Legal cannabis: who is behind this golden case?

“A cannabis supplement to your Margarita?” No, this server at The Village Terrazza, a restaurant in the 14th arrondissement of Paris, is not a marie-jeanne dealer. For 5 euros more, he simply offers us to sprinkle our pizza with flowers that contain cannabidiol, the legal molecule, but a little sulphurous, which has been all the rage for a few months now. The taste is a bit earthy, the effects aren’t really there, but who cares? Because it doesn’t float consumers, this new green gold promises a nirvana of profits to its traders and producers. And without risking a police raid.

But let’s do the introductions before we move on. Cannabidiol (CBD for short) is a substance derived from “cannabis sativa», a hemp variety with a fairly low content of THC, the molecule with known psychotropic effects. So it has no hallucinogenic effect. Like its cousin hashish, it is obtained in the form of oil or resin through an industrial extraction process.

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

Until last year, the sale of this light ole ole wonder drug was banned in France. But the government, presented with a fait accompli by the European Union, 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 cannot be presented as a medicine. Ultimately, the only real common point of this drug that is not one with the small joint is the price: 10,000 euros per kilo, practically as much as what the dealers charge for real narcotics!

No wonder thousands of investors are rushing into this business. In just a few months, 1,500 stores dedicated to the new substance have opened in France and processed food, wellness and cosmetics have appeared on the shelves of pharmacies and major retailers. It’s very simple, CBD is everywhere. And its progression promises to be exponential. “The market today weighs 200 million euros in our country, says Ludovic Rachou, president of Uivec (Union of industrialists for the valorization of hemp extracts). According to our projections, it could be 700 million by 2022 and one billion by the end of 2023!”

The stars have understood this well. In the United States, where the turnover of the well-known molecule already exceeds 2 billion euros, Kim Kardashian, Jennifer Aniston or Gwyneth Paltrow swear by the wonder substance. In our country, CB D’eau, one of the industry leaders 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 covers of a selection of flowers, for 24.50 euros for 3 grams. Singer Mika announced in mid-October for his role that he would take a share 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 because the entrance fee is not very high. The price of access to a franchise is around 5,000 euros excluding taxes and according to the managers we contacted, it costs 20,000 euros to get started, with the set-up of the store and the right to rent. A relatively small investment that can be recouped in a few months with comfortable margins (the selling price can be up to five times the wholesale price!). So things are moving fast.

Brice Masseix, 33-year-old entrepreneur and founder of Purple Store, has already opened 30 stores across France, employing about 60 people. “In the beginning, our younger customers mainly bought flowers, he testifies. But since last spring, we’ve been selling more and more herbal teas or oils to seniors who suffer from chronic pain or anxiety. And the turnover of cosmetics from our Nerobi brand is increasing enormously.” Taking advantage of the drop in rents for city center shops caused by the pandemic, he hopes to open several dozen CBD stores by the end of 2022.

Pharmacies – nearly 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 place of choice among the 800 references in its alternative medicine, thanks in particular to the brands Kaya and Peace and Skin , made by the French company Rainbow.

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

Farmers are also starting to mobilize. In France, 1,400 of them already exploit 20,000 hectares of hemp, making France the leading European producer. At this point, they are content to turn this very easy-to-grow plant into straw – it requires no irrigation, no pesticide or fungicide treatment – and send it to “hemp fields”, which they use to make animals. bedding. , cigarette paper, bible paper, or building insulation materials. As a result, all CBD sold in France is imported from Switzerland, Italy or Bulgaria.

But this year everything has to change. According to professional organizations, 500 farmers should plant seeds at the end of March for a harvest in September, exclusively devoted to the fashionable molecule. To prevent overproduction and secure income, the state will impose contracting, meaning that the farmer must have found a sales area before planting the cannabis. The sector also plans to create a label made in France to reassure consumers and guarantee the traceability of the product.

In short, everything would work out in the best of all worlds if the government had not prepared a draft decision by July to support the development of the market. It should enter into force before the end of the year. The good news for professionals is that this text will act once and for all against the legalization of the substance in our country. It will be the end of procrastination and backtracking that drove investors crazy.

The bad news is that it should ban the sale of dried flowers altogether. This risks a nasty blow to small shops, where more than half of their activities are now carried out thanks to this product. On the small bags of 1 to 5 grams that contain these cannabis flowers, the statement “No smoking” does not deceive anyone. Officially, the manufacturers recommend consuming them in the form of herbal teas, but the vast majority of buyers mix them with tobacco, just like “real” cannabis. “The margins are huge, we suspected it would not last long, already regrets this manager of a Parisian stall who wishes to remain anonymous. A product like the flour, which can be smoked, with a VAT of 5.5%, you realize!

Stores should be able to sell their stocks for a few more months. But for many, the break is probably significant. Because they don’t just grow like hallucinogenic mushrooms in the big cities. They have also invested in close ranks in medium-sized cities and even rural towns. An example ? In L’Aigle, in the Orne, no fewer than three companies try to convert the inhabitants to the virtues of the molecule with a thousand virtues.

Too much, of course, for a town of barely 8,000 inhabitants. For industry professionals, there is no doubt that we will witness a phenomenon of saturation, a bit like electronic cigarette stores, whose number has been divided by four in two years. “During the first half of 2022, many outlets will undoubtedly have to close, predicts Ludovic Rachou. Store chains are shrinking, others are strengthening, the market is maturing. Many pioneers, who have bravely cleared the ground for others, are paying the price for this bloodshed. On the other hand, wholesalers and behemoths of cosmetics and mass distribution are likely to do well. The ungratefulness of capitalism…

However, what seems certain is that nothing can stop the explosion of this company unlike the others. As proof, even wine is involved! Last spring, two young entrepreneurs launched a crowdfunding campaign that brought them more than 90,000 euros. Their CBD drink, called Burdi W, made from 100% Petit Verdot grape variety, was produced by a Bordeaux winemaker who, as is often the case in this somewhat scabrous world, wished to remain anonymous. He macerated hemp in wine to give it an “enigmatic” drink, according to the taste buds who tested it. Within a few weeks, ten thousand bottles have been sold for 35 euros each, the price of a beautiful grand cru classé. Not bad for a drink we don’t even know the origin of. To wonder if the CBD wouldn’t have some hallucinogenic effects…

>> Special investments: the right choices and those to avoid. This is the cover of the last issue of Capital. Access to this edition in seconds from 3.90 euros.

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