The growing societal acceptance of cannabis in the U.S. has sparked what some call a "green rush" of people trying to cash in on what is already a multi-billion-dollar business. And as the marijuana industry comes out of the shadows, its producers, consumers and advocates are pushing for more transparency – both about cannabis' alleged medical benefits and its environmental impacts.
Many Washington residents are looking to cash in on the newly legal and potentially lucrative marijuana market, which they hope will give them a new start, create jobs, and boost Washington's slumping economy. A diverse bunch, prospective marijuana entrepreneurs range from cannabis novices to experienced sellers crawling out of the black market. State officials are unsure how much revenue marijuana will bring because the market has never been regulated. But experts predict the industry could fetch up to $2bn over a five-year period.
A number of businesses in the burgeoning U.S. cannabis industry are trying to enlist Wall Street's help. Some entrepreneurs see marijuana heading down the same path as Prohibition, which banned the manufacture, transportation and sale of alcohol from 1920 until it was repealed in 1933. "More and more people see the inevitability," said Brendan Kennedy, chief executive of the Seattle private equity firm Privateer Holdings, which targets cannabis-focused start-ups. "They see that the Berlin Wall of cannabis prohibition is going to come down."
Washington state’s chief pot consultant remains a bit mysterious, but Mark Kleiman's views on legalizing pot are no mystery. He lays them out in “Marijuana Legalization,” a 2012 book he wrote with three of his team members. Alison Holcomb, the law’s author, said Kleiman’s credentials could ease federal concerns about Washington’s system evolving into an industry that tries to create addictions and market to young people. “I’m glad Kleiman and his colleagues are heading up the consulting group,” she said. (See also: Washington touts credentials of new pot consultant)
The cannabis industry is an easy target for legislatures to saddle with heavy taxes. In Washington State for instance, there is a 25% tax at three different stages of cannabis production: from the grower to the processor, from the processor to the retailer, and the retailer to the customer. These taxes are in addition to any other state or local sales taxes that might apply. Oregon Representative Earl Blumenauer, for instance, has introduced marijuana reform legislation that would enact a 50% excise tax on production.
A handful of legislators recently drew up a letter raising questions and concerns about the law, including whether it can be implemented by December as required under voter-approved Initiative 502. Alison Holcomb, drug-policy director for the ACLU of Washington and one of the law’s sponsors, defended it in a point-by-point response to the letter. Holcomb also implied that some of Hurst’s concerns could lead to a “Big Marijuana” industry whose advertising targets young people.
The Washington state Liquor Control Board (LCB), charged with launching the world's first regulated marijuana market for social use, expects to begin accepting applications for grower licenses April 17, with the first licenses to be issued in May 2013. State-licensed marijuana stores won't open until at least December, after marijuana-processor and retail licenses are issued. But several groups already have hired veteran lobbyists to influence the LCB, with business interests keenly aware of the potential.
Vigorous regulation of a thriving medical-marijuana industry in Colorado offers the best glimpse of what is coming to Washington when it launches its voter-approved social-use market. With continuous surveillance, bar-coded plants and strict financial background checks, Colorado's rules allowed capitalism to be unleased, creating an instant $200 million industry. With retail prices — averagingabout $7.50 a gram — among the cheapest in the country.