Eric Vengroff, Senior Financial Analyst
June 27, 2019 – The first day of summer was also opening day for CannaCon Midwest at Detroit’s Cobo Center. CannaCon assembles the cannabis industry in a number of regional shows across the U.S. in various markets, including the Midwest, in Detroit, the Northeast, in Springfield, Massacheusetts, the South in Oklahoma City, and the Northwest in Seattle.
Like the many cannabis shows that are sprouting up throughout the US, Canada, and worldwide, this was CannaCon Midwest’s inaugural year. Michigan legalized the medical use of cannabis in 2008 and was the first midwestern state to legalize recreational consumption at the end of 2018. I was interested to learn what I could first-hand about how the recent legislation was starting to impact the discussion and the market.
As venues go, it would be hard to surpass the location and scale of the Cobo Center, conveniently situated in downtown Detroit with easy ingress and egress to major highways and the Canadian border. The exhibit space was typical of the smaller regional shows with everything from pipe and drape backdrops with basic rollup banners, to slightly more elaborate displays from larger and exhibitors. The seminars covered various aspects of the industry – cultivation, packaging, accounting, legal, and safety among them, largely put on by the vendors exhibiting, typical of most trade events. Notable in their absence were what you might call the ‘canna-celebs’ and ‘deep thinkers’ of the industry; CEO’s of publicly-traded cannabis growers, keynote speakers from science, government, consulting or medical fields, and so on. As these heavyweights often require fees, honoraria or other compensation to appear and that can be a financial challenge for a start-up event, it’s understandable. Many of the sessions I attended were in half-full spaces. It’s hard to know whether a couple more well-known names may have drawn larger attendance.
Detroit is a few miles away from Ann Arbor, the cannabis industry and culture center of Michigan. The beneficiary of very lenient cannabis possession laws since the seventies, Ann Arbor is home to a number of ‘provisioning centers’ that service the medical cannabis market. These outlets serve as the primary sources of supply for the legal market, as no recreational cannabis stores are expected to open in Michigan prior to 2020. This delay in timing regarding adult use begs the question…if you can carry up to two ounces on your person and up to 10 ounces at home, where is your supply coming from? Certainly not everyone is growing their own, but from a regulatory standpoint, the police forces and local judiciaries in certain areas may not care in the short term, as long as they aren’t required to enforce the previous outdated and ineffective laws. There were several Ann Arbor-based businesses there, including Exclusive Brands, a provisioning center that is also branching out into various products, including edibles that will be manufactured under license.
As distinct from Canada, where CBD extracts are both illegal and unavailable, there were abundant displays of CBD in various finished forms. Some exhibitors had product with CBD infused in various concentrations, others did not include CBD. One exhibitor said he cut down on the amount of CBD in his product because he ‘knew’ that some exhibitors had given their products the full, or even extra dosing. There were also people vaping CBD on the show floor at a couple of booths.
I have to admit I get a little fuzzy on this whole CBD thing. If it is non-psychoactive, how is one supposed to know how much CBD they need to take, or what difference it makes if someone spikes your gummy bears with more CBD than another vendor, how would you know? Will you feel ‘too good’ a couple of hours later? I honestly don’t know how much CBD I consumed at the show or whether my health was temporarily or permanently ameliorated.
As I was gnawing my way through the various samples on offer, it was universal that none of the products displayed were actually available for sale yet, as they were all undergoing testing -such were the claims anyway. It wasn’t clear who was doing the testing or what, if any role any standards -industry, state, or federal – would govern the suitability and eventual sales of these products.
I don’t know if the organizers were happy with the results of the show, either as an aesthetic or financial success – we were unable to reach the marketing manager for a quote prior to publication. With the launch in earnest of the recreational market next year in Michigan, it will be interesting to see whether the show will gain or diminish in relevance or size.