The legal cannabis industry is rapidly expanding, so much so that some researchers expect cannabis will be legal -- either medicinally or recreationally -- in every state by 2021. Market analysts for cannabis industry research organization GreenWave Advisors anticipate that in four years 22 states will have medicinal programs and 29 states (plus D.C.) will fully legalize cannabis, leading to a projected $30 billion in sales revenue nationwide.
GreenWave Advisors' projection is in line with the estimates of other research organizations watching the fledgling industry closely. According to cannabis-dedicated finance organization The Arcview Group, the legal cannabis industry could be valued at $21.8 billion by 2020. Yet another estimate, released by investment bank Cowen and Company, anticipates that the industry will reach $50 billion in sales by 2026.
And the legal cannabis industry is certainly showing signs of accelerated growth. On election day, voters in eight states approved new legal cannabis initiatives. Arkansas, Florida, Montana and North Dakota all supported new medical marijuana initiatives, while voters in California, Maine, Massachusetts and Nevada all moved to legalize recreational adult use.
While the cannabis industry is experiencing explosive growth, many in the industry fear that it is sometimes perceived to be a part of the "stoner culture" rather than as a legitimate business. In reality, cannabis entrepreneurs come from all walks of life, cater to a wide variety of consumers and put money back into the communities in which they operate. Like any other business, there are consultants, financiers, cultivators and dispensary owners who sell the actual cannabis products, and contractors who help build out cultivation and production centers.
To get a better idea of what it's all about, Business News Daily connected with some entrepreneurs who are already operating in the cannabis space, and asked them where it's heading and how it has already changed since the first legal markets were created. These are some of the cannabis entrepreneurs who are shaping a post-prohibition industry.
Mike Ray, owner of Bloom Farms
Mike Ray, the owner of medical cultivators Bloom Farms, hails from "cannabis country" in Calaveras County, California, where the black market supported a number of families during prohibition.
"There was always a big, unspoken industry there in an underground sort of way," Ray said.
Ray struck out on his own and headed to work as a hedge fund trader in New York City. However, when the financial crisis erupted, Ray felt the urge to change his lifestyle. He was "disgusted" at the misbehavior of some financial institutions that occurred leading up to the crisis, and he decided to return home and get back to his roots. [See Related Story: A Devastating Fire Inspired Me to Give Back with My Marijuana Business]
Ray reconnected with his childhood friends, who were now successfully cultivating medical cannabis, and he decided that cannabis was the next opportunity he needed to seize. Medical cannabis use has been legal in California since 1996, so Ray was able to study what his friends had learned so far and examine the growing industry inside and out.
"I absorbed as much as I could. I started cultivating, I examined how the sales channels worked," Ray said. "I found the industry was just a bunch of people who cared about other people."
From that discovery, Ray launched Bloom Farms and dedicated its mission to removing any stigma surrounding the cannabis industry. He wanted to dispel the idea that cannabis was just for "stoners" or "hippies" and emphasize the health benefits and recreational lifestyle that he saw associated with the plant and its products.
"I wanted to take a different approach and speak to a more mature market — people who were interested in cannabis as a healthy lifestyle choice," Ray said.
Now, Bloom Farms is engaged in a number of community initiatives. Chief among them is its "one-for-one" program, which provides a meal to someone in need for every product sold. Through 2016 alone, the Bloom Farms one-for-one program has provided a quarter-million meals to four food banks in California.
Sara Gullickson, owner of DispensaryPermits.com
Sara Gullickson has been working in the cannabis industry as a consultant for seven years. She got her start as a marketer for spas and health facilities, and soon a dispensary licensing business approached her for help. She worked with the young DispensaryPermits.com for about a year as a marketer, but soon realized that she had a knack for the business and bought it from the owners.
Today, Gullickson helps clients win their dispensary licenses and open their doors.
"We have a process that will help get them open in eight to 12 weeks," she said. "It includes interior design, policies and procedures, compliance, and a certain level of patient experience."
In the beginning, Gullickson said that the business was almost like seasonal work, and every client had to be sought out and courted. Now that the industry has grown, it's the other way around.
"I never worry about finding work or clients; we're in a situation now where we can't keep up," Gullickson said. "It's amazing that it's exploding to the point where we're growing so fast we're trying to outrun it."
In the past six years, Gullickson has seen the industry go from something people looked at with suspicion, to a mainstream, exciting, rapidly growing industry. Election night was the culmination of the industry's growth and maturation, she said.
Gullickson believes that state referendums will compound the ongoing growth, but notes that the industry still faces adversity, primarily from continued prohibition on the federal level. While investors have become more eager to get involved as the industry has grown, banks are still hesitant to work with cannabis entrepreneurs, particularly dispensaries, for fear that some federal-level administration will eventually come down hard on them.
"Banking will definitely be an issue until the feds recognize this as a legal business," Gullickson said. "Unless banks are doing business with several different dispensaries, it doesn't make sense to take on the risk or the expense of compliance. Some local credit unions and small private banks will fill that void."
Gullickson hopes that the federal prohibition will soon be lifted so that cannabis entrepreneurs can operate without being shackled to a proverbial ball and chain. Still, she said, it's a great space in which to work.
"If you're going to get involved in this industry, buckle up," she warned. "It's a wild ride."
Diane Czarkowski, owner and co-founder of Canna Advisors
Diane Czarkowski and her husband, Jay, began their careers in a field that was very different from the cannabis industry. Diane and Jay worked in real estate development: Diane was a licensed agent and Jay was a general contractor. However, after the 2008 housing crisis, the duo set their sights elsewhere. Diane and Jay reinvented themselves by opening a medical dispensary.
"Early on, we had a big dedication to serving patients and really catered to an older demographic," Diane said. "A lot of local doctors … [referred] people to us because they knew they'd be taken care of."
In 2012, Diane and Jay decided to sell their dispensary and grow operations to focus on campaigning for Colorado's Amendment 64, an initiative that would later legalize recreational adult use of cannabis. At the same time, an aspiring cultivation operation in Connecticut, which sought the husband-and wife team's help in obtaining a license, contacted the duo. The effort was successful, and soon Diane and Jay were helping companies with their licensing applications in Massachusetts, as well. Thus, Canna Advisors consulting and licensing was born.
"We've witnessed a lot of change in Colorado from when we first opened our doors," Diane said. "We had to go through a regulation bout in 2010 and [we've] gone through many, many revisions — some still occurring. So we've really taken our consulting business to focus on new markets."
Through the Arcview Group, Diane said she's been introduced to new ideas about how to welcome patients and customers to dispensaries, harnessing technology to help provide more detailed information to the buyer beforehand. In things as simple as dispensary decor and atmosphere, Diane said it's clear that the industry's understanding of what consumers want and need is more refined.
"People are finally understanding that dispensaries need to be a welcoming retail experience," Diane said. "There's a lot of great innovation coming out for dispensaries to make it a more pleasant experience."
One such innovation is a touch-screen tabletop that allows consumers to put a product on it. From there, the device will then retrieve troves of written and multimedia information about that product. Whether it's the strain, how it was grown or direct footage of the farm where the plant was cultivated, the technology allows the customer to obtain a full rundown of the specific product. That, Diane said, is the mark of the dispensary's evolution.
Ron Sassano, CEO of Scalable Solutions
Ron Sassano is a 20-year veteran of construction and land development. His first introduction to the world of cannabis cultivation two years ago was quite by accident, Sassano told Business News Daily.
"I kind of stumbled into it," Sassano said. "I was invited to look at some facilities, both cultivation and production."
He learned from cultivators that the persistence of pests, mold and mildew was causing product inspection failures at the state level. Drawing on his construction background, Sassano recognized that much of the problem could be attributed to conditions at the facilities, and that recognition launched his cannabis industry career.
"I showed owners, cultivators and producers a better system of building the interiors and structures of facilities … because the old drywall techniques just aren't working for these guys anymore," Sassano said.
Sassano realized that he could provide a service to cultivators that would increase their inspection pass rates, which is invaluable when an entire crop is at stake. He set out to help cultivators build facilities from scratch or retrofit existing structures to optimize them for cannabis-growing operations. His company, Scalable Solutions, a subsidiary of the Medical Cannabis Innovation Group, also works with clients to obtain city or county approvals and building permits.
A particular challenge to the industry when it comes to facilities, Sassano said, is ever-increasing, highly stringent state regulations that are unique to the cannabis space.
"They're looking at it like a medicine, so what goes into your body has to be pure [and] free of pollutants … mold, mildew and pesticides," Sassano said. "[Those issues] start at the plant level in its growth stage. It's an old, leaky building, it's drywall absorbing moisture, it's an undersized or oversized air conditioner."
Sassano said the industry is evidently maturing. From an underground atmosphere even two years ago to a more open and prideful one today, cannabis is starting to be viewed as the legitimate business entrepreneurs are striving to run, he said.
"People started coming to the forefront … they became proud of what they're doing, and they should be," Sassano said. "Some of these guys are doing really amazing work and they should show it off."