The ‘Crude Oil’ of Soft Commodities


A current cannabis investment short article paralleled the finish of Alcohol Prohibition in the United States with the finish of Cannabis Prohibition.

The intent of the short article was laudable. The writer pointed out that though (legal) alcohol is practically a $250 billion per year sector in the U.S. nowadays, alcohol stocks initially went down – not up – instantly following Prohibition ended.

On the other hand, it is a flawed comparison. Alcohol is a a single-trick pony. It is a recreational drug (only).

Cannabis is also a recreational drug. A a great deal safer recreational drug. But this is only a single of the numerous industrial applications linked with cannabis.

Alcohol Prohibition was ended for the reason that the U.S. government (and the U.S. population) could no longer tolerate the damaging consequences of Prohibition.

Right here there is no parallel with cannabis.

Our governments have been forced (by the courts) to deliver legal access to cannabis for the reason that of the plethora of potent medicinal properties linked with the cannabis plant. It is only now, as complete cannabis legalization becomes inevitable, that the politicians are also admitting that cannabis Prohibition was a colossal error.

The worldwide marketplace for pharmaceutical items is roughly the very same size as the worldwide marketplace for alcohol. Each are ~$1 trillion per year industries.

Instantly, we see the cannabis sector has double the industrial possible of alcohol, post-Prohibition. On the other hand, though these are the biggest industrial applications for cannabis, they nonetheless represent just a beginning point.

Cannabinoids, the active components in the cannabis plant are very good for us. The human physique naturally produces its personal cannabinoids. They are vital for human overall health.

Consequently, there is practically limitless possible for cannabis items as overall health supplements, nutrition supplements, and cosmeceuticals. Far more worldwide markets, with twelve-figure ($100’s of billions) possible.

Even right here, we are only hunting at industrial applications linked with cannabis itself. When we expand our gaze to consist of the industrial possible of hemp, the industrial possibilities are practically infinite.

Current news about an all- hemp aircraft, powered by hemp biofuel puts an exclamation point on this.

We currently knew that hemp produces superior fiber for cloth, paper, and associated items – every thing important for the building of the interior of an aircraft.

On the other hand, hemp can also be fabricated into a building material that is ten occasions stronger than steel. And this 5-passenger aircraft constructed completely from hemp is powered by a hemp biofuel.

Hempearth, the Canadian enterprise pioneering this technologies, believes that a hemp composite could ultimately replace fiberglass (one more multi-billion dollar marketplace).

Hi-tech applications for hemp? How about a hemp-derived battery that (according to its designer) can produce overall performance “significantly better” than from lithium-ion technologies?

Dr. David Mitlin is at the moment teaming up with Alternet (a Texas-primarily based electric motorcycle enterprise) to energy its motorbikes with hemp batteries.

In quick, there is no other organic (soft) commodity that demonstrates industrial possible that is even remotely comparable to the cannabis plant. Certainly, in the complete worldwide economy, only a single tough commodity provides a affordable comparison to cannabis: crude oil.

Like cannabis, a single of the applications of crude oil (definitely a extremely significant a single) is as fuel. But as technologies sophisticated, we quickly found that oil could be integrated into the worldwide economy in a vast array of industrial/industrial applications.

In reality, oil has develop into so deeply integrated into the worldwide economy that we continue to quickly exhaust the provide of this non-renewable commodity. The production of oil is becoming increasingly pricey and (in lots of situations) is producing catastrophic environmental consequences.

In contrast, not only is cannabis a renewable commodity. It is a great deal a lot more eco-friendly than most industrial crops in that cultivation only causes minimal depletion of soil nutrients.

This implies that cannabis can be regularly cultivated more than the lengthy term without the need of the damaging consequences linked with other significant industrial crops (excessive use of fertilizers, toxic run-offs, and so on). It is nicknamed “weed” for a explanation.

For investors contemplating the carnage of the horrific and irrational selloff in marijuana stocks, this requires to be kept in concentrate.

Accusations in the mainstream media that the legal cannabis sector is “a bubble” reflect laughable ignorance. It will take decades from the time that cannabis is totally legalized ahead of it can commence to attain its accurate industrial possible.

It is like calling the crude oil marketplace “a bubble” – 100 years ago.

This is why cannabis corporations are creating such heavy capital investments. And it is a single explanation why the diversified cannabis corporations haven’t however produced the transition to profitability.

The general chance in legal cannabis is so huge and so broad that the corporations on the inside of this huge development chance really feel compelled to advance operations on a number of fronts.

Medicinal cannabis. Recreational cannabis. Cannabis nutraceuticals. Cannabis cosmeceuticals. Emerging international markets to pursue. And then there are the million-and-a single industrial applications linked with hemp.

It is a industrial chance unparalleled in the worldwide economy nowadays. The new “Crude Oil”.


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