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The Rise of Organic Cannabis in North America

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The Story of Cannabis: What Investors Need to KnowAnatomy of a Cannabis PlantA Quality Cannabis ProductThe Rise of OrganicBalancing the Environmental Costs of CannabisThe Science Behind the $13 Billion Medical Cannabis IndustryComing soonComing soon

The Rise of Organic Cannabis in North America

The Rise of Organic Cannabis in North America

Canna-business is booming on the heels of Canada’s momentous decision to legalize cannabis nationwide, and the industry is now projected to bring in close to $95 billion by 2026.

Much like the way organic products have risen to prominence in supermarkets, consumers will start to demand high-quality products as the cannabis industry matures, as well.

Today’s infographic comes from The Green Organic Dutchman, and it elaborates on why investors and consumers alike are anticipating a growing trend towards organic cannabis.

Roots of the Movement

In a nutshell, organic refers to products grown without fertilizers, pesticides, or genetic modifications. By that definition, organic practices also help to minimize the impact of farming on an environmental level.

The organic trend originates in the post-WWII era, as technological advances transformed the efficiency of large-scale agriculture. As practices changed, farmers and scholars worried about the long-term effects that the use of synthetic chemicals could have.

Thus, the organic movement was born:

1940
The phrase “organic farming” is first coined by English agriculturalist Lord Northbourne.

1962
The book “Silent Spring” by Rachel Carson raises public awareness of the harms posed by pesticides, launching the contemporary environmental movement.

1972
The International Federation of Organic Movements (IFOM), a worldwide organization for the organic agriculture movement, is founded.

1990
The U.S. passes the Organic Food Production Act (OFPA), defining standard organic production practices.

More recently, Amazon’s acquisition of Whole Foods for $13.7 billion demonstrates the influence of consumers in catapulting organic products into the mainstream.

The Allure of Organic Cannabis

Consumers are expecting the same quality standards from other products they consume, such as cannabis.

Growing cannabis organically ensures that it is:

1. Safe for consumption

Natural cultivation methods mean that organic cannabis is often a safer end-product.

2. A premium experience

Organic cannabis offers consumers improved flavor and quality, with enhanced potency.

3. Environmentally sustainable

With organic practices, the surrounding water, soil, and biodiversity are unharmed.

Fine Print?

One caveat to choosing organic is the price differential. One gram of organic cannabis can cost 26% more than regular grade cannabis – but that’s because organic cultivation requires more attention to detail.

Nevertheless, increasing consumer demand for less chemically-laden products can outweigh this price differential in many cases. The growing market for cannabis is now on track to bring in $10 billion this year – outpacing all previous estimates.

Stay tuned for part 5 of this series, which will look at the way growing organic cannabis can be complemented by sustainable practices.

The Story of Cannabis: What Investors Need to KnowAnatomy of a Cannabis PlantA Quality Cannabis ProductThe Rise of OrganicBalancing the Environmental Costs of CannabisThe Science Behind the $13 Billion Medical Cannabis IndustryComing soonComing soon

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Agriculture

An Investing Megatrend: How Climate Change and Resource Scarcity are Shaping the Future

Learn how climate change and resource scarcity are affecting our most basic needs, and how investors can take advantage of this growing megatrend.

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climate change and resource scarcity

If you’ve ever played with dominos, you’re familiar with their cascading effects. Gently nudge one piece, and the force will ripple throughout the rest.

This process of cause and effect works much the same way in society and business: as global forces take hold, their effects are deeply intertwined with the financial markets.

The Climate Megatrend

Today’s infographic comes from BlackRock, and it explains how one such megatrend, climate change and resource scarcity, will be a long-term opportunity for investors.

Climate Change and Resource Scarcity

Earth in the Hot Seat

In 2018, global CO2 emissions rose 1.7% to the highest level since 2013. These rising emissions have intensified the effects of climate change, with 2015-2018 being the four hottest years ever recorded. Society and the economy are starting to feel its negative consequences:

  • Extreme weather events have become more frequent. In particular, floods and other hydrological events have quadrupled since 1980.
  • In hotter, wetter conditions, infectious diseases spread more easily—between 2004-2017, total tick-borne illnesses increased by 163%.
  • The global insured losses from natural catastrophes was $79 billion in 2018.
  • Extreme weather effects, and the health impact of burning fossil fuels, cost the U.S. economy at least $240 billion in 2018.

It’s clear that climate change is having an immediate, serious impact on the world.

Many see climate change as a long-dated future risk, however, our research findings show that compared to the 1980’s, there are measurable GDP impacts in the market today

-Brian Deese, Global Head of Sustainable Investing at BlackRock

In addition to these issues, climate change is contributing to another problem: it’s becoming harder to feed the global population.

Over 7 Billion Mouths to Feed

Climate change significantly threatens global food security. As glaciers melt, the world’s freshwater supply—including what’s available for food production—melts with it. This is a significant problem, considering that between 2,000-5,000 liters of fresh water are needed to produce one person’s daily food intake.

As an added hurdle to food production, supply and demand are pulling in opposite directions.

The share of total employment in agriculture has dropped significantly over time. Even worse, among the food that is able to be harvested, roughly 30% is lost or wasted globally.

On top of limited resources, the world will have to contend with forces driving up food demand.

  • Population growth: By 2050, the global population will grow by about two billion.
  • More calorie-rich diets: As emerging economies grow their wealth, their populations seek richer foods like meat and dairy products.

How can society combat these pressing issues?

A Greener, More Plentiful Future

As society works to slow climate change and produce more with less, a myriad of investment opportunities will emerge.

  • Renewable energies are becoming increasingly competitive.
  • Electric & fuel cell vehicles are growing in market share.
  • Products made from recycled materials are appealing to environmentally-conscious consumers.
  • Agricultural machinery counters the declining workforce and increases productivity.
  • Precision agriculture leverages real-time environmental data to help farmers make decisions.

Climate change and resource scarcity will be a driving force behind the actions of consumers, companies, and governments for years to come.

By staying attuned to this megatrend, investors will be able to spot long-term opportunities.

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Our Impact on Climate Change and Global Land Use in 5 Charts

We highlight the five most important takeaways from the IPCC’s recent 1,400+ page report on climate change and land use.

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IPCC climate report charts

Our Impact on Climate Change and Land Use in 5 Charts

As the world population approaches the eight billion mark, it’s becoming clear that we’re impacting the planet in unprecedented ways.

Humans have made such dramatic changes to Earth’s systems, from climate to geology, that many are suggesting we’ve entered into a new epoch – the Anthropocene.

To better understand the challenges of this era of wide-sweeping human impact on the planet, the Intergovernmental Panel on Climate Change (IPCC) has produced a massive report covering land use and climate change.

According to the IPCC, the situation is looking more dire by the year. Below are a few of the key insights buried within the 1,400+ pages of the massive report.

Shifting Global Land Use

The scale of land use and loss of biodiversity are unprecedented in human history.

According to the report, roughly two-thirds of the world’s ice-free land is now devoted to human uses. Ecosystems, both forested and unforested, only account for about 16% of land today. Part of the reason for this dwindling supply of natural habitat is the rapid increase of agricultural activity around the world.

Since the dawn of the 20th century, global land use has shifted dramatically:

Global land use over time

Not only has land use changed, but so has farming itself. In many parts of the world, increased yields will primarily come from existing agricultural land. For example, wheat yields are projected to increase 11% by the year 2026, despite the growing area only increasing by 1.8%. Rice production exhibits a similar trend, with 93% of the projected increase expected to come from increased yields rather than from area expansion. In some cases, intensive farming practices can degrade soil more than 100x faster than the time it takes for new soil to form, leaving fertilizers to pick up the slack.

One of the most dramatic changes highlighted in the report is the nearly eight-fold increase in the use of nitrogen-based fertilizers since the early 1960s. These types of fertilizers are having serious downstream effects on aquatic ecosystems, in some cases creating “dead zones” such as the one in the Gulf of Mexico.

In addition to the negative impacts outlined above, the simple act of feeding ourselves also accounts for one-third of our global greenhouse gas footprint.

Things are Heating Up

The past half-decade is likely to become the warmest five-year stretch in recorded history, underscoring the rapid pace of climate change. On a global scale, even a small increase in temperature can have a big impact on climate and our ecosystems.

For example, air can hold approximately 7% more moisture for every 1ºC increase, leading to an uptick in extreme rainfall events. These events can trigger landslides, increase the rate of soil erosion, and damage crops – just one example of how climate change can cause a chain reaction.

For the billions of people who live in “drylands”, climate change is serving up a completely different scenario:

“Heatwaves are projected to increase in frequency, intensity and duration in most parts of the world and drought frequency and intensity is projected to increase in some regions that are already drought prone.”

— IPCC report on Climate Change and Land, 2019

This is particularly worrisome as 90% of people in these arid or semiarid regions live in developing economies that are still very reliant on agriculture.

In addition to water scarcity, the IPCC has identified a number of other categories, including soil erosion and permafrost degradation. In all seven categories, our current global temperature puts us firmly in the moderate to high risk zone. These risks predict events with widespread societal impact, such as regional “food shocks” and millions of additional people exposed to wildfires.

This IPCC report makes one thing clear. In addition to tackling emissions in our cities and transportation networks, we’ll need to substantially change the way we use our land and rethink our entire agricultural system if we’re serious about mitigating the impact of climate change.

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