November 8, 2016, was a watershed moment for the cannabis industry. Voters in Arkansas, Florida, and North Dakota approved a measure allowing doctors to prescribe medical marijuana. Montana voters eased restrictions on the state’s decade-old medical marijuana law. In California, Massachusetts, Maine, and Nevada, it is now legal for anyone older than 21 to smoke cannabis. In states with recreational use on the ballot, only Arizona voters rejected a proposed new law.
The new laws mean a potential boon not only for existing businesses, but also for new ones. States will benefit too, from increased tax revenues: 15 percent in California and Nevada, 10 percent in Maine, and 3.5 percent in Massachusetts. More than 20 percent of people in the United States now live in a state where cannabis is legal in some way.
Welcome to the new frontier. Here, what successful cannabis entrepreneurs see ahead:
Tripp Keber, Dixie Elixirs: “At this point, it is a stay-the-course approach. Two of the markets we have already entered—Nevada and California—will have some changes coming up, but legalization there simply means greater opportunity. In terms of other markets that either medically or recreationally legalized, it certainly means we might move up our schedules for getting into those markets.
We likely won’t see a true sales impact in the new markets for at least a year to eighteen months, as it will take that long to get these new markets up and running, or in an existing market like California, to implement new recreational rules. But with estimates regarding California approaching more than $5 billion, we know we will see a sales benefit. Just because a market exists doesn’t mean it’s the right time for us to be there. We will need great discipline to find the right partners.”
Michael Ray, Bloom Farms: “Our strategy has always remained the same in relation to the legalization of cannabis for adults: The goal is to bring high-quality and consistent products to consumers all over California. I expect sales in California to steadily increase, and I predict a large spike in consumption as the 200 million people who visit California every year will now have easy and legal access.
I estimate the legal cannabis market will triple by the end of 2018. This event has the potential to bring a huge influx of legal jobs and much-needed tax revenue into our economy—taxes that were unavailable over the past twenty years since Proposition 215 and [state] Senate Bill 420 have come into effect. It is a very exciting time for the industry.”
“The proposed legislation aims to give individual caregivers a chance to play in the adult-use market. It is no secret that the Maine economy needs help, and marijuana may be able to do just that.” —Michael Scherr, Crop
BigMike, Advanced Nutrients: “The fact of the matter is that the historic legislation only solidifies the strategy Advanced Nutrients has had in place for some time now. I have a very clear vision for the future of cannabis. I think the pothead as we know it is dead. The future of cannabis is about recombinant, outcomes-based products.
Our sales have been explosive. We have had record sales month over month for the past fifteen months, and I expect that to continue. Every time a new state comes online, our growth explodes. With the passage of Proposition 64 in California, the U.S. adult recreational market size tripled in one day, from 17.6 million to 67.6 million. As other states see the boon that passage of Prop 64 has on the state’s economy, the old saying, as goes California, so goes the rest of the country, will likely hold true.”
Ruben Cross, Kushy Punch: “I’m really excited about the recreational market and the way the industry is moving. We were a startup for the past two years and are transitioning into our formative years for 2017. We will be maturing as a company with a higher level of talent and a more professional operation.
Moving forward, we will be expanding and doing things on a much larger scale. I am expecting lots of regulations in everything from packaging to manufacturing. I feel like the next year or two are going to be difficult for companies to adjust to all the changes, but when it’s all said and done, we will be a legit company in every aspect. In 2017, we will be going into child-proof packaging and expanding the brand into another state.”
Pep “Blackbeard” Tintari, Greenlight Discount Pharmacy: “I’m in the process of purchasing the retail space next to my existing medical space. I’m also looking into growing more of our own products and signature branded lines. The competition is only going to get fiercer.
One of the big things I’m doing is prepping my budtenders with new sales techniques that are more conductive for a retail environment. The two markets (medical and recreational) are very different, and the budtenders will need new skills to stay relevant and competitive. I also think it is important to hire new lawyers, as the laws have changed. But perhaps most important is preparing for a new level of advertising. Fear has been such a hindrance that advertising was like walking on ice. The plan now will be to create a ship that can sail through the ice. These are exciting times.”
Gary Lowe, Cannariginals: “Our company works in a space that is purely medical in nature. That being said, the repeal of Prop 215 in favor of [the Adult Use of Marijuana Act] will force us into exploring relationships with formal distributors. So far, we have enjoyed productive relationships with a group of committed distributors up to this point, but the permitting process will have a direct effect on them and their ability to generate sales.
We believe the market for our products will continue to grow. A recent poll of Medical Cannabis Collective directors and [recreational license holders] indicates we enjoy a 16-percent share of the topical market in California.
Americans are going through a renaissance of sorts with opioid overdose deaths, and addiction is on the rise. More and more are turning to natural remedies like ours with success across a variety of issues.”
Michael Taibi, JPS Designs: “At JPS Designs, a key component of our business strategy this year has been to expand our presence in serving clients in the cannabis industry. Leading up to the November vote we saw an increase in interest in working with us, as many clients anticipated the passage of Proposition 64 in California. The regulatory environment in California is continuing to evolve and mature.
Looking ahead, the cannabis industry will be a key market segment for us for the next several years as the market continues to mature and expand with the passage of legislation. To be sure, new customers will enter the market and the desire to have an upscale dispensary, and sales experience will grow. We’ll undoubtedly begin to see trends that have occurred in the more traditional retail market influence the cannabis industry.
JPS will continue to invest and leverage resources in order to develop, design, and deliver best total solution to our clients nationwide.”
Aaron Justis, Buds and Roses Dispensary: “For the most part, we will continue down our current path. The state of California recently passed sweeping legislation to regulate medical cannabis, and we are already preparing for this. Most of that prep work involves having a seat at the table on a state and local level.
Being located in the largest local market in the country, we expect sales will increase dramatically. We will be implementing many solutions, including anything from carving out the proper retail space to maximizing efficiency in all departments in order to keep a steady customer flow throughout the day.
The best way to grow in this space is to first secure your licenses and secondly build a business model that’s profitable and can be scaled. If you can do this, you should be able to secure investment for future growth that has very favorable terms.”
Robert Rosenheck, Lord Jones: “The passage of Prop 64 didn’t change anything for us, yet it has changed everything. Last year, [the state] got [the Medical Cannabis Regulation and Safety Act], which put California on a path to full regulation of medical marijuana by January 2018. Prop 64 mirrors much of MCRSA. So operationally, nothing really changes. Remember: No recreational cannabis can be sold until state licenses are granted in 2018.
However, there has been a tectonic shift in the culture. A majority of Americans now live in states where some form of cannabis is legal. So, we are scaling our business throughout California and will be entering other key markets including Las Vegas, Colorado, Washington State, Massachusetts, and Canada.
We love recreational cannabis and the opportunity to provide our products to all adults, but we’ve also come up through the medical system. So, we’ll be building out both platforms.”
“It’s time the cannabis community grows up. The cannabis plant has been maligned for selfish and ignorant reasons. It’s actually the safest therapeutically active plant on the planet. –Kyle Kushman, Vegamatrix
Rom Roy, Happy Humboldt: “Our sales will undoubtedly increase as of January 1, 2018, when stores are allowed to sell to anyone over age 21. Just as in Colorado, once the green light for shops is on, it’s going to be a steep upward climb for sales—possibly doubling each year—and that should last for about five or six years.
Prices per pound will go up slightly for a while and then will go back down to match Colorado prices for indoor flower. Outdoor should settle relatively the same as Oregon prices, only a bit higher because the quality is generally better in the Emerald Triangle. We plan to stay on top of the quality curve and pass the savings on to the customer.
Right now, we are working on getting into 600-plus stores in California, which won’t be too hard with our connections and the fact that there’s a huge and growing market.”
Melinda Rodriguez, Barbary Coast Collective: “Barbary Coast Collective is first and foremost a medical marijuana collective, and the outcome of Prop 64 will not compromise our community’s accessibility to their medicine or our contributions to local nonprofits. As [the new] policy does not take effect until 2018, we intend to continue providing the same standard of flowers, concentrates, edibles, and the like throughout the rest of this year and 2017.
In the meantime, we are focused on the opening of our vapor and concentrates lounge, which will provide a safe, clean space for patients to medicate and educate themselves. We consider legalization in California to be a tremendous step in the right direction and an example to the rest of the country about all the benefits medical marijuana can have. We look forward to seeing what the president-elect and his cabinet can do in support of our industry and to help provide safe access to medicine.”
Michael Katz, Evoxe Labs: “We’ve been speaking with several distribution companies in California. Now that there’s some direction on where the state is headed, companies are willing to expand their operations to prepare for what’s coming. Our sales strategy is to continue to produce in the medical market and provide the best products for patients who have come to rely on Evoxe as a part of their medicating.
We are also, of course, looking forward to the transition to a broader audience. When states allow either medical or adult use cannabis, we have a plug-and-play system for expanding. We provide the vaporizers, the packaging, and our proprietary blends, as well as workflow setup, training, and the national branding. A licensed producer in any state that allows medical and/or adult use would be providing the cannabis oil and blending it with our formulas, ensuring the exact same experience no matter where you get it.”
David Noble, In Good Health (Massachusetts): “Generally speaking, Question 4 will be good for business in that it creates a new industry that will employ individuals and contribute to the local economy in much the same way medical marijuana has created jobs and also given back to the local economy. For instance, In Good Health invested a huge amount to renovate what had been an empty warehouse. We used local contractors for the construction and hired and trained local people to work at the dispensary.
Our operation gives revenue back to our host community, and we also fund non-profit programs. It is a win-win for patients and the community. It is too early to say how Question 4 will tie back to our own hiring; however, our dispensary has greater demand than we can presently meet.”
Ben Pollara, United for Care (Florida): “The passage of Amendment 2 means that hundreds of thousands of sick and suffering Floridians will now be able to access medical marijuana if their doctor recommends it. The historic mandate of voters—71-percent approval—means two things. First, there will be significant expansion of who qualifies for medical marijuana, and the decision will rest in the hands of physicians, not politicians. Second, access to medical marijuana will expand significantly by expanding the market that will be responsible for serving those patients that qualify.
This is a gigantic deal for the hundreds of thousands of Floridians who will benefit very soon. This is a gigantic deal for moving medical marijuana forward and for proving that marijuana is medicine.”
Yes on 5, North Dakota: “Measure 5 is going to improve the quality of life for many North Dakotans. There is no longer any doubt that cannabis is effective in the treatment of several debilitating medical conditions. It can alleviate the nausea that cancer patients experience as they undergo chemotherapy. It can dramatically reduce or even eliminate seizures in patients suffering from epilepsy, and it can serve as a much safer alternative to prescription drugs that are often prescribed to patients who are dealing with severe and chronic pain.
Among committee members, we often say “many hands make light work.” This effort was sown and grown in the hearts of many people, nurtured by love and compassion. Thank you to all the individuals and organizations that supported this truly grassroots effort. We look forward to working with the Department of Health and other state and local officials to ensure an effective program is up and running as quickly as possible.”
“I think it’s fantastic that we’re finally taking the stigma out of marijuana use in the state, and that throughout the country the [cannabis] initiatives are passing in almost every state they were on the ballot. This is a big plus not only for people who now have the right to decide for themselves if they want to consume cannabis, but also for society.” —Bruce Margolin, veteran cannabis defense attorney