Content sponsored by Surna
In 2014 the smoke signals were plain to see: the marijuana industry was rapidly becoming one of the most exciting propositions of the decade. In a watershed year, the states of Colorado and Washington legalized recreational pot, with Alaska following close behind. Now, with the drug’s medical benefits being ever more widely recognized, public opinion has never been so positive.
“The implementation of recreational cannabis, in addition to medical cannabis, has been a catalyst for people to develop a more reasonable, informed perspective on the issue,” says Tae Darnell, VP at Surna, a marijuana engineering firm. “An analysis of the social effect of cannabis legalization has shown doubters that, in short, the sky won’t fall.”
In fact, when it comes to investment opportunities, the sky is pretty much the limit. Here are three reason why the pot industry is booming in 2015:
1. New Legislation Protects States That Legalize
The spending bill passed by the Senate in December 2014 contained an historic “marijuana measure.” This legislation, which forbids the federal government from impeding state medical cannabis laws, protects the 23 states that so far have legalized the drug in some capacity.
“For the first time, Congress is letting states set their own medical marijuana and hemp policies,” says Bill Piper of the Drug Policy Alliance. He calls the move “a huge step forward for sensible drug policy.”
Surna’s Tae Darnell agrees. “It’s a significant hands-off statement from the federal government. It’s a message to the general population and the market as a whole that this approach to cannabis is coming from the side of regulation, rather than criminalization.”
Previously, even in states where medical marijuana was legal, the Department of Justice was free to devote resources to raiding growers and sellers. Individuals involved with pot businesses could be arrested by federal agents, despite the fact that they were breaking no state laws.
The new legislation is set to change all that.
“It enables entrepreneurs and others to get involved more directly, confident that they have the government on their side when it comes to professionally run businesses that remain in strict compliance,” Darnell says.
2. Growing Markets
Thanks to shifting attitudes and declining red tape, demand for marijuana is growing steadily across a range of markets.
“The walls of prohibition are crumbling,” says Steve Katz, New York State Assemblyman for the 94th District. “Exponential growth of the industry is upon us.”
Researchers at the Harvard Business School have identified three blooming markets for legal marijuana: individual growers, medicinal users, and recreational consumers. So whether consumers are harvesting homegrown plants, picking up prescriptions, or browsing the well-stocked shelves of their local dispensary, opportunities abound for investors and entrepreneurs.
The even better news is that, based on the example set by Colorado, many of the societal and cultural concerns expressed by opponents of legalization are proving groundless. In fact, the pros are far outweighing the cons.
“The state has seen a drop in teenage use of marijuana as well as a decrease in crime rates,” says Tae Darnell. “Tax revenue is pushing $100 million. At this point, people can see not only the direct benefits of reasonable regulation, but also the derivative benefits.”
3. Big Tobacco May Soon Become “Big Marijuana”
Legalization is currently not widespread enough for mass-market pot brands to be sprouting up. But that doesn’t mean the “Bud Light-ification of bud” isn’t just around the corner. As the recreational market looks more and more likely to become a national phenomenon, Big Tobacco firms like Philip Morris and R.J. Reynolds are watching very closely.
“If recreational marijuana is ever legalized beyond the four states where it’s currently permitted, the tobacco companies will be perfectly positioned to capture this vast market,” Leonid Bershidsky writes for Bloomberg.
“They already have distribution systems, marketing machines, industrial facilities to make marijuana cigarettes and package cannabis for use in vaporizers, patented designs for the vaporizers themselves, research laboratories and, last but not least, cash resources.”
With tobacco sales trapped in a steady decline, the pot boom could prove to be just the fix cigarette manufacturers are craving. And once the giant multinationals pounce, you’ll know for sure that legal marijuana has officially arrived.
RELATED: When Tech Met Pot: How Silicon Valley Entrepreneurs Are Changing the Cannabis Industry
About B.J. Hinshaw
B.J. Hinshaw is a freelance writer based in Davis, California. He holds MAs in cultural geography and creative writing, and has previously been manager of a small business in London, England.
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