Okay, let’s first dispense with the jokes. “Rocky Mountain High” is just too hackneyed to pay it any attention. And I’m guilty of quipping about how easy it will be to spot drivers who’ve toked—they’ll be driving v-e-r-y s-l-o-w-l-y and turning in at each 7-Eleven to grab another bag of Doritos. Ha. A real knee-slapper, that one.
There. Are we done? Good.
Because the subject of growing medical-grade marijuana, legally, has been bandied about lately, especially among growers and hard goods suppliers and manufacturers who see the very real potential for profit. Marijuana for medical use has been legalized in 23 states and the District of Columbia, and voters in two states—Colorado and Washington—approved its use for recreational purposes. At least four other states are expected to vote on nonmedical use in 2014, with several more considering legislation in the near future.
A growing number of states are willing to act—specifically because of the economics involved—despite the fact that Federal law prohibits growing, selling and using marijuana.
Colorado was the first to implement legalization for recreational use; Washington approved its measure at the same time, but delayed actual implementation. And so we hear more about what’s happening in the Rockies than in the Pacific Northwest. There are problems, to be sure, but we’re not here to discuss what happens when pot is abused. This is a business discussion, and let’s leave it at that.
According to Forbes, Colorado pulled in $2 million in taxes from the sale of recreational pot in January of this year. That’s just one month. If you consider income from medical marijuana sales, the state earned $3.5 million in tax revenue. It’s a cash cow for the state, and for those growers and suppliers who got involved right out of the gate: Sales statewide for the month of January reached $14.02 million in recreational pot alone.
Layer upon layer of special taxes are levied, including state, county and local sales taxes. More to our point, layers of taxes are levied upon growers and dispensaries, as are special licenses and fees.
So although it may sound like a fabulous opportunity to take advantage of existing infrastructure and horticultural knowledge and experience, there are significant business-related obstacles. Again, we’re not considering politics or morality—just business. Strict regulations regarding location of the production facilities may render your bid ineligible. The cost of retrofitting facilities may be prohibitive. The cost and the ambiance of enhanced security may discourage you.
Then again, the potential profit may well be worth the regulatory and fiscal calisthenics. If you operate in one of the states that allows for medical use, you may already have been approached by the industry to become a registered and regulated grower. If you operate in Colorado or Washington, your options are broader.
I’d like to throw this open to discussion. Are you considering growing marijuana? If you’re a manufacturer or supplier (you know what I mean), are you selling containers and misters and other growing equipment to those who grow cannabis? For both groups, why or why not? Do you foresee increased revenue? Is this a passing fad?
Tell us what you think: Email me at firstname.lastname@example.org, and I’ll post the discussion.