This year, Americans voted to legalize cannabis in eight more states, including California, which is home to the world’s sixth-largest economy. Two-thousand and sixteen brought what cannabis entrepreneurs say is a historic leap toward federal legalization.
Steve DeAngelo, longtime cannabis reform activist and founder of Oakland, California-based Harborside, the country’s largest marijuana dispensary, says 2016 was the marijuana industry’s "watershed moment" as both Republicans and Democrats voted for state-legal markets.
"Cannabis reform ballots won in places like Arkansas, Florida and North Dakota, places where millions and millions of Trump supporters also voted for marijuana reform," says DeAngelo. "What does that mean? To me, it says cannabis reform is the only issue that voters this year formed a nationwide, bi-partisan consensus on and it’s very clear–both sides are in favor of cannabis reform."
DeAngelo, while he admits there is industry-wide uncertainty among cannabis entrepreneurs regarding how President-elect Donald Trump will approach the industry, says this year revealed how cannabis reform is a mainstream issue.
Michael Ray, founder of Bloom Farms, a California-based medical marijuana cultivator and products company, says 2016 was "monumental" for the industry’s future.
"California passing adult-use cannabis, and the other seven states that passed their own legalization laws, signals to the rest of the country that it is time to end prohibition," says Ray.
Now, as 32 states have some form of state-regulated marijuana, Ray says he believes the industry has reached a tipping point. After the November election, the U.S. is home to a total of eight states that allow adult-use marijuana, meaning anyone over 21 years of age can use marijuana legally in California, Nevada, Maine, Massachusetts, Colorado, Oregon, Washington, Washington, D.C. and Alaska.
"What this year has started is the beginning of the network effect towards nation-wide legalization," says Ray. "California, with 200 million visitors to the state each year, will set off a network effect as people come and see what we’re doing and go home to wherever they live and demand change in their own states."
The industry’s size and scope also came into clearer focus in 2016. ArcView Market Research and New Frontier Data, two cannabis research and financial data firms, estimate that legal sales across the U.S. will bring a total of $7.1 billion in 2016, up from $5.7 billion last year. ArcView and New Frontier estimate that consumer spending in the legal adult-use and medical marijuana markets will grow 31 percent each year until 2020, reaching over $22 billion. But state-regulated sales does not give the whole picture of the industry’s potential.
Looking at both legal and black market sales, the marijuana industry is as big as the coffee industry, USA Today reports. According to a 2016 cannabis report from the Cowen Group, a New York-based financial services and research firm, the industry is already seeing $30 billion in both legal and illegal sales. Cowen says the legal industry, thanks to the wave of new legal states, will expand eight times its current size to $50 billion in the next ten years.
Brendan Kennedy, the co-founder of Peter Thiel-backed Privateer Holdings, which owns various marijuana companies like Marley Natural and Canadian pharmaceutical-grade cannabis producer Tilray, says 2016 brought the industry into the global market. This year, Tiilray exported medical cannabis products to Australia, the European Union and New Zealand, making it the first company to export legal cannabis from North America. Kennedy says Tilray has orders pending for the Czech Republic, Germany, Italy, Ireland, and Spain. He says interstate commerce in the U.S. will not happen until the federal government changes its approach to marijuana, but full-fledged international industry with import-export trading for recreational marijuana is about 10 years away.
"We project the global medical cannabis industry to be a $100 billion total opportunity within the next several decades," says Kennedy.
DeAngelo and Kennedy say the industry is operating in a period of regulatory uncertainty until President-Elect Trump announces his approach to state-regulated marijuana. Still, DeAngelo and Kennedy both think marijuana is not high on the new administration list of priorities.
"It would be politically unwise for the new administration to roll back reforms–60 percent of the American public supports recreational cannabis legalization and an overwhelmingly majority, 80 to 85 percent, supports medical cannabis legalization," says Kennedy.
Tripp Keber, the co-founder of Dixie Elixirs, Colorado’s largest THC-infused edibles manufacturer, says the culture around cannabis has completely shifted over the last year and more consumers have been empowered by the new legal markets. From Baby Boomers to lawyers to mothers, Keber says marijuana consumers has expanded across every demographic. Keber says stereotypes regarding "stoners" have fallen as more people are exposed to the reality of legal marijuana.
"We are no longer letting prohibitionists control the narrative with misinformation," says Keber. "This year the state regulated marijuana industry experienced the greatest shift towards federal legalization in history."
Keber, who announced this year that Dixie will be legally expanding to other states, says the greatest change he has seen is the feeling of longevity and the feeling that the legal industry is not going anywhere but up.
"It’s too late to turn around now," says Keber, explaining that he and his peers have put too much work and investment into the industry that politics will not pursuade them to pack up their bags and leave the legitimate economy. "We are charging ahead. That’s the only option. The boat is burned, there is no way to get back to shore. For us, 2016 provided the delusional confidence that will take us forward."
News Moderator: Katelyn Baker
Full Article: 2016 Was Cannabis Industry’s Watershed Moment
Author: Will Yakowicz
Contact: Inc.
Photo Credit: Will Yakowicz
Website: Inc.
