By Julie Patterson, Business Correspondent
US Representatives Ed Perlmutter (D-CO), Denny Heck (D-WA), and 16 cosponsors introduced The Marijuana Business Banking Act, HR 2652, in Congress July 10 to address the multiple concerns cited by financial institutions when denying or revoking the accounts of state-legal marijuana businesses and owners. Stronger measures will ultimately need to be taken to fully support legalization so that cannabis can be sold without compromising federal law, but many entrepreneurs already see ground-floor opportunities in the industry.
Investors seek to develop marijuana brands
With the latest legalization strides gaining headline news in the media across the US, investors are beginning to show interest in developing cannabis as a commercial brand. Jamen Shively, who headed up Microsoft’s corporate strategy department for six years, is seeking investment to the tune of $10 million to develop a successful cannabis brand in Washington State. Shively is hoping to build a powerful name, similar to the branding of Starbucks, and that he will be able to eventually legally import cannabis from Mexico
The global marijuana trade has been estimated by the United Nations to be worth $142 billion and, despite the plant remaining illegal in the US under federal law, two states have legalized marijuana for recreational use after voters approved it in 2012. Washington State and Colorado have moved beyond allowing marijuana to be administered as a medicine, which 18 other states do, and have managed to pass this latest law at a local state level. Users over 21 are able to consume the herb for recreation, and, according to the New York Times, this is a significant step as it means that the legalization of marijuana nationwide moves closer and closer.
Shiveley’s marijuana headquarters
Shively’s plans are to establish headquarters in Seattle, but he realizes that he will have to comply with U.S federal law and abide by local regulations that exist in the two legalized states. Shiveley’s advisor at his recent news conference was the former president of Mexico, Vicente Fox, who said that the legal sales of marijuana would be an ideal alternative to the illegal selling by Mexican drug lords. The Democratic representative of Washington State, Reuven Carlyle, supports the initiative and claims that cannabis branding was an inevitable move.
Shively has bought the rights to dispensaries in Colorado, California and Washington State, including the Northwest Patient Resource Center. He plans to create separate brands for medical and adult-use markets and is keen to explore the plant’s concentrated oil as a treatment for cancer and other illnesses and intends to fund studies to develop this.
Entrepreneurs begin investing in marijuana
The beginnings of the legalization of marijuana are attracting investors and entrepreneurs. Reformers are hoping that personal use will be legalized in 14 more states by 2017, and if this takes place, the industry is expected to quadruple. According to the trade paper Medical Marijuana Business Daily, the legal market could reach $6 billion by the year 2018. There are currently 2000 legal dispensaries in the U.S and public companies are beginning to spring up, with Medical Marijuana, in San Diego, being worth $200 million.
Currently, because selling cannabis is a federal crime, investors are reducing risks by not actually buying and selling the herb, but by using supply chains and methods of best practice about design and resources. Some are skeptical of new investment and the development of brands to make the most of the market that is emerging slowly.
Federal authorities pose the greatest risk to fledgling businesses and many medical marijuana enterprises have faltered because that threat caused the market not to flourish as quickly as people thought it would in Colorado and California. Mark Kleiman, a hired consultant for Washington State, was particularly skeptical of Shivley’s business initiative for creating such a dominant brand in cannabis in such a public manner and claimed he was announcing his ‘conspiracy’ to break the law.
Pros and cons of retail sales
As legalization continues to be debated across the states, the pros and cons of retail cannabis sales were discussed last month in the Colorado Springs, Colorado, City Hall. The Police Chief suggested that there may be a rise in traffic crashes, ignoring all the data showing that traffic fatalities have actually declined as cannabis use has increased. Retail marijuana may cause discipline problems among military troops, claimed a representative from the Military Affairs Council. However, the only two studies ever conducted by the US military to test such claims found no connection between cannabis use and military discipline. Addiction is often raised as a concern when considering how to approach retail sales. While the percentage of regular cannabis users who become dependent is remarkably low compared to equivalent ratios among users of alcohol, coffee and even sugar, if people need help with a dependency there are quality facilities throughout the US to treat addiction and addictive behaviors. Sites offer local listings for addicts. Indeed, the lowered stigma of cannabis use associated with a legal regime may in itself lead to an increase in treatment requests, as problem users feel less shame and fear in seeking help. There is data that suggests that the legalization of recreational cannabis use may have a “stepping off” effect among addiction sufferers, and that broad social benefits will ensue as legal cannabis boosts the economy through job provision and sales tax revenue.
Despite federal law prohibiting the sale of marijuana across the US, Colorado and Washington are being seen as the pioneers of legalization and many businesses and dispensaries are gearing up for the future. The climate was optimistic in Las Vegas, NV, July 27, 2013 at the Southwest CannaBusiness Symposium sponsored by the National Cannabis Industry Association, the nation’s only trade association working to defend and advance the interests of legitimate cannabis businesses in Washington, DC. — West Coast Leaf News Service
