Legal cannabis: who is behind this golden business?

“A cannabis supplement on your Margarita?” No, this server at The Village Terrazza, a restaurant in the 14th arrondissement of Paris, is not a marie-jeanne retailer. For 5 euros more, he simply offers us to sprinkle our pizza with flowers that contain cannabidiol, the legal molecule, but a bit sulfurous, which has been on top for a few months. The taste is a bit down to earth, the effects are not really there, but who cares? As it fails to make consumers soar, it is to its traders and its producers that this new green gold promises a nirvana of profits. And without risking a police raid.

But before we move on, let’s make the introductions. Cannabidiol (CBD abbreviated) is a substance derived from “Cannabis-sativa», A variety of hemp quite low in THC, the molecule with well-known psychotropic effects. It therefore has no hallucinogenic effect. Like its cousin hash, it is obtained in the form of oil or resin through an industrial extraction process.

Although no serious scientific study has ever confirmed any of this, it is believed to have amazing therapeutic properties: CBD has anti-inflammatory, analgesic and anti-anxiety properties, it balances the immune system, fights obsessive-compulsive disorder, will be effective against muscle and joint pain, panic attacks, post-traumatic stress , autoimmune disorders, epilepsy, it would slow the development of Parkinson’s, Alzheimer’s and many other neurological disorders, not to mention the symptoms of schizophrenia, which it would relieve, and eczema, which it would settle in no time.

Until last year, the sale of this light ole olé panacea was banned in France. But the government, presented with a fait accompli by the EU, was forced to legalize it a few months ago. The only conditions: Buyers must be at least 18 years old, the CBD oil or resin must not contain more than 0.2% THC – 140 times less than the bars sold in the cities – and they must not be presented as a medicine. In the end, the only real common point of this drug, which is not one with the small joint, is its price: 10,000 euros per. kilos, practically as much as what the dealers ask for real euphoric drugs!

No wonder thousands of investors are rushing into this business. In just a few months, 1,500 stores dedicated exclusively to the new drug have opened in France, and processed products for food, well-being and cosmetics have appeared on the shelves of pharmacies and large retailers. It’s very simple, CBD is everywhere. And its development promises to be exponential. “The market today weighs 200 million euros in our country,” explains Ludovic Rachou, president of Uivec (Union of Industrialists for the Valorization of Hemp Extracts). 2023! ”

The stars have understood this well. In the United States, where the turnover of the famous molecule already exceeds 2 billion euros, Kim Kardashian, Jennifer Aniston or Gwyneth Paltrow swear by the miracle drug. In our country, CB D’eau, one of the leaders in the sector with more than 160 franchise stores, has managed to attract celebrity gondola heads such as rapper Lord Kossity, whose portrait and name appear on the front of a selection of flowers, to 24 , 50 euros for 3 grams. Singer Mika announced for her part in mid-October that he would take shares in the company Divie, which markets the thing.

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For the smart ones who want to get started, the case is all the more tempting as the entrance fee is not very high. The price for access to a franchise is around 5,000 euros excluding taxes, and according to the managers we contacted, it takes 20,000 euros to get started with the store’s decor and the right to lease. A relatively small investment, which with comfortable margins (the sale price can reach five times the wholesale price!) Can be repaid in a few months. So things are going fast.

Brice Masseix, a 33-year-old entrepreneur and founder of Purple Store, has already opened 30 stores across France, employing around sixty people. “In the beginning, our younger clientele primarily bought flowers,” he testifies. But since last spring, we have been selling more and more herbal teas or oils to the elderly who suffer from chronic pain or anxiety. And the sales of cosmetics from our Nerobi brand are sky high. ” By taking advantage of the drop in rents for downtown stores due to the pandemic, he hopes to open several dozen more CBD stores by the end of 2022.

Pharmacies – almost 3,000 of them already sell oils or cosmetics based on this CBD – and supermarket chains are not left out. The Casino group with its Monoprix brand was the first to embark on the adventure in 2020. Very quickly, CBD derivatives won a choice among the 800 references in their alternative medicine divisions, especially thanks to the brands Kaya and Peace and Skin, created by the French company Rainbow.

The attack on orders increased this start-up, which last year raised 1 million euros from private investors – including the founders of Michel and Augustin – its workforce from 5 to 60 employees in six months. Major pharmacy brands such as Arkopharma have also launched a range of products containing CBD. And L’Oréal itself is preparing to highlight the moisturizing and antioxidant properties of the magic molecule for face creams, shampoos and even lipsticks and mascara.

Farmers are also beginning to mobilize. In France, 1,400 of them already use 20,000 hectares of hemp, making France the leading European producer. At the moment, they are content to turn this very easy-to-grow plant into straw – it requires no irrigation, nor pesticide or fungicidal treatment – and send it to “hemp fields”, which use them to make expensive bedding, cigarette paper, bible paper or building insulation materials. As a result, all the CBD sold in France is imported from Switzerland, Italy or Bulgaria.

But everything was going to change this year. According to professional organizations, 500 farmers should plant seeds in late March for a harvest in September, devoted exclusively to the fashionable molecule. To avoid overproduction and secure revenue, the state will impose contractualization, that is, the farmer must have found an outlet before planting cannabis. The sector also plans to create a brand made in France to reassure the consumer and guarantee the traceability of the product.

In short, everything would go to the best in the best of all worlds if the government had not drafted an order in July to support the development of the market. It must enter into force before the end of the year. The good news for professionals is that this text, once and for all, is about the legalization of the drug in our country. It will be the end of procrastination and withdrawal that drove investors crazy.

The bad news is that it should ban the sale of dried flowers altogether. This risks giving small shops an ugly blow if more than half of their business is now carried out thanks to this product. On the small bags of 1 to 5 grams that contain these cannabis flowers, the mention “Do not smoke” actually deceives no one. Officially, manufacturers recommend consuming them in the form of herbal teas, but the vast majority of buyers mix them with tobacco, as with “real” cannabis. “The margins are huge, we had a suspicion that it would not hold, already regrets this leader of a Parisian booth, who wishes to remain anonymous. A product like the flower that can be smoked, with a VAT of 5.5%, do you realize!

For a few more months, the stores should be able to sell their stocks. But for many, the breach is likely to be significant. For they have not only grown as hallucinogenic fungi in the big cities. They have also invested in dense rows in medium-sized towns and even villages. An example ? In L’Aigle, in Orne, no less than three companies are trying to convert the inhabitants to the virtues of the molecule by a thousand virtues.

Too obvious for a locality with almost 8,000 inhabitants. For professionals in the sector, there is no doubt that we are going to witness a saturation phenomenon, a bit like with electronic cigarette shops, where the number has been divided by four in two years. “During the first half of 2022, many outlets will no doubt be forced to close,” predicts Ludovic Rachou. Store chains will fall, others will strengthen, the market will mature. Many pioneers who bravely cleared the earth for others should pay the price Wholesalers and giants in the field of cosmetics and mass distribution, on the other hand, will probably do well The ingratitude of Capitalism …

What seems certain, though, is that nothing can stop the explosion of this business, not quite like the others. As proof, even wine is involved! Last spring, two young entrepreneurs launched a crowdfunding operation, which brought them more than 90,000 euros. Their CBD drink, called Burdi W, made from 100% of the Petit Verdot grape variety, was produced by a Bordeaux winemaker who, as is often the case in this somewhat grim world, wanted to remain anonymous. He macerated hemp in wine to give, according to the palates who tested it, a “confusing” drink. Ten thousand bottles have been sold in a snap in a few weeks, for 35 euros each, the price of a beautiful grand cru classé. Not bad for a drink whose origin we do not even know. To wonder if CBD would not still have some hallucinogenic effects …

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