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Cannabis 1.0 was the brief, shining period between the medical marijuana (MMJ) days and passage of full recreational use in Washington and Colorado. This first flush of what an industrial cannabis industry could look like showed that legalizing and regulating cannabis had a viable future.

The passage of MMJ laws in the mid 90’s permanently cracked the dam of cannabis prohibition. The War on Drugs narrative that cannabis was the gateway to a life of crippling addiction just didn’t hold up. Doctors were hearing first-hand about cessation of auto-immune disorder symptoms. Drug warrior skeptics saw cannabis relieve the terrible side effects of cancer treatments prevalent in Western medicine with their own eyes and in their own families. Veterans returning from war in the middle-east began asking the VA about cannabis therapy for PTSD.

As increasing numbers Americans utilized cannabis therapies, MMJ activists and patients received increasing support from local and state legislators. Cautiously, the underground community began to operate in the light of day. Farmers markets, patient networking events, and education seminars began to appear and promote cannabis therapy, and information about cultivation, strain genetics and plant management, as well as the culture around the plant, was shared.

The cannabis community seized the shift in attitudes as an opportunity to push forward. In 2008, the incoming Obama administration was rumored to be receptive to cannabis reform, although there was no public commitment to meaningful legislative action. Cannabis continued to be labeled a Schedule 1 Substance with “ medical use and high potential for abuse.” But then, in 2009, there was some daylight in the form of the Ogden Memo.

Deputy Attorney General David Ogden directed US attorneys to “...not focus federal resources in your states on individuals whose actions are in clear and unambiguous compliance with existing laws providing for the medical use of marijuana.”

The memo was intended to signal the legitimate MMJ community that truly sick people using cannabis were not the priority for the DOJ. It was interpreted by the industry as a green light to come above ground.

Lawyers from organizations like The National Cannabis Industry Association and The Cannabis Alliance began to present new operating models and interpretations of MMJ laws. They afforded a defensible position for the creation of cannabis-centered business and certainly pushed the boundaries of what was considered permissible.

The Collective Garden Model was adopted throughout the west coast. It grouped patients into blocks that assigned the cultivation of their legally allocated plant count to non-profit entities. These, in turn, maintained, harvested and delivered cannabis products. Patients accessed the medicine grown by the Collective Garden by “donating” to the non-profit. Storefront dispensaries became a common fixture in shopping malls in California. In Washington, there is debate on how many shops existed, but one estimate in 2013 was that there were more collective garden dispensaries operating in Seattle than Starbucks stores serving lattes.

During this brief period there was an explosion of creativity, experimentation, innovation and growth in the cannabis industry. Emboldened garden operators made huge strides in cultivation processes and garden technology. The LED revolution was in full swing for home and industrial use, and cannabis growers used that momentum to push technology forward, working to lower operating costs for larger gardens.

Old school cannabis users and MMJ patients had utilized plant extracts in honey oil substrates for decades. Now, whole new categories of extracts were being created by improving the traditional solvent less techniques. In Seattle, industrial grade extraction processes were created and refined, utilizing light hydrocarbon solvents like N-Butane, N-Propane and supercritical CO2. This “open blasting” technique was dangerous and produced oil full of butane. The concentrate pioneers used medical grade gasses and vacuum oven technology to purge the residual solvents.
One of the most significant advances during this period was in genetics and breeding new cannabis strains. The considerable energy once spent keeping operations hidden and activities clandestine was now available for improving processes and operations. As new facilities were designed, and legacy facilities improved, more space was dedicated to breeding and phenotype definition. Whole organizations, now valued in the billions, sprang from the seeds and plants identified by breeders of elite genetics. The selective breeding frenzy and the quantum leap in growing technology dramatically improved the quality and potency of cannabis.

The expanding needs of the nascent industry created demand in a whole host of support businesses and suppliers. Small indoor garden shops grew to warehouse the massive consumable inventory needed by the ever increasing number of collective gardens. Existing horticultural products like Living Soil Amendments, synthetic nutrients, planting soil and Japanese Steel Bonsai Shears - saw demand surge.  Other, less obvious, products like extra-large (smellproof) turkey basting bags, and specialty HVAC equipment found a whole new customer base. Businesses for packaging, pre-roll cones, custom trimming shears and bins, indoor UV Safety sun-glasses, and specialty plumbing components appeared. Many are now publicly traded, multi-million dollar companies.

A crucial sector of the new ancillary businesses was laboratory testing. With more patients using more cannabis, there was a rapid expansion of production and an inevitable influx of growers who lacked the experience to produce clean, quality cannabis. The need to ensure all cannabis medicine was free from molds and fungus cannot be overstated. Cannabis contaminated with foreign matter, mold or bacteria can cause a variety of health issues, including compromised immune systems.

Israel had long been an epicenter of cannabis research. The first major discoveries about THC and CBD were made in the early and mid 60’s by Raphael Mechoulam. New research into the chemistry of cannabis delivered new understanding of its compounds and the way they interact with the nervous system.  Reports documented that the potency and efficacy of a specific cannabis harvest could be qualified and quantified now be quantified in a way that made sense. Since an effective MMJ treatment program requires metrics for repeatability and predictability, the advance was significant.

At the same time, new research was progressing to describe the whole class of organic compounds THC belongs to, called “cannabinoids”. These compounds and the way they interact with the body and each other came to be called the “Entourage Effect”. This interaction was subsequently identified as the primary driver of healing and restorative effects from cannabis.

The industry community in this era was populated by people willing to take real risks because they loved the plant and recognized its potential, medicinally and commercially. Freedom from federal harassment allowed small business to thrive and innovate while the existing policies protected them from larger, monied interests and actors. The lack of banking services was inconvenient, but it was one of the things that kept the group small and tightly knit. The good actors and superior products created in this era rose to the top. It has been said that the cannabis experiment during this time period was the closest thing to pure free market capitalism that has ever existed in the US. 

The passage of recreational laws in the west coast marked the end of Cannabis 1.0, as regulations from individual states surged. Many of the networks, and in some cases statewide ecosystems were dismantled as a consequence of legalization.

With mixed emotions, current Cannabis 2.0 participants recount stories about the atmosphere, energy and profit margins of that post-medical era. But the reality is that those conditions are gone.  This new thing isn’t what it was “…back in medical.”

What Is Cannabis 2.0?
Here’s what Cannabis 2.0 looks like from a high level… As of this writing, ten states and Washington DC have legalized marijuana for recreational use....
Chris Guthrie
Chris is the General Manager of Delta9 Systems, a division of General Data Co. He is an expert in the cannabis industry, having participated in the birth of the cannabis industry in Washington, and has operated one of the first and oldest medical dispensaries in Seattle. For a decade, Chris has participated in the design and managed the construction of dozens of indoor gardens, and has been involved in cultivation, processing, retail operations, as well as industry activism.
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What Is Cannabis 2.0?

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