Tuesday, February 18, 2020

This Milwaukee company rolls thousands of CBD joints every day and is bringing in millions

From JSOnline:

, Milwaukee


From 6 a.m. to 6 p.m., dozens of workers at a production facility on the west side of Milwaukee crank out and package hundreds of thousands of Vance cigarettes each day.
It's not tobacco that they're rolling. The cigarettes bearing the Vance brand are made with hemp and they're sold as CBD "joints," yet another new item in the exploding market for CBD products.
Vance cigarettes are marketed as "guilt free smokes." You don't get high as with marijuana joints, but customers enjoy a nicotine-free product with the benefits (anti-inflammatory, anxiety-relief) touted by other CBD products, according to manufacturer Vance Global Inc.  
It's a message that's caught on quickly.
In just over a year, Vance Global has sold around 4 million CBD joints, said co-founders August Battles and Brandon Marhal.
"We were going to do it as an after-work thing to make money on the side," Battles said. "It ended up blowing up." The young founders, fueled by Red Bull and McDonald's, think they've started the next Juul, the company synonymous with electronic cigarettes.
The Vance founders aren't alone — Marhal's dad and brother have both entered the market with competing brands.


Vance Global had about $3 million in revenue last year, according to the founders. That's expected to soar to $15 million this year, they said. Vance cigarettes are sold in 46 states at around 14,000 stores, Battles said. 
At the production facility off South 38th Street in Milwaukee, workers decked out in teal lab coats and black gloves roll and hand pack the cigarettes into boxes of 10. They're sold at smoke shops, convenience stores and gas stations across the country. A pack of their all-natural blend typically sells for $14.99. 
The hemp arrives in monthly shipments — around 12,000 pounds at a time — from farms in Wisconsin and Oregon. The non-psychoactive marijuana plant is separated from its seeds, sifted and then stuffed into paper by cigarette machines retrofitted to handle the sticky plant.
Nearly all of Vance sales — 98% — are retail. Vance blends into the hemp lavender imported from France that the company says provides additional benefits to users.
Marhal's father and brother are making their own brands of hemp cigarettes. Some smoke shops sell all three Milwaukee-based brands — Vance, Lifted Living and Alto Heights.
The U.S. market for CBD products is around $4 billion, according to estimates from market research company Brightfield Group. Hemp already rolled into paper and loose hemp flower is just a small segment of the overall CBD market but it is growing, said Virginia Lee, a CBD market researcher for Brightfield. 
Preroll hemp and hemp flower was a $71 million industry in 2019, according to Brightfield. That was a 528% increase from 2018. 
"Vance Global is one of the top players," Lee said. Other top sellers in the hemp smokes field include brands like Hemptrance, Colorado Pure and Wild Hemp. 
Brightfield forecasts the industry's growth will slow, although it predicts 91% growth in sales of hemp cigarettes and hemp flower in 2020. 
Products like hemp cigarettes are not subject to federal regulation. The Food and Drug Administration has not made a definitive ruling on the safety of CBD products. 
The State of Wisconsin oversees and licenses companies such as Vance Global that grow or process hemp. Some states have outlawed smokeable hemp. Louisiana, Indiana, Kentucky and North Carolina have restricted the sale or production of smokeable hemp. 



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