What’s next for the marijuana industry? Six states voted to legalize marijuana in some form, with California, Massachusetts, and Nevada voting to legalize adult-use, or recreational cannabis, while Arkansas, Florida, and North Dakota legalized medical use. Now the US has 29 states with legal medical marijuana, and at least seven states have legal recreational pot markets.
The legal marijuana industry could generate roughly $22 billion in annual sales across the US within four years.
At the same time, there is some cause for concern over what Donald Trump’s surprise victory could mean. Would the president-elect’s administration go against the will of voters in an ever-growing number of states? Trump has previously voiced support for legalized medical marijuana, but Vice President-elect Mike Pence is an opponent of cannabis legalization. So are New Jersey Governor Chris Christie and former New York City Mayor Rudy Giuliani—both of them close advisors to Trump, as well as Sen. Sessions, Trump’s choice to Attorney General.
“The prospect of Donald Trump as our next president concerns me deeply,” Ethan Nadelmann, executive director of the Drug Policy Alliance, said in a statement to The Washington Post, citing Pence, Christie and Giuliani. The legalization advocacy group Marijuana Majority quickly launched a post-election petition calling on Trump to end the federal government’s marijuana prohibition and to honor his pledge to respect states’ rights with regard to marijuana laws.
Meanwhile, though, business owners and investors in the cannabis industry reacted enthusiastically to the latest wave of marijuana legalization votes this week:
Investors Jumping In
Brendan Kennedy, co-founder and CEO of cannabis company Privateer Holdings: Kennedy’s firm Privateer was the industry’s first to raise more than $100 million in total financing. Now, he told Fortune, he’s seeing an explosion of interest. There is, he says, “a fear of missing out” as legalization efforts across the country continue to open new markets. “Three to six months ago, we started being approached by firms who would have never looked at making an investment in this industry a year ago and who, frankly, we would have never imagined making an investment in this industry six years ago,” Kennedy said. “But, they’re all in the industry now.”
California the Epicenter of Cannabis Industry
Giadha DeCarcer, founder and CEO of New Frontier Data: DeCarcer’s New Frontier partners with the ArcView Group to produce an annual report estimating the size and scope of the nascent legal marijuana industry. On Tuesday, a joint release from New Frontier and ArcView projected that California’s legal marijuana market could reach $7.6 billion in annual sales by 2020 alone. California, with its population of more than 38 million people, is now “the new epicenter of the legal cannabis industry,” she said, adding, “As both the oldest medical cannabis state and the largest cannabis consumer population, sales in California are projected to dwarf those of any other market. Additionally, the integration of California’s technology and marketing expertise will be enormously into the cannabis industry both domestically and internationally.”
Troy Dayton, CEO of ArcView Group, said in a statement that California’s vote to legalize recreational cannabis will be the “vote heard ’round the world” and will be creating a “seismic shift.”
A ‘Bipartisan’ Issue
Steve Deangelo, co-founder of Oakland-based dispensary Harborside Health Center (and president of ArcView) told Fortune that he prepared for California’s long-expected decision by planning a business expansion that includes expanding into cultivation while also planning new Harborside locations in California (the company currently operates locations in Oakland and San Jose).
He also pointed out that some of the states that voted to legalize cannabis, such as Arkansas and Florida, also voted in huge numbers for Republican president-elect Donald Trump. “The only way that could happen is for a very significant number of Trump voters—red voters, Southern voters—to vote in favor of cannabis reform. And, if you look at what happened yesterday (election day) as a whole, I think what you see is that cannabis reform was the one issue that was able to cut across party lines and unite voters in a bipartisan consensus.”
New Regulations Coming
Henry Wykowski, a San Francisco-based attorney and a former Justice Department prosecutor, expects California lawmakers will produce “more well-defined regulations” for the state’s legal cannabis market now that recreational pot will be legal to grow and sell.
Nicholas Vita, CEO of medical marijuana dispensary operator Columbia Care, a company operates medical dispensaries in Arizona, Massachusetts, and New York, also said he thinks that the votes show “the need for the federal government to take a step back” and “consider adopting a long-term, data-based analytical process to determine whether or not the merits and the observations and the risks and the concerns that different stakeholders have are validated or invalidated, and to really come up with an informed federal policy” that would reshape the federal government’s current regulations on marijuana, which is currently listed as a Schedule 1 drug.
Another ‘Green’ Rush Is Coming
The approval of California’s Prop 64 will make that ‘Green Rush’ accelerate, opening up the industry to a wave of new investments. Big money is about to come in, and California is the large domino that allows banking and de-scheduling to finally happen, while creating a wealth of opportunities for entrepreneurs, business owners and investors.
For more information on what’s next for the marijuana industry, or how to capitalize on the green rush, and the rise in the cannabis industry, contact Denver Consulting Group at: www.denverconsultinggroup.com.