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Selling commercial cannabis from a seed bank

An Introduction to the Big Business of Cannabis Seeds

Cannabis seeds can produce widely different plants. And in anticipation of national legalization, the market is evolving quietly, but quickly.

Cannabis seeds are, obviously, integral to the weed industry. With so many growers around the world, they’re in higher demand than ever. As a result, a network of online and physical retailers has popped up to satisfy both legal and grey market needs.

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But increased demand and legalization are changing the seed business. How will the cannabis seeds market evolve with growing demand and more legalization efforts?

The 3 main typles of cannabis seeds.

There is a great deal of variety within cannabis seeds. Specifically, you can divide them into three main types:

Regular: These contain both male and female plants, meaning that half of the plants will not flower. This kind requires more light to begin flowering.

Autoflower: Autoflowering seeds begin flowering as soon as the plant reaches maturity.

Feminized: Seeds that only produce the flowering part of the cannabis plant i.e. the female part.

Aside from the type of seed, seeds differ genetically. This means that breeders have grown them into distinct stains that can produce a wide variety of effects. This is where the real value in cannabis seeds lies.

Why genetics matter.

Anyone who has ever consumed cannabis in any of its forms knows that strain matters. This goes beyond sativa vs. indica. Strains can be bred to produce a variety of effects and serve purposes that go way beyond flavor. For example:

High-CBD hemp seeds are ideal for creating potent cannabis oil.

Strains can be bred for pain management and other medical purposes.

Plants can be genetically altered for shorter, better yields.

Specific types of hemp create stronger, longer lasting fiber.

Not only is the ability to create products with distinct terpene flavor profile a great way to appeal to consumers, but the right genetics can produce vastly different effects with medical and economic advantages. And the more the medical and recreational markets grow, the more demanding consumers are of their weed products and the more competition there is when starting a cannabis dispensary or another type of business.

Who sells cannabis seeds.

Anyone can sell cannabis seeds but not all vendors are legal. International drug laws do not strictly regulate cannabis seeds because they have a variety of uses — animal feed, oil production, clothing material — but some countries are stricter about their importation than others.

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Like the sale of growing equipment, cannabis seeds are adjacent to the weed industry but not strictly apart of it. This makes controlling or even studying the market difficult.

Different types of vendors.

According to one scientific paper published by the United Nations Office on Drugs and Crime, there are three different components to this business:

1. Seed companies: Seed companies produce the seeds. The majority are based on the Netherlands or Spain due to their more lenient laws. There are around 122 large scale seed companies in Europe, according to the UN’s research.

2. Breeders: Breeder cross-breed strains to create new ones. They can work for seed companies or conduct their own experimentation.

3. Resellers: There are many more resellers than either of the above two categories. Resellers will often sell product from a variety of companies and can inhabit a legal grey area, catering to black market weed vendors as well.

Marijuana law remains hazy. Today, an increasing number of companies are patenting weed technology, seeds, and the hottest cannabis products. But whether those patents are enforceable, and where they are enforceable within the U.S., remains to be seen.

Plant breeders’ rights

Since the 1960s, plant breeders can have exclusive control over a new variety of a plant they create for twenty years following a submission to the plant variety office. Control over everything from seeds to cuttings is given to that breeder for that period of time if that office decides that their plant is genetically or physically distinct. As a result, plant breeders’ can technically have unique rights to the cannabis seeds they breed.

In the U.S., you can also patent genetic varieties of any plant. This includes cannabis seeds. Though the U.S. Patent and Trademark Office is federal, it operates independently of other government agencies. This means that you can patent weed strains, and many companies have done so already.

However, even if someone does rightfully own a patent of a certain type of seed, that doesn’t mean that their patent is enforceable nationwide.

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According to the United States Patent and Trademark Office, you can patent asexually reproduced plants if they possess certain characteristics due to their genetics or if they’re a hybrid version of a different plant. According to one Reuters report, 39 cannabinoid-related patents were filed in 2018. Cannabinoids are the compounds found in weed that vary from strain-to-strain.

The vast majority of these patents went to drug companies. A few went to universities and other entities.

Another industry that will boom post-legalization.

Cannabis law is still under development. However, entrepreneurs and big companies alike are increasingly patenting a major element that can set their product apart from the rest: cannabis seeds. With the rights to a signature strain, there are two things that can be done:

Sell them over the internet or in stores to the increasing number of growers and individuals looking to produce their own weed

Today, people all over the internet are selling cannabis seeds with little to no oversight but, seemingly in anticipation of legalization, corporations are striving to control everything from plant genetics to technology. This could help certain ahead of their time companies could control major industries like CBD — all thanks to seed patents they’ve filed today.

Buying Cannabis Seeds

While some cannabis businesses focus on selling pre-processed products, others involve growing plants from seeds. States often allow their citizens to grow a certain number of marijuana plants for personal use without getting a license. However, commercial cannabis cultivation generally requires getting a license from the state and sometimes local regulatory authorities. Depending on the location and the scale of the operation, this process may be straightforward or exhaustive, but it is critical to comply with all applicable rules to ensure that your business operates within the law.

Rules frequently change in the cannabis industry as it continues to evolve. Moreover, operating in an industry that remains illegal under federal law can create pitfalls of which business owners should be aware. If you have questions about entering the area of cannabis cultivation, you may want to consult an attorney who has advised similar businesses.

Some people purchase these seeds for purposes unrelated to the cultivation and sale of marijuana. Traditional legitimate uses of cannabis seeds include bird food and fish bait. A state may allow its citizens to purchase cannabis seeds for these purposes, even if it does not allow them to purchase seeds for marijuana cultivation.

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Purchasing Cannabis Seeds in Your State

A cannabis cultivator should try to buy seeds in their state if they can. For example, they should be able to get seeds from a seed company or dispensary. The cost tends to vary dramatically depending on the quality of the seeds. While some ordinary strains may cost less than $100, higher-quality strains may cost several hundred dollars. A purchaser of cannabis seeds should make sure that they buy seeds from a fully licensed and authorized provider, even if this results in greater costs. Employees or managers of a seed company or dispensary may be able to advise a purchaser on any legal compliance issues.

Purchasing Cannabis Seeds Outside Your State

If their state does not offer ideal options for purchasing cannabis seeds, a grower might consider purchasing them in another state that permits these transactions. However, the grower might face problems in bringing the seeds to their state. This is because the federal government still criminalizes marijuana. One of the federal marijuana crimes involves transporting the drug or substances related to it (such as seeds) across state lines, even if both the origin state and the destination state have legalized cannabis activities. Federal prosecutors do not often charge this crime in connection with marijuana businesses, but the risk remains.

Some cannabis cultivators even consider purchasing their seeds outside the US, such as in the Netherlands or another nation with a strong foothold in the international marijuana industry. When the seeds arrive in the US, though, immigration authorities likely will confiscate them because bringing marijuana-related substances into the US violates federal law. The law of the state where the flight arrived makes no difference to this outcome.

Some cannabis cultivators prefer to buy their seeds online through a seed bank. State law may permit online purchases and shipping, but again the cannabis seeds might be confiscated during transit. In rare situations, a cannabis cultivator might even face criminal charges under federal law. Enforcement in this area tends to be unpredictable and subject to frequent, radical policy changes.