Last week, the White House Office of Management and Budget published a proposal in the federal register in which it provided policy recommendations for next year’s North American Industry Classification System (“NAICS”), which is utilized in the compilation of data on markets across Canada, Mexico and the United States, as well as in the classification of businesses.
In a series of recommendations, the federal economic committee stated that the cannabis industry would keep growing, noting that steps needed to be taken to make certain that the growth was tracked under a system that would allow analysts to publish statistical data and follow the markets. The recommendations include a suggestion to categorize marijuana retailers under a new category where they would be grouped with smoking, e-cigarette and tobacco shops. The committee also suggested that marijuana wholesalers and CBD agriculture and hemp firms be classified into different categories as well.
These moves show that the federal economic panel is recognizing the cannabis sector’s growing legitimacy and is working to make it easier for economists to conduct research on the space, similar to other business categories.
The U.S. Economic Classification Policy Committee, which is made up of the Bureau of Labor Statistics, the Bureau of Economic Analysis, the Census Bureau and the Office of Management and Budget, considered prior public comments that had called for the committee to restructure the North American Industry Classification System, with reference to marijuana retailers. Among the comments was one that proposed that vape shops and cannabis retailers be split in terms of their classification.
In response to this comment, the committee stated that there was sufficient evidence proposing that the retail market for recreational and medical cannabis, e-liquids, e-cigarettes and related accessories would continue its growth, even with increasing regulations at both the state and federal levels. The committee further explained that as both cannabis and vape shops mainly engaged in the retail of smokers’ supplies, the committee would establish a new industry that would combine Industry 453991 with cannabis stores and e-cigarette shops, which are currently categorized under Industry 453998 by NAICS.
Apart from this, the Economic Classification Policy Committee also recommended that the wholesaling and agricultural categories under NAIC be updated to include hemp and marijuana as matching index entries. The committee then advised that CBD index entries be added to the following categories under NAICS: 459999, 424690 and 325998. The panel is also planning to alter the North American Product Classification System to take CBD into account.
The observations of the committee regarding the growth of the CBD and marijuana industries are solid, given the rate at which innovations, such as the medicinal cannabinoid formulations undergoing trials by companies such as XPhyto Therapeutics Corp. (CSE: XPHY) (OTCQB: XPHYF) (FSE: 4XT), are popping up.
NOTE TO INVESTORS: The latest news and updates relating to XPhyto Therapeutics Corp. (CSE: XPHY) (OTCQB: XPHYF) (FSE: 4XT) are available in the company’s newsroom at https://cnw.fm/XPHYF
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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