Updated September 2022

First, it was hot because it was illegal. Now it’s hot because of demand. New York Governor Andrew Cuomo legalized medical marijuana in 2014, followed by its recreational use in 2021. While cannabis has always been a heated market, legalization has sparked intense conversation and industry change.

29 Design Studio has kept up with cannabis over the past few years. It helps that we’re located in Geneva, New York, where Cornell Agritech has been a center for hemp research. We’ve written about Industrial Hemp for LOCATE Finger Lakes Business Journal, discussed cannabis product development at the Finger Lakes Craft Beverage Conference, and dove into brand positioning and packaging design with the New York Cannabis Growers & Processors Association [watch the video].

A quick note on industry terms: “Cannabis” is the overarching industry name. “Hemp” refers to cannabidiol-dominant (CBD) cannabis, and “marijuana” refers to tetrahydrocannabinol-dominant (THC) cannabis.

Many varieties of cannabis are intended for human consumption. Large corporations like Finger Lakes-based Constellation Brands have embraced the cannabis market through investments in Canopy Growth. These moves have boosted confidence in cannabis products. While THC-dominant beverages are not available in New York at the time of this article, they are available in some regions of Canada.

Different varieties of cannabis are grown for various uses, including fiber, grain, CBD, and THC. CBD and THC-dominant cannabis are consumed via flower, vapes, beverages, and edibles, including gummies, chocolate, and snacks, to name a few. For new companies who want to start exploring opportunities in the cannabis industry, we’re excited to see developments in consumable and construction products and even the possibility of future cultivation at home.

CONSUMABLES

Inside cannabis flowers are compounds that can be distilled and added to foods and beverages. As New York State begins to build out its policies around cannabis, we’ll follow the fluctuating regulatory frameworks around adding cannabis extracts to consumables.

In Geneva, New York, Cirona Labs manufactures water-soluble cannabinoid ingredients for application in beverages, tinctures, topicals, and edibles. Our Founder + CEO Maureen Ballatori spoke with Cirona’s CEO + Founder Hunter Friedland at the 2021 Finger Lakes Craft Beverage Conference. 

“What Hunter and his team are doing to create water-soluble microemulsions for ingredients like CBD is really innovative. The science and regulatory rules are so important to product development for beverages,” said Maureen.

The use of THC-dominant marijuana for the purposes of “getting high” is one of the more widely known reasons for consuming cannabis. With adult-use consumption of marijuana now legal in New York State, we’ll see cities and towns evaluating their local laws with respect to cannabis businesses.

With all cannabis now legal in New York state, the main question will be how regulatory frameworks will help small businesses in the craft cannabis space. Policy will be critical to their development and growth.

CONSTRUCTION

You may have picked up a compressed fiberboard for a home construction project. Did you know companies are investigating opportunities to compress industrial hemp to build dense fiberboard?

Hempitecture, a company based in Idaho, is taking hemp to the next level. They have developed HempWool®, which serves as home insulation to replace fiberglass. They’re also making HempCrete, which incorporates fibrous hemp into concrete. 

Sustainability architecture is a new frontier for organic materials. Hemp’s natural strengths can make it a key player in construction applications, popular in both public and private markets.

In spring 2022, Hempitecture used Wefunder, a crowdfunding platform, to raise nearly $4.7M in a Community Round, attracting both strategic and first-time investors to fund team development and a manufacturing facility. The facility will support the emerging US supply chain for hemp fiber and be the first HempWool® insulation manufacturing plant in the US.

CULTIVATION

Cannabis in either hemp or marijuana form does appear to be a cash crop for farmers. Mordor Intelligence forecasts a compound annual growth rate of 15.4% during the forecast period 2022-2027 for the cannabis market. And Brightfield Group reported that farmers planted an estimated 288,000 acres of industrial hemp in the U.S. in 2019, up from 78,000 acres in 2018.

Challenges remain, however, in obtaining certified feminized seeds and clones, the intensity of growing and necessary expertise, pollination drift and cross-pollination risks, among others.

While the New York State Department of Agriculture and Markets administers a USDA-approved program to license hemp growers and seed sellers, processors of hemp for the marijuana market are regulated by the New York State Office of Cannabis Management (OCM). 

Although New Yorkers 21 years and older can grow up to twelve plants in their home, “the home cultivation of cannabis plants may only be permitted after the OCM issues regulations governing home cultivation of cannabis, which must be no later than 18 months after the first adult-use retail sale”.  

Even with legal limits regarding the growth of cannabis in homes, this area could see considerable growth with changing state and federal regulations.

ECONOMIC DEVELOPMENT

While deregulation of cannabis happened overnight with legislation in New York State, the impact of the industry will ripple on for years to come. New York will see job market growth in retail, agronomy, manufacturing, and cultivation. 

Finger Lakes Community College was ahead of the curve by developing a Cannabis Biology and Cultivation Track within its Horticulture program. This groundbreaking program will prepare individuals for careers in growing hemp.

Researchers at Cornell AgriTech in Geneva, NY, involved in the Cornell Hemp Program, work on end-to-end solutions from plant science and breeding to product and market development. 

Business plans for companies that extract cannabis compounds, manufacture industrial hemp building material, or retail marijuana look very different. Each of these industries has different target markets, and in many cases – adult-use consumables in particular – the audience is hungry for products.

WHAT’S NEXT?

Cannabis is an emerging industry unlike any other we’ve seen in generations. People cut down their cider trees and hops during Prohibition, which was only law for thirteen years. Cannabis was criminalized over 80 years ago in the United States. Troves of scientific and cultural information were destroyed that will need to be replaced.

Regulations for cannabinoid hemp and adult or medical use cannabis are still under development

Emerging industries have potential, and that’s why the buzziest ones fill quickly with new businesses. We see a crowded marketplace in the future for cannabis products, but with a frequently changing industry of regulations at the state and federal levels, cannabis startups will need to move fast to keep up. (And they’ll need pretty significant financial resources.)

Strong branding and marketing for your products will be essential for racing past the competition. Developing creative work focused on your target market is what we do for food, beverage, and agriculture businesses. Contact us to talk about your new business goals and how we can help you reach them.