January 2017

After A Huge Election Victory, What’s Next For Marijuana?

While most people watched the presidential election in horror on Tuesday night, something else, quietly but surely, happened on Election Day: Marijuana legalization won. In fact, it won in several states in an election when liberals by and large seemed to lose across the board.

The key state here: California. There, voters overwhelmingly approved legalization meaning the country’s most populous state and biggest economy will now move to let people buy marijuana for recreational use and, most importantly, let for-profit companies come into supply all of that pot.
Obviously, by itself this is a huge symbolic victory. But there is a very practical effect, too: It means that big companies now have a massive economy to flock to and grow their pot businesses.

Until Election Day, only four relatively small states had already legalized pot: Colorado, Washington, Oregon, and Alaska. Altogether, these states hold about 17.1 million people, and their cumulative annual economic value totals around $1 trillion.

In comparison, California alone holds 38.8 million people and is worth around $2.5 trillion. That’s nearly twice as populous and more than twice as wealthy.

With such size, California isn’t just a bellwether for the national trend toward legalizing pot. It’s a bullhorn.

California solidifies existing polling trends

It would be one thing if this were just wacky liberal California doing something weird. That’s how some critics characterized the state’s legalization of medical marijuana in the 1990s at first until dozens of other states followed suit, to the point that more than half the states now allow medical pot.
Yet the polls suggest this isn’t just something that California wants to do, but that a majority of Americans want to do.

The Pew Research Center’s surveys illustrate the trend: In the 1990s and early 2000s, support for legalization was fairly low hovering around the 20s and 30s. In 2016, 57 percent of US adults say marijuana should be made legal, compared with 37 percent who say it should remain illegal.

As Pew’s numbers show in the chart above, support is rising in every generation. But crucially, millennials are particularly supportive a sign that as that generation ages and becomes a bigger share of the overall population, it will continue to push the country toward heavily favoring legalization.
California could also give more credibility to this movement. If nothing big goes horribly wrong (just as nothing big has gone wrong in Colorado or other legalization states), then the nation’s most populous state making up more than one-tenth of the US’s population could show everyone else that this isn’t the huge disaster drug warriors have long warned about. In fact, it might even bring in some big tax revenue and create a lot of jobs.

But California could have another, perhaps more subtle effect too.

California sets the stage for big marijuana playing a bigger role in ballot initiatives
Given the reputation of California’s medical marijuana industry, it might be easy to understate the scope of what the state did on Tuesday. After all, it’s already fairly easy to get pot in California you can just stroll down to Venice Beach in Los Angeles, pay $40 or so for a medical marijuana card, and legally buy some premium bud.

But there is a vast difference in scale between Venice Beach’s local medical pot shops and the burgeoning multi-state marijuana industry that can rise from full legalization.

Market analysts have backed this up: One report from researchers at the investment bank Cowen estimated that legalization in California alone will triple the size of the nation’s current $6 billion legal pot industry within a decade. Another report from ArcView Market Research estimated that legalization in California would create a new $6.5 billion market for legal use by 2020.

This does a few things that will make it a lot harder to contain marijuana legalization in just a few states.

For one, the market will be so huge that it will be difficult to avert smuggling from the state. There are already reports of Colorado pot making its way around the nation. Now imagine the potential impact of a market that is many times the size of Colorado. (Not to mention the other states that legalized last night.)

THE BIG MARIJUANA INDUSTRY, JUST LIKE ANY OTHER FOR-PROFIT INDUSTRY, WILL WANT TO GROW

The other consideration is that the big marijuana industry, just like any other for-profit industry, will want to grow. The obvious pathway to doing that is legalizing pot in the dozens of states where it remains illegal.

With many, many more customers thanks to California’s decision alone, the industry will suddenly have more profits that it can then use on a time-honored tradition in American politics: lobbying. The alcohol industry, for example, has successfully fought off all sorts of regulations and taxes over the years. The marijuana industry has a much bigger hurdle to fight than taxes in prohibition, but it now has a clear model for doing this: ballot initiatives.

The big problem with ballot initiatives is they can cost a lot of money. Whenever I ask legal pot activists why, for example, it took so long to get medical marijuana which now polls very well virtually everywhere in Ohio and now Florida, the response is usually that those states are very expensive to run ballot initiatives in.

Well, there’s now going to be a rapidly growing industry to cover those expenses.

Legalization advocates expect this. As Ethan Nadelmann, executive director of the pro-legalization Drug Policy Alliance, previously told me, he’s long expected the marijuana industry to become a bigger part of the drug policy reform movement as legalization spreads.

On some level, we have always known that,î he said. ìAnd I think 2016 may be the last year in which drug policy reform organizations, driven primarily by concerns of civil liberties and civil rights and other good public policy motivations, will be able to significantly shape the legislation. And I assume that as the years progress, various industry forces will loom ever larger.

Legalization advocates have had public support on their side, particularly in the more liberal states, for years. With a big marijuana industry in California, they may now get more money to actually put those ballot initiatives in front of voters.

The federal government can’t keep ignoring what’s happening here

For years, Congress has for the most part ignored the spread of marijuana legalization. As legalization continues to spread, this is going to become less and less defensible.

Technically, marijuana is still illegal under federal law it is Schedule 1, the strictest classification in the drug scheduling system, and it has criminal penalties attached to it. The federal government has mostly ignored that contradiction and decided to let states legalize as they please, with minimal interference.

But this contradiction in state and federal laws creates other problems. For one, banks are generally afraid of doing business with marijuana growers and shops after all, it could put the bank in the awkward position of essentially taking part in an illegal drug industry. This has forced many pot businesses to function as cash-only businesses. That’s not only burdensome for pot businesses but also potentially dangerous, since it makes them better targets for would-be robbers.

Another hurdle: Due to a tax rule known as 280E, marijuana businesses can’t file for a bunch of deductions that businesses are normally entitled to, pushing their effective income tax rates to as high as 90 percent.

DOES CONGRESS REALLY WANT TO LET STATE BALLOT INITIATIVES, WHICH CAN BE RIFE WITH PROBLEMS, DECIDE THE FUTURE OF A MAJOR DRUG POLICY ISSUE?

Then there are the broader policy issues: Does Congress really want to let state ballot initiatives, which can be rife with problems, decide the future of a major drug policy issue? Is Congress really okay with the creation of another for-profit industry focused on marketing and selling a recreational drug, given the track record of the alcohol and tobacco industries? Do federal lawmakers really not want to make sure there’s at least some regulatory floor for how marijuana is grown, transported, advertised, and sold? Is Congress really going to do nothing as a giant new industry takes root in America?

It simply doesn’t make sense for Congress to simply ignore these issues, considering that federal law plays a direct role in all of them. It was already pretty bad for federal lawmakers to play ignorant when Colorado and Washington legalized in 2012, but with the biggest state in the country now allowing the recreational use and sales of marijuana, it’s completely ridiculous.

President Barack Obama, in an interview with comedian Bill Maher, acknowledged as much shortly before multiple states voted to legalize on Election Day: If in fact it passed in all these states, you now have about a fifth of the country that’s operating under one set of laws and four-fifths in another. The Justice Department, DEA, FBI, for them to try to straddle and figure out how they’re supposed to enforce laws in some places and not in others they’re gonna guard against transporting these drugs across state lines, but you’ve got the entire Pacific corridor where this is legal that is not going to be tenable.

One point of uncertainty: President-elect Donald Trump. Trump has suggested that he is okay with letting states legalize on their own. But his administration, especially one in which an anti-legalization figure like Trump ally and New Jersey Gov. Chris Christie holds sway, could try to clamp down on states legalizing. Or the Trump administration could continue the hands-off approach of the Obama administration. We just don’t know what Trump will do on this issue.

Still, as it stands now, it sure looks like marijuana legalization and the big industry that could be behind it are coming. Staying in denial about that won’t change the reality.

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Push Toward Legalizing Marijuana

A Renewed Push Toward Legalizing Marijuana in 2017

In 2016, roughly 60% of Americans said they favored the legalization of recreational marijuana, as the industry gained support in invalidating the war on drugs and seven states voted to legalize pot for recreational or medical use.

It was a watershed year for weed. The industry took significant steps in solidifying the market, demonstrating its earnings potential, while advocates fought to debunk the stigmas tied to consumption and argue that states can use it help plug budget holes. In Colorado, where marijuana is legal for recreational use, total revenue from marijuana taxes, licenses and fees came to $72.8 million, as of October 2016.

But for all that was accomplished, there were setbacks. Donald Trump won the 2016 presidential election and though he has said he’s in favor of medical marijuana and states’ rights, he is nominating Republican Sen. Jeff Sessions as the next U.S. Attorney General. Sessions is famously anti-weed and has said marijuana is a very real danger.

And in Massachusetts, where voters legalized the recreational use and sale of marijuana in November, lawmakers have voted to delay the opening date of retail marijuana stores until at least January 2018. No public hearings or office notice were given. Maine, which also voted to legalize, has called for a recount and lawmakers are trying to delay the initiative from taking effect.

Heading into 2017 the industry has 2,966 medical dispensaries and 3,973 retailers across the country, with more than 4,200 marijuana cultivators, according to a published report on marijuana licenses conducted by research firm Cannabiz Media.

The industry still has some obstacles and growing pains to overcome, but will look to grow, mature and make a bigger impact in 2017. Here are some trends and issues to keep an eye on heading into next year.

Marijuana supporters make push for federal acceptance

Just ahead of the Nov. 8 election, Adam Bierman, chief executive of cannabis management services company MedMen, told MarketWatch no matter which way the presidential election swung, the industry would look to chip away at the federal barrier in 2017.

Marijuana is still illegal at the federal level and classified as a Schedule I drug along with heroin, LSD and ecstasy.

Starting next year the plan is a full-court press on federal law changes, Bierman said in November.
It’ll take some time, about four to eight years, experts expect but Bierman said the industry is already lobbying, paying for its efforts and getting its ducks in a row.

Still, there are concerns about Sessions and the Republican-run congress. The incoming government has been anything but welcoming to changing the federal law, but with 60% of Americans on its side, and the recent votes in California, Massachusetts, Nevada and Maine, the marijuana industry is hoping Sessions and Trump’s administration will adhere to the wishes of the American majority.

Research will be expanded

The future of the marijuana industry in America, particularly its future in federal regulation, depends on continued research into its effects and cannabinoid makeup. More research will help the industry make a stronger case not just that marijuana isn’t harmful as opponents say, but that it has benefits as well.

The Drug Enforcement Administration, while it declined to reschedule marijuana under the Controlled Substances Act back in August, did make access easier for research, upping the number of authorized manufacturers that supply the substance to researchers.

This change illustrates the DEA’s commitment to working with the FDA and NIDA to facilitate research concerning marijuana and it’s components, the federal agency wrote in its August news release.

A pro sports league backs marijuana use

Professional sports leagues and marijuana use have a somewhat contentious history. And as states began legalizing marijuana, the relationship with pro sports became even more complicated. Players, supporters and fans wanted to know whether players in legal states would be punished for testing positive. They were.

There is change afoot, however. Tarek Tabsh, chief strategy officer at Forma Holdings which acquires and helps build cannabis-related companies, said he expects there to be a shift in marijuana acceptability in sports in 2017. Bierman at MedMen went so far as to say one of the major sports leagues in the U.S. will approve the use of marijuana.

The National Football League is already having conversations on changing its marijuana rules, according to NFL.com’s Ian Rapoport. The league, per 10 team owners, is re-evaluating its stance on medical and recreational use.

And in early December Steve Kerr, former Chicago Bulls point guard and current Golden State Warriors head coach, said he used marijuana in 2015 when he was recovering from back surgery.

Microdosing will become the new (best) way to consume

While smoking marijuana in plant form think traditional blunts, joints, bongs and pipes is still the most popular way to consume the drug, Cy Scott, co-founder of Leafly and market intelligence firm Headset, said it has been losing favor to pre rolls, vapor pens and edibles. One of the chief reasons for this is convenience.

Things like edibles are much easier to consume, they don’t take as much work, especially for people who are new to marijuana. The problem is that they tend to have a relatively high dosage of THC, marijuana’s main psychoactive property, with effects that lag. People end up taking too much, too quickly, either because they don’t know about that effect, or because they don’t feel the effects quickly and take more. And there’s no standard across the industry or states.

In states like Washington, the legally defined dose is 10 milligrams, but there are some companies like Seattle’s SPOT and Goodship that are going for much lower doses in their edibles, as low as 2.5 milligrams in some cases.

Companies are doing a poor job right now of educating consumers, but I think they’ll start doing much better in 2017,î Scott said. Microdosing is definitely becoming a trend moving forward and it can’t come soon enough.

Big business; big investments

This trend comes from the school of if you can’t beat them, join them. Some industry experts expect to see a rise in big companies testing the waters of the marijuana industry.

Don’t expect products from these companies soon, Scott said, not until there are changes at the federal level at least. There are cannabis-infused drinks in development, however. But it’s likely instead that beverage, tobacco, pharmaceutical and increasingly biotech companies will look to gauge the market and even make some investments and partnerships.

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Marijuana Jobs in 2017

The Future is Bright for Marijuana Jobs in 2017

Election night 2016 will be remembered as a resounding success for those supporting medical and recreational cannabis legalization. Recreational use was legalized in California, Nevada, Massachusetts and Maine. Voters in Florida, North Dakota, and Arkansas all approved medical marijuana initiatives, and voters in Montana realigned the current laws to reflect the patient interests outlined in the original 2004 medical marijuana law.

In all, 28 states (including the District of Columbia) have legalized medical marijuana, and eight allow adult recreational use. Topping that off, the Marijuana Policy Project projects at least 10 states will legalize marijuana in 2017, whether partially or fully.

To Trump or Not to Trump?

The optimistic outlook for a windfall of cannabis jobs is not without contingencies. As a cannabis industry consultant, I’ve spoken to a variety of industry movers and leaders, and their sentiment is mixed. The Trump administration may not be all that desirable for this powerful green plant.
ìWith Senator Jeff Sessions being appointed United States Attorney General in the new presidential administration, it is highly likely there will be challenges to the state-run cannabis businesses,î contends Philippa Burgess, an NCIA (National Cannabis Industry Association) member who does content marketing for Red Thread Creative Group.

Industry influencer Jeffrey Friedland agrees. “Just the thought of Sessions becoming attorney general has rattled many marijuana investors. Entrepreneurs have also placed their plans to enter this market on hold and will likely not commit to this emerging industry until more is known regarding the intent of the new Trump administration.”

If this is the case, the legal cannabis industry will need to step up its game to support for NCIA to galvanize voters, politicians and business leaders advocate politically for continued operation and expansion. That’s tough for any industry, but especially for one that hasnít had a deep history of collaboration, organization or unionization. The cannabis industry is nascent to all that.

But others argue the new president won’t be an obstacle to the cannabis industry because, after all, business is business. “In Obamas second term, he allowed states to figure out how legalization works for them without too many federal crackdowns,” explains Carolyn Gerin, co-founder of cannabis design agency, Cannawise.co. “In Trumplandia — if heís really pro-business — he wont be able to say that cannabiz isnt lucrative — $846,492,422 sales from January-August in 2016, Colorado.”
You can’t argue with those numbers for job creation and tax revenues.

Chris Driessen, president of Organa Brands, the nation’s largest carbon dioxide cannabis extractor, agrees, but for an additional reason: taxes. Trump sold himself as the friend to businesses with the promise of lowering business taxes, and the cannabis industry is subject to a strange one in particular: Section 208E.

Section 280E of the Internal Revenue Code forbids businesses from deducting otherwise ordinary business expenses from gross income associated with the trafficking of Schedule I or II substances, as defined by the Controlled Substances Act. “We’re cautiously awaiting the first signs from the new administration,” Driessen revealed. “From a taxation perspective, the industry is treated unfairly as the result of an outdated policy meant for cartels. Trump can change that if he recognizes the revenue and job opportunities the industry promises.”

Collectively, industry advocates agree on one thing: Trump is a wildcard.
“He could be a speed bump that slows the industry down. He could be a stop sign that brings growth to a screeching halt. He could do absolutely nothing, meaning everything continues as usual,” Chris Walsh, cannabis industry analyst and Editorial Director of MJBizDaily told me. “Or he could end up being a tailwind that pushes the industry forward faster than it’s moving along today. We just have no idea what he’s going to do.

The Emerald Cup

Despite these concerns, the industry forges ahead. Thousands of cannabis advocates, enthusiasts and business people recently got together for a first-hand look at what trends, products and innovations are expected to shape the market in 2017. The famed Emerald Cup, showcased them all. From fertilizer to industry hardware, to the plant itself, the Cup gave us a glimpse of whatís to be anticipated next year.

The event also gave a foreshadowing of a ripe job market., as well. The Emerald Cup’s education sessions many topics and industry experts emphasized a consistent theme: the industry will need more people to fill new roles. A prediction perfect for those thinking of a career change in 2017.

Smokin’ Jobs in 2017

With jobs ranging from seed-harvester to budtender, the cannabis industry is set to offers lots of opportunity.

Growers

An extensive and detailed knowledge of the marijuana plant and how to grow it is needed to consistently produce the best crops. As more cannabis-related businesses are expected to open in 2017, more marijuana crops will be needed to fill the demand. State agencies in Colorado recognized this for certain when they introduced a panel discussion: ìCannabis: An Emerging Crop Of Colorado at the 2016 Governors Forum on Agriculture.

Seed harvesters

So many countries have legalized recreational and medical cannabis the demand surged over 830 percent in 2016. Marijuana seed selling requires federal authorization to be recognized as a legal activity. If you’ve got attention to detail this is a rocketing space.

Courier and delivery personnel

The medical marijuana industry has now made it possible for individual prescriptions to be delivered where laws allow. Either by mail or delivery service, this creates more jobs and gives a sense of legitimacy to the field. “Cannabis businesses looking to grow in 2017 ought to embrace mobile culture by providing their customers an on-demand purchase and delivery model that supplements their brick-and-mortar offerings,” suggests Matt Gierut, COO at mobile app developer Codal.

Cannabis consulting

For growing specialists who love the industry and what it’s up to, but just don’t want their own farms or products, consulting can be very rewarding. The cannabis industry is leading consulting group, Denver Consulting Group, launched a program to offer low-cost $100 compliance audits for cannabis dispensaries, marijuana grow operations, and processors. Consulting requires a lot of specialized knowledge but could be a great opportunity for those qualified.

Retail shop owners

Owning your own marijuana retail store can make you famous in the cannabis industry and opportunities to become this type of ‘cannpreneur’ are understandably expected to increase come 2017.

Edible creators

Creating edible versions of marijuana in the form of beverages, baked goods, candy, and other edibles is quickly gaining popularity in the marijuana industry. Edibles can provide quick relief from serious pains and other symptoms that affect patients who use medical marijuana. The edibles category accounted for roughly 7 percent of the total cannabis market at the beginning of 2016. With over 100 edibles startup companies on the horizon, the supply will try and catch up to the demand in 2017.

Concentrates processor

This field of work is critical to the cannabis medical industry. The most common cannabis concentrates are oil, budder and shatter, tinctures and wax, offering powerful effects and value to medical cannabis patients. In most cases, marijuana needs to be in a concentrated form to be made into tablets and medicines, and with the use of vaporizers on a rapid rise, the demand for marijuana concentrates is also expected to increase significantly. Have experience working with chemicals and laboratory equipment? This cannabis job might be great for you.

Glass merchants

From selling handheld vaporizers to selling pipes, bongs, or creating your own glass blowing device, glass merchants too have a place in this industry.

Budtenders

Those who drink alcohol have bartenders, those who use marijuana have budtenders. Yes, you got it right a budtender plays the role of a bartender in the marijuana industry. Budtending is not a light job, as a good tender must have a solid understanding the laws associated with marijuana, as well as knowledge about different cannabis strains and products. Evo Labs offers these five essentials for any aspiring budtender.

Regulation and control administration

With its new and constantly evolving set of regulations, the marijuana industry will need administrators at all levels and steps of the manufacturing, selling, and distribution process.They’ll be needed to help ensure that these businesses are in full compliance with the laws and also to help educate the public about the laws relating to marijuana.

Trimmers

These are the bud refiners. Removing the heavy leaves and unwanted parts of the marijuana is arduous work, but a good way to get your foot in the door in marijuana processing. Bud trimmers can earn between $12 and $15 an hour cutting leaves according to Monster.com. While there’s some debate about whether the role can become entirely automated in the future, true cannabis artisans ensure me it’s a job that’s in the industry to stay.

Marijuana tourism

Bud and dinner pairing? Grow and tasting tours? The tourism industry will grow alongside the marijuana industry. From visiting growing locations to making tours to retail and dispensary locations, tourism companies now have an opportunity to tailor the market how they see fit.

Indeed, the legal cannabis industry rode a big wave in 2016. One that has the potential to create ripples of opportunity in 2017. But only if the winds blow the right way.

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