Yesterday, Laura A. Labeots, Ph.D., J.D., posted an update on the significant changes to the Agricultural Improvement Act of 2018 on our Food & Agribusiness blog.

What does this post mean for the cannabis industry?

Since much of cannabis is asexually produced, it appears that marijuana and industrial hemp cultivators can utilize the Plant Variety Protection (PVP) certificate to exclude competitors from utilizing its genetics for hybrids. While we will closely monitor the industry’s ability to utilize the PVP certificate going forward, initially this looks like a viable mechanism to protect your intellectual property (IP) that was otherwise unprotectable a few weeks ago.

BIS Research has published the North American Cannabis Market – Analysis and Forecast Through 2015-2025 estimating “the cannabis derivative market value to grow over $20.7 billion by 2020 at an estimated CAGR of 29.80% from 2014 to 2020.”

So what does this mean?

There is an old adage that it wasn’t the gold miners that made it big in the Gold Rush, it was people selling the picks and shovels.  As thousands of people rush to be the next big marijuana cultivation/retail/infused product mega-millionaire with a reality TV show, only a select few will be successful… most have or will fail.

However, unlike a state-locked marijuana cultivation/retail/infused product company that cannot sell its products across state lines, ancillary businesses that service such companies are subject to less regulatory scrutiny and are able to launch national product lines and services across state lines.

Our cannabis team has successfully represented such ancillary businesses in the cannabis industry with corporate structuring, raising capital, IP protection and developing functional businesses that can service or provide products to a highly regulated industry.