Once-illicit growers have been banking on some degree of legalization, investing millions in facilities and factors that can help in the growth and processing of the drug. But there has been stiff competition in the marketplace, and that has driven down the average cost that wholesalers are willing to pay – now down to about $1,300 a pound in Denver since January 2014, when sales to all over-21 adults became legal in Colorado. That’s a nearly 50 percent drop in a span of just two years.

As supply of the drug has ballooned, growers are now looking to invest in the latest-and-greatest technology to help them cut down on their turnaround time. Any marijuana business that can help growers focus on efficiency is going to find themselves an edge in the market.

Industry insiders say efficiency in production can result in costs that are slashed from roughly $1,000 a pound to about $300. Of course, retail prices are slipping too, but not nearly as fast as on the wholesale market. Colorado marijuana dispensaries were charging an average of $6.61 for every gram of marijuana as of last fall, which was a 25 percent drop from the first quarter after legalization.

Of course, there is money to be made still. It’s estimated North America sales of the drug could triple to about $20 billion just over the next five years. However, what it also means is that any marijuana business that wants to have a real shot at competing needs to be invested in good technology that helps bolster efficient production and sales. Companies that specialize in lights, fertilizers and other necessities for hydroponic growth (the method favored by indoor growers) are going to be in increasingly high demand.

There is also an increasing demand for companies that can help growers with outdoor crops. Although decades of anti-marijuana law has meant growers are most familiar with indoor production, outdoor growth – specifically greenhouse supplies – are going to be in greater demand. That’s because this method is generally deemed more efficient and lower cost. A greenhouse that features a glass ceiling, insulated walls and climate control could require half the energy costs of a typical warehouse production system. But getting there, of course, isn’t cheap. Some growers are investing tens of millions of dollars to create a top-notch facility that can be more efficient. That usually requires loans and investors.

Any marijuana business seeking to carve out an edge or a niche should consult with an experienced marijuana business lawyer who can help with navigation through any legal concerns. Run afoul of state statutes or regulations – not to mention federal laws – and it could quickly mean the end of the business, not to mention a risk of losing one’s freedom.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Why legal cannabis is becoming a major buzzkill for some growers, Jan. 17, 2017, By Jack Kaskey and Jennifer Kaplan, Bloomberg News

More Blog Entries:

Marijuana Industry Poised to Generate Many New Jobs, Jan. 4, 2017, L.A. Marijuana Lawyer Blog

The measure had to garner a minimum of 600,000 valid voter signatures to qualify for consideration. A random sampling of those signatures by the state election’s office proved there were enough, numerous outlets reported.

A spokesperson for the initiative, the Adult Use of Marijuana Act, said the approval marks the start of a step away from the expensive, harmful and ultimately ineffective prohibition on the responsible, legal use of adult marijuana use.

Our California cannabis lawyers know the majority of residents in this state – including across party lines – agree that marijuana needs to be legal.

Of course, California was the first state to legalize the drug for medicinal purposes back in 1996. However, our state has been behind the curve on the recreational marijuana front. Already, Colorado, Washington State, Oregon, Alaska and Washington, D.C. have all approved the drug for recreational use. As it now stands, voters in Maine and Nevada are slated to consider similar initiatives in November. Arizona and Massachusetts too will probably be in the same boat, though those actions haven’t yet been formalized. Michigan too may join those ranks, though it faces an uphill battle.

Although any one of those states will be a victory for the marijuana industry, California has been titled, “The Big Enchilada.” We have 38 million people in this state. If recreational marijuana were approved here, it would more than double the market. This state represents more than 10 percent of the entire U.S. population. Already, marijuana is a multi-million dollar industry – and that’s just for medicinal marijuana available to those with a valid prescription. If recreational marijuana became a reality in California, it’s very likely the industry would balloon to a multi-billion dollar one.

The likelihood of it actually happening here? According to a number of polls: Very good.

The Public Policy Institute of California ascertained recently that overall public support for legal marijuana was about 55 percent. However, among likely voters, support was 60 percent.

Another study, but Probolsky Research poll reached a similar conclusion – 59.6 percent support for the measure.

The measure also has significant financial backing: The fundraising committee for the measure has raised some $4 million this year. That dwarfs the amount raised for the Coalition of Responsible Drug Policies, which was the initiative introduced by state and local law enforcement agencies.

It won’t be the first time the state has considered such a measure. Back in 2010, Proposition 19 asked voters to approve recreational marijuana, and they turned it down. But it’s not 2010 anymore. Not only have attitudes toward recreational marijuana evolved, but this is a presidential election year. That means voter turnout is likely to be much higher than it was six years ago.

If approved, the measure would allow:

• Adults 21-and-older to possess small and grow small amounts of marijuana for personal use;
• Introduce regulation of marijuana similar to the alcohol industry;
• Funnel revenues into teen drug prevention and treatment, law enforcement training and economic development in communities disproportionately impacted by marijuana prohibition.

Our California marijuana lawyers offer representation to individuals, businesses and caretakers.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

It’s Official: California Will Vote on Marijuana in November, June 29, 2016, By Phillip Smith, StopTheDrugWar.org

More Blog Entries:

CDC: Increased Marijuana Access Linked to Lower Teen Use Rates, July 15, 2016, L.A. Marijuana Lawyer Blog