CULTIVATED: Inside the cannabis industry's meltdown, teen use creeps up in legal states, and an exclusive look at industry salaries
Welcome to Cultivated, our weekly newsletter where we're bringing you an inside look at the deals, trends, and personalities driving the multibillion-dollar global cannabis boom. Sign up here to get it in your inbox every week.
Happy Friday everyone,
I took a step back over the past few weeks and interviewed some of the sharpest cannabis execs and experts about what the turmoil of the past few months means for the industry, and where we go from here.
One of the biggest takeaways: Cannabis companies and investors overextended themselves, driven by exuberance around an emerging market with an attractive story. Most execs say these are temporary speed bumps in the quest to dominate a global industry worth hundreds of billions.
Give the story a read - I'm anxious to hear your thoughts.
It was a tough week across the board for the world's biggest cannabis companies, as their earnings continued to weigh on share prices across the sector.
My colleagues at Markets Insider covered Canopy Growth's earnings, and they have more stories coming.
What else?
I put on my science reporter hat for the first time in over a year and took a look at a new study that points to a troubling trend: Problematic marijuana use among teens has risen slightly in states after they legalized marijuana. While these findings are concerning, the study's lead author told me the results do not suggest we shouldn't be legalizing marijuana.
Rather, we should be tracking both the negative and positive consequences of such a monumental policy shift to make sure it's done the right way. After all, polling from Pew shows 67% of Americans support legalizing marijuana - I can't think of much else Americans agree on to that extent in these polarizing times, except maybe for puppies.
It's becoming a question of how we legalize cannabis, and not if we do. Researchers should be objectively studying all the effects carefully.
If you want a discount to BI Prime to read my stories, sign up here!
-Jeremy
Here's what we wrote about this week:
Layoffs, cratering stocks, and blown-up deals: 11 experts take us inside the cannabis industry's meltdown and tell us where the industry goes from here
Cannabis companies in recent months have struggled to raise money and close marquee deals. The emerging industry has been buffeted by headwinds including vape-related lung injuries, lower-than-expected retail sales, and a parade of lawsuits and corporate misdeeds.
Cannabis execs and investors who Business Insider spoke with say these are temporary speed bumps in the quest to dominate a global industry worth hundreds of billions.
"I think we'll see some real shakeout over the next few months," said Mark Zekulin, the CEO of Canopy Growth, a Canadian cannabis cultivator and retailer.
The cannabis industry is set to employ 400,000 people in the US by 2021 - here's how much key jobs in the industry pay, from budtender to cultivation director
Despite recent turmoil in the industry, cannabis companies are expected to add over 200,000 jobs to the US workforce by 2021.
Cannabis recruiting startup Vangst shared its 2019 salary guide exclusively with Business Insider. In it, you'll find the average salaries for positions like director of cultivation, VP of retail, and more.
For example, a director of cultivation can make $118,600 per year.
A troubling new study shows that legalizing marijuana is linked with an increase in problematic pot use among teens
A new study published in the journal JAMA Psychiatry found a small increase in heavy, detrimental marijuana use among teens in states with legal marijuana shops. It also showed a small increase in problematic marijuana use, known as cannabis use disorder, among adults.
The study shows that among teens aged 12 to 17, problematic marijuana use was 25% higher when states legalized marijuana. The researchers note that the increase was small, from 2.18% to 2.72%. Among adults 26 and older, cannabis use disorder increased from 0.9% to 1.23%.
While concerning, "our results in no way imply that we shouldn't be legalizing marijuana," one of the study's authors, NYU Langone's Magdalena Cerdá, told Business Insider in an interview.
Capital raises, M&A activity, partnerships, and launches
- Cresco Labs and Origin House have repriced their planned merger, cutting the value to around $400 million from $825 million. The deal is now expected to close in January of 2020. Read my original story from when the deal was first announced in April here.
- Cannabis retailer Green Thumb Industries (GTI) sold its Pennsylvania cultivator and processing facility to Innovative Industrial Properties (IIPR) in a sale-and-leaseback deal for $20 million. The deal will bring IIPR's total investment in GTI's property to $39.6 million.
- The founders of the popular conference series Money 20/20 and HLTH have raised $5 million for their newest venture, Growth, a cannabis conference. The first event will be held in September in Las Vegas.
- CBD company Neptune Wellness Solutions announced a definitive agreement with International Flavors & Fragrances (IFF) to co-develop hemp-derived CBD products.
- Atai Life Sciences and Cyclica launched a joint venture to revolutionize drug development for mental health disorders.
- Her Highness, a female-focused cannabis brand, launched this week. The company is backed by Merida Capital Partners, a cannabis-specific fund.
Executive moves
- Graham Farrar, a member of Sonos' founding team, has joined California cannabis company Glass House Group as president.
- Parallel, formerly Surterra Wellness, has named Kevin Fisher as COO. Fisher will report directly to CEO William "Beau" Wrigley, Jr.
Stories from around the web
- Cannabis Kingdom: High hopes and early stumbles in Lesotho (Cannabis Wire)
- As Canadian weed companies ramp up in Germany, patients suffer (Vice News)
- China says no to marijuana but lets its cannabis industry bloom (Wall Street Journal)
- 'It's honestly hell': Hospitals see rare vomiting syndrome in heavy marijuana users (Boston Globe)
Did I miss anything? Have a tip? Just want to chat? Send me a note at jberke@businessinsider.com or find me on twitter @jfberke.