. We’ll see you again next Tuesday.

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