For Amazon, it would be yet another step to keeping consumers within its retail sphere. Buying Whole Foods was, at first, a bit of a head-scratcher for Wall Street and investors. However, nearly two years after the purchase was announced, the logistics are making sense. Whole Foods gives Amazon access to more than 400 distribution nodes throughout the country and, more importantly, provides another means of keeping consumers in their universe, much in the way grocers build gas stations or content providers bundle television, internet, and phone packages.
And third, there’s the big problem of convenience. The allure of Amazon’s e-commerce platform is that you can manage your shopping needs from the comfort of your couch or bed. While online cannabis delivery networks do exist in the U.S., there’s the uncertainty associated with ensuring that the product stays out of the hands of minors.
Image source: Getty Images.
As the industry evolves, so must the companies that operate within it and around it.
Even nontraditional companies are adapting. DSW (NYSE:DBI) , the designer shoe retailer, announced in January that it would be carrying nearly 55,000 units of cannabidiol (CBD) topicals from Green Growth Brands (OTC:GGBXF) in 96 of its U.S.-based stores. CBD is the nonpsychoactive cannabinoid best known for its perceived medical benefits. DSW decided to push into CBD-rich topical creams, muscle balms, and body lotions after 74% of Green Growth Brands’ Seventh Sense line of products sold in 10 of its DSW test stores over a 10-week period. As noted, since these are high-margin alternative products, DSW can reap substantial rewards while taking up minimal floor space, while Green Growth Brands gets increased exposure at a point when market share is still very fluid.
Check out the latest earnings call transcript for Amazon.
Aside from simply aligning with Mackey’s political views, carrying marijuana in Whole Foods stores would make a lot of sense. Whole Foods traditionally targets a more affluent clientele that’s less resistant to economic hiccups that occur from time to time. Carrying high-quality cannabis and niche alternative products, which speaks to Whole Foods’ emphasis on organic and natural products, would simply be an extension of what it already does.
For instance, dried cannabis flower has often been viewed as the most popular product of the cannabis revolution. But it’s also been the easiest to oversupply and commoditize – at least in the states of Colorado, Washington, and Oregon, which were among the first in the U.S. to give the OK to adult-use consumption. As a result, growers in both the U.S. and Canada have shifted their production lines to include higher-margin pot alternatives (where legal). These include cannabis oils, vape products, cannabis-infused beverages, concentrates, sublingual sprays, and even edibles.
A Whole Foods Market in Plymouth Meeting, Pennsylvania. Image source: Whole Foods Market, a subsidiary of Amazon.
John Mackey, CEO of Amazon subsidiary Whole Foods, sees the organic grocer pushing into cannabis sooner rather than later.
K2 has spurred typical posturing on the part of politicians. (Missouri State Rep. Ward Franz’s statement, “We don’t know much about this, but it’s going to end up killing somebody,” is, in itself, an oxymoron.) But the real reason that K2 has caught people’s interest is because of how reflects back on regular marijuana, or what dedicated smokers refer to as “God’s herb.”
“I trust marijuana,” says Craig X Rubin, outspoken pot-legalization advocate and marijuana consultant to the Showtime series, Weeds. “I don’t trust K2.”
Even family-friendly Amazon.com sells a handful of “premium incense” blends through its Marketplace sellers. Incense has always served as a smokescreen for substances that are not just lit in the corner of a room, but also rolled-up in a sheet of Zig-Zag. An herbal mix called Passion Flower is the number one seller in the “Everything Else” category on Amazon, along with “tobacco” pipes, rolling paper, and bongs. Another product, called Blueberry Haze, is marketed as “the new standard in legal herbal hybrid buds.” The product description reads, “This isn’t the haze your [sic] gonna want to share with your friend once you smoke it.”
For all these reasons, it’s hard to imagine that K2 would exist if it weren’t for marijuana being illegal. One 23-year-old former drug user notes that someone would only choose a “fake” alternative, even a legal one, “if it was cheaper, and worked as well or better than the illegal stuff.” For drug users of most levels, she noted, “Cost, effectiveness, and availability are far more important than the legality.”
“I would never smoke mystery shit—are people aware of what they’re buying?” asks a film and television producer in Los Angeles. “Why would you smoke some synthetic substance when one of the most appealing factors of marijuana is that it is all natural?”
The science of JWH-018, the synthetic chemical sprayed onto most of these “herbal blends,” has been around for about 15 years. First synthesized by Clemson University chemist and professor John W. Huffman (hence the “JWH”), the chemical was created to see if the therapeutic effects of THC, the active ingredient in marijuana, could be mimicked. Eventually, the recipe was stolen and the substance began turning up in incense that supposedly produced a calming effect in those who enjoyed it, mostly in Canada and across Europe. It wasn’t long, of course, before someone decided to smoke it.
How dangerous K2 actually is remains murky. The drug became news when it reportedly spurred 59 calls to U.S. poison centers since the beginning of this month. Then a toxicologist in Missouri announced he’d seen thirty teenagers in six weeks flow through local emergency rooms, tripping on the drug. On March 10, Kansas became the first state to ban the substance, and similar bills in other states are working their way toward law.
The science behind the psychotropic effects of the JWH-018 compound is not yet complete. JWH-018 appears to excite the same CB1 and CB2 receptors that THC does. Unlike natural weed, however, the synthesized version is four times more potent when binding with CB1, and seems to have a three-fold preference for the CB1 over the CB2 receptor. This is relevant because it is the CB2 receptor that gives marijuana its medical properties—it affects pain and inflammation levels in the body. It thus appears as though K2 may provide a potent high, it lacks the medicinal properties that helped legitimize the pot-legalization movement.
It’s not often that Rubin finds himself in the same camp as conservative lawmakers, but that’s where he landed this month when a drug called K2 found its way into the national spotlight. An herbal mixture sprayed with a synthetic drug that is supposed to approximate the effects of marijuana, K2—legal and available online—has local legislatures racing to criminalize it.
As California takes a big step toward legalizing marijuana, a synthetic—and legal—form of pot is getting attention. Kia Makarechi on why "K2" is feared by potheads and conservatives alike.