If D.C. residents vote to legalize marijuana possession next week, it wouldn’t just mean a sea change in drug policy in the nation’s capital. It could also mean big business. A study by District financial officials shared with lawmakers estimates a legal D.C. cannabis market worth $130 million a year. The ballot initiative voters will see Tuesday does not allow for the legal sale of marijuana — only the possession and home cultivation of small amounts — but D.C. Council members gathered Thursday to hear testimony about what a legal sales regime might look like.
Last week, NBC’s Today Show giddily announced an exclusive: Privateer Holdings, the Seattle marijuana company long acclaimed locally for its straight, corporate image and Ivy-League-educated bosses, was launching “the first global pot brand” based on the legacy of Bob Marley. The company is likely to start selling pot overseas, says Privateer public-relations director Zack Hutson, previously a spokesperson for Starbucks. “We’re in discussions with a distributor in Israel” – a country with a federally legal medical-marijuana system. Hutson also cites Uruguay and the Netherlands as potential early markets.
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.
Votes in Washington and Colorado last month to legalize pot for recreational use turbocharged marijuana as a legitimate business opportunity. Business people packed a marijuana-industry conference in Denver the day after the election, and shares of publicly-traded companies spiked — one that sells marijuana vending machines jumped 3,000 percent.
British Columbia’s multibillion-dollar marijuana industry could take a “significant” blow now that two U.S. states – including its closest neighbour to the south – have voted to legalize marijuana. “The outcome of these votes in Washington State and Colorado is going to be a significant factor for this industry here in British Columbia,” Werner Antweiler, a professor at the University of B.C.’s Sauder School of Business, said in an interview Wednesday.
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.
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.
The legal weed industry is trying to grow something else these days: political influence. The National Cannabis Industry Association has spent $60,000 lobbying Congress and federal regulators during the first nine months of this year — double its lobbying expenses for all of 2013. Its political action committee also shelled out campaign money to help politicians in tough midterm races, including Democratic Gov. John Hickenlooper of Colorado, where voters in 2012 approved the recreational use of marijuana.
A new report predicts that 18 U.S. states will have legalized recreational marijuana in the next five years, a huge increase from the four states that currently have or are in the process of creating legal markets for pot.
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.
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)
Only six months old, Colorado's recreational marijuana industry starts a transformation that could add hundreds of new pot businesses to the state and reconfigure the market's architecture. Previously, only owners of existing medical marijuana shops could apply to open recreational stores, and all businesses had to be generalists, growing the pot that they sold. Now, newcomers to the industry can apply for recreational marijuana business licenses. When these new businesses begin opening in October, all recreational marijuana companies will be allowed to specialize — for instance as stand-alone stores that don't grow their supply.
A report from Greenwave Advisors, a "comprehensive research and financial analysis for the emerging legalized marijuana industry," projects that legal cannabis could be an industry with revenues of $35 billion by 2020 if marijuana is legalized at the federal level. To put that figure in perspective, $35 billion represents more annual revenue than the NFL (currently $10 billion), and is roughly on par with current revenues for the newspaper publishing industry ($38 billion) and the confectionary industry ($34 billion).
Three marijuana legalization initiatives were on the ballot this week, and all three won. That’s a better outcome than I was expecting. I was surprised when voters in Colorado and Washington approved legalization two years ago, and I was surprised again when voters in Alaska, Oregon, and Washington, D.C., followed suit. Partly that’s because, after 25 years of advocating drug legalization (along with various other unpopular positions), I am accustomed to losing. But it’s also because I had looked at the polling data.
It looks like the use of recreational marijuana is heading down the path of legalization across the country. Voters in Alaska, Oregon and the District of Columbia approved legalizing measures on Nov. 4, but with key differences. Some say a profit-driven model for legalization runs the risk of increasing marijuana use, while others argue that a regulated market is the best way to keep use safe for consumers. What’s the right approach to legalizing recreational marijuana?