There are new projections for the economic future of the marijuana industry being released all of the time, and those projections are HUGE, and seem to grow with each new projection. This has led to investors flooding the industry, similar to the flood that occurred during the dot com boom. New businesses are being created daily, and there is no end in sight. Everyone wants in, and most businesses are claiming that they are absolutely crushing it with no end in sight.
But a question that I often ask is ‘how much of it is real’ when it comes to the biggest businesses in the industry? I have been doing this for almost six years now, and have had a front row seat to watch the industry grow, and get sent behind the scenes information all of the time. If there’s one thing that my observations have shown me, it’s that so many of the largest players in the industry are built on smoke and mirrors. They will brag about their massive profits, but will never release any proof to back those claims up.
These people and their companies are not hard to spot. They spend more time bragging about how much money they have (again, with no proof, which they guard with their lives) than they do actually working on making their company’s products and/or services better. Just ask them for a donation for a campaign or reform effort and you will see how fast they go from bragging about being a baller to explaining how strapped they are for funds currently. Trust me, I see it happen all the time.
The fact of the matter is that most of these ‘big marijuana’ companies are just hype. Sure, they are great at issuing press releases, their pitch decks are polished, they have funders and investors, they wear expensive suites and have coiffed hair. But at the end of the day they are just polished turds. They spend more time polishing that turd than they do trying to figure out how to replace their turd with something that people actually want to buy and/or use. It’s not coincidence that they fizzle fast. The money that you see is investor money, and once the company burns through that money (burn rate for any Silicon Valley show fans out there), they are forced to close down. And you better believe that there is no press release when the company fails, just a very quiet exit.
My problem with these companies is not that they are just hype machines. Hype machines are nothing new to the marijuana world. People have been over-hyping stuff in the marijuana world since probably the beginning. What I do have a problem with is that these coiffed hair types are coming into the industry, pushing all the little companies out who actually care about marijuana and actually have good products and services. But since they can’t compete with a well funded turd polishing machine’s bullying tactics, they are forced out of the industry. That is just to be followed by the big company flopping because no one actually likes what they are selling.
If all the industry becomes is big companies that spend huge amounts of investor money on hype, push out quality smaller companies, then fizzle themselves, the industry is not going to be as bright as people think. What makes an industry succeed in the long haul is consumers supporting businesses that have products and services that can stand the test of time. That was a big problem with the dot com industry – too much over-hyped crap entering the sector that people invested in, that crap was never embarrassed by consumers, and the bubble popped.
I don’t think that the ‘marijuana bubble’ would be as large as the dot com bubble because after all, people LOVE marijuana. But at the very least good, hardworking people will get pushed out of the industry, and consumers won’t be able to buy their quality products. I’m seeing this happen in Oregon right now as investors flood the state. I’m seeing people that have been living off of their niche business being forced out by larger companies with inferior products.
I’m not a business wizard (did I mention I work in a cubicle to make ends meet?) but I do have to eyes and a brain, and with the amount of money that these larger companies are spending in Oregon to hype their stuff versus how many people are actually buying that stuff, a lot of those companies won’t be around in a year or two. So the end result is that no one makes money, not even the larger company, and no one wins. That is unacceptable to me.
Why don’t we avoid all of this? Why don’t we make the marijuana industry different than other industries? With the industry being so new, we have a golden opportunity to go a different route. Support small businesses in this industry. Small business owners are not greedy like large companies who only care about the bottom line so that they can appease investors. It’s been my experience that small business owners are much nicer than corporate types in this industry. I have never had a small business owner try to stab me in the back in this industry, but I have plenty of scars on my back from interactions with ’successful industry leaders.’ It’s been my experience too that small businesses are more likely to support the cause, rather than just claim to do so like big companies.
I don’t want to see the ‘Wal-Mart of Weed’ or any other corporate giant takeover of the industry. Big business has ruined many other industries. Let’s make sure that doesn’t happen with marijuana, because unlike the other industries, the future of the marijuana industry is largely tied to the future of marijuana reform. This isn’t a matter of where can we get the cheapest TV – people’s freedoms are on the line, and that should be taken very seriously.