During my childhood, it was forbidden to even talk about marijuana in public. The mention of it would cause heads to turn and people to “hush” you. As an illegal drug, it was part of our childhood that everyone tried, and I mean everyone (Bill Clinton is a liar). As an illegal drug, there was no way to “legally” make money from it unless you ran a magazine (High Times) or sold pipes out of your head shop. Now, legalization, decriminalization, and medical uses have turned a once illegal money maker into a very profitable business that is here to stay.
According to ProCon.org, there are currently eighteen states along with the District of Columbia that have legalized medical marijuana in some form. As of February 21, 2013, there are currently eight additional states that have pending legislation. Yahoo Finance also recently published a press release from Hemp, Inc. which detailed how industrial hemp and medical marijuana related stocks have been creating a massive volume of buying as of late. Yahoo Finance still recommends avoiding these stocks, but still…there are marijuana related stocks trading on the U.S. stock market. When did this happen?
What once was an industry where the actual revenue was an estimate (as it was illegal), the actual revenue from the industry is now a common talked about figure. The Long Beach Business Journal estimated that the medical marijuana industry alone is worth approximately $1.7Billion. They also estimate that it could grow to as high as $9Billion in the next five years. Now that it is “legal” to grow, buy and sell marijuana, there is nothing to limit its growth. As with every other taboo industry in the United States (e.g., alcohol during prohibition, gambling), it will likely skyrocket now that there are no barriers for it.
Opportunities In The Private Sector:
Due to legislation, the legalization of marijuana is also creating an opportunity for private sector entrepreneurs. In the state of Washington, certain facilities that give instruction on plant and produce growing methods are forbidden to give instruction on growing marijuana. In a recent article in the Newser, Brian Clark from Washington State University stated, “We can’t go there. It violates federal law, and we are a federally funded organization.” As many training facilities for growing are federally funded, they face losing federal funds if they engage in any form of training on marijuana growing. This has opened up the market to “roll your own” type growers who have started websites, blogs, and local classes to help educate people (for a small fee, of course).
Another industry that is set to boom from marijuana is the rolling paper industry. “In the U.S., especially in more conservative states, whether they were for legal tobacco or not, they were often demonized,” said Penn Way, manager of Jaspen Rolling Papers. “Cigarette rolling papers have been a very, very common consumer product in Europe for more than a century. Now, as the laws change, they are becoming more and more popular in the United States.” Way left a solid career in the marketing field to start his own business. After seeing the potential for the rolling paper market and taking his experience in marketing, he has turned Jaspen Papers into one of the more respected rolling paper brands in the United States.
Way has also taken the rolling paper market into a new direction. “Jaspen isn’t perfect, but we are aware of how the industry affects the rest of the world and we take steps to mitigate the impact.” Way’s company sells natural rolling paper that comes from managed husbandry and FSC-certified sources. The company also gives back 3% of its profit to non-partisan causes like international micro loans to female entrepreneurs, disaster relief, environmental rehab projects and U.S. community radio stations.
While growers and accessories manufacturers are sure to benefit from the industry, there are a few unlikely beneficiaries who are cashing in as well. Many media outlets are also jumping on board as they can publish articles on the topic in an attempt to earn more from advertising revenue. In addition to the magazine High Times increasing their readership, others have tried to capitalize on the industry. CNBC has guide on their website called “Marijuana and Money – An Insider Look Into This Multi Billion Dollar Industry,” with articles relating to the marijuana industry. Time Magazine runs marijuana as one of its topic keywords and the New York Times has hundreds of articles on the topic.
Although this is debatable by many in the federal, state, and local government, they are their own beneficiary of the industry. In a recent article in the Washington Post, it was stated how the marijuana industry in the U.S. will affect Mexican drug cartel. Less money can now be spent on drug enforcement efforts as there will be less marijuana coming across the border into the states where marijuana is now legal or decriminalized. It is effectively starting to tear apart Mexican drug cartels (although they have other drugs to import).
Regardless of your view on the legalization or decriminalization of marijuana, one thing is for sure. Get used to it because it is here. As with alcohol in the early 1900s, barriers have now been lifted and opened the doors to for entrepreneurs to reap what they sow, literally.