MJBiz - March/April 2024 - 45

and started selling hemp-derived
delta-9 THC products online in
October 2023.
The company, which moved
its corporate headquarters to
Connecticut in 2022, produces and
ships tablets containing
2 milligrams of hemp-derived
delta-9 THC from its manufacturing
operation in New York.
In the first three months
after launching 1906 Shop, the
company's hemp-derived delta-9
online store that ships to 40 states,
1906 made about $500,000 in sales,
Barsoom said.
REACHING CUSTOMERS
Beyond revenue, 1906's hempderived
cannabinoid business gives
the company access to consumers in
states that don't yet have regulated
medical or adult-use marijuana
markets. Texas is 1906's No. 1 market
for hemp-derived delta-9 products,
but California and Florida also are
top buyers, Barsoom said.
" Building a national brand has
been our goal since Day One. Our
No. 1 state is Texas, a place where
we wouldn't have access, " Barsoom
said. " This now gives us access
to consumers that we've never
had access to before. If you're not
looking at this, then you should be
as a cannabis company. "
Heidi Urness, Seattle-based
co-chair of the cannabis practice
at the McGlinchey Stafford law
firm, agreed that hemp-derived
cannabinoids could be a good
avenue to new customers.
" Many marijuana businesses do it
because it's a good way to establish
presence in states where it may be
difficult to get a license or takes
a long time to get a license. So,
consumers get to know you that way,
and once you get your license, they
already know you, " Urness said. " For
example, if an adult-use company
wants to get into Texas, the only
way to do it is to get into the hemp
industry. "
LEGAL PEACE OF MIND
Like many of his peers in the
hemp-derived cannabinoid space,
Barsoom believes that federal law is
on his side.
" While federal legalization
hasn't happened, something like it
has, " he said. " What has emerged
is a regulatory structure and a
consumer-demand framework,
which is basically federal
legalization. "
In Barsoom's view, the 2018
U.S. Farm Bill made it legal to
sell hemp-derived cannabinoid
products across the country, except
to consumers in a minority of states
that have banned such products.
Ironically, New York is one such
state, so 1906 can export hempderived
cannabinoids from New
York to other states, but it can't sell
them in New York.
" This is federal legalization, "
Barsoom said. " We're taking
people's credit cards. We're shipping
to them. We're advertising on
Facebook. "
Despite this outlook, 1906
believed it was important to be
prudent about its delta-9 THC
business.
" We decided early on that we were
going to have some guardrails to our
business, " Barsoom said.
The first guardrail is that the only
hemp-derived cannabinoid 1906
will sell is delta-9 THC.
" We don't think that we
understand enough about the safety
profile of D-8 (delta-8 THC, which
is synthesized from CBD), and that's
not what consumers want, " Barsoom
said. " They want the real thing, and
that's delta-9. "
The second guardrail " is an
omnichannel strategy that protects
our brick-and-mortar dispensaries. "
Online orders, therefore, are capped
Note: A federal lawsuit filed in February
accuses 14 cannabis companies including
Stiiizy and Cookies of packaging
marijuana products and selling them as
delta-8 derived from hemp. Around the
same time, stiiizyhemp.com went from
active to " under construction. " Days
later, Cookies' online store for THCA
items listed all products as " out of stock. "
Cookies' delta-8 THC products remained
available for purchase, however.
at 2 milligrams of THC. " If you want
the stronger stuff, you have to go
into the dispensary. So, that creates
a sharp distinction. "
The third guardrail is that
hemp-derived delta-9 is more
expensive than 1906's marijuanabased
products, driving consumers
with access to the company's core
business.
For example, a 50-milligram tin
of hemp-derived delta-9 tablets
costs $40, while a 100-milligram tin
of marijuana-based products costs
$35 in the dispensary.
" We're really protective of that
dispensary channel, " he said.
CONSUMER DEMAND
Who are the consumers willing to
pay more for less bang? People in
states that don't have regulated
marijuana markets, for one-but
Barsoom said the direct-to-consumer
model also appeals to those seeking
convenience. " The convenience
factor is critical, " he added.
Hemp-based cannabinoids also
appeal to new marijuana consumers
who want to try something low dose.
And because hemp is federally legal,
it eases anxiety that consumers
might have about breaking U.S.
laws.
Omar Sacirbey is the
editor of MJBizMagazine.
You can reach him
at omar.sacirbey@
mjbizdaily.com.
mjbizdaily.com | March-April 2024 45
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MJBiz - March/April 2024

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MJBiz - March/April 2024 - Cover1
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MJBiz - March/April 2024 - Cover3
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