The Booming Marijuana Industry: The Next Dot-Com
I recently had the privilege of attending the very first national conference of the relatively young (they were founded in 2010) National Cannabis Industry Association (NCIA). NCIA is the first national trade organization focused on the entire cannabis plant. It was also my first visit to Denver since stores opened up in January, and the feelings of freedom and anticipation for the future were palpable.
Some call the NCIA “Big Pot”. In some ways they are probably right. But the truth is, the fight for legalization still has a long way to go, and no one represents “Big Pot” yet. There were many suits and ties in attendance, and there is no doubt that a few of those same persons are going to eventually make it big in the new marijuana industry. I heard over and over, “this is the next dot-com!” So buyer beware.
Believe it or not, very few people are making a large profit from this new market in Colorado so far. Yes, the tax revenues are coming in from large quantities being sold. But starting a new business is never easy, much less one for a market that has been underground for decades. State regulations are constantly changing, and until the federal government backs off from supporting hardline prohibition, it’s going to be a bumpy ride for entrepreneurs trying to make a living in the cannabusiness world.
Currently two major federal issues are making havoc for the life of the marijuana business owner, and addressing them is of primary concern to NCIA members. First, is the inability to work with any major financial institutions. Because they are federally regulated, banks are reluctant to work with marijuana operators. Paying bills, paying employees and maintaining a safe environment with no banks and all cash is nightmare to a small business owner. And you can forget about loans.
The second issue relates to Section 280E of the Internal Revenue Code, which forbids businesses involved in “drug trafficking” from taking tax deductions for normal operations. Travel costs, insurance, and office supplies are just a few examples of costs that can add up quickly.
I saw many doe-eyed hopefuls this past month, jumping into the maelstrom of the new “green rush” and hoping to realize the dreams of generations of marijuana enthusiasts. There were booths showcasing oil extraction equipment, marijuana body products, business consulting services, lighting systems and more. There were poachers, too. There was a booth you could get into to grab flying money (tickets worth up to a total of $500) if you were the lucky winner. There were people from around the country and around the world wanting to learn how to become “ganjapreneurs,” mostly to grow and sell their own marijuana or to create the first branded product of edible/lotion/equipment/technology.
I can see there is a real danger that crony capitalism will work its way into a world which I have known for so many years as “the cause” and a movement to make the world a better place. Money can be so corrupting. And I know this fact is the basis for much of the fear we hear from Project SAM, Think Again Missouri and other groups trying to halt the turn toward legalization. But for the same reason that money is corrupting, I fear the slimy underbelly of the current, illegal market much more than I fear the potential of a legal and accountable cannabis market. I’ll take “Big Pot” over “La Familia” any day.
While we no doubt have many interesting challenges to face as policies change and the industry evolves, I am grateful to have heard repeated by the speakers and leaders at this event that we are still in a fight for justice. While amazing opportunities are arising in the economic sector, we cannot and must not stop working until there is freedom for the hundreds of thousands who are locked up each year for marijuana around the world.
Finally, over the course of the two days, one question came up over and over again, and the answer was always the same. I suspect that many of the readers of this newsletter have the same question, and so I will share this departing wisdom with you.
Q: How can I be successful in the cannabis industry by owning a dispensary/growing marijuana/selling my product/etc.?
A: Learn the rules and regulations and get involved with the people who are working to improve the laws in your state!
If you want to be part of the future marijuana job market and you haven’t given to the Independence Day Money bomb, consider your investment in the future by supporting Show-Me Cannabis with a one-time contribution or by becoming a monthly donor. We mean business!