I Really Love Marijuana…
I’m sure my Mother read that title and almost fainted. Before you make an incorrect assumption, I’m not a marijuana user. The use of the product doesn’t really interest me. Actually, in 41 years, I’ve never even had the opportunity to try it. However, the business of marijuana holds a lot of my interest lately.
This isn’t an opinion article about whether marijuana should or shouldn’t be legal. if you’re looking for that argument, you’ll need to go elsewhere. No matter how you feel about it, recreational cannabis use has become legal in some states. This change has brought a previously “black market” into the mainstream, and the process is fascinating.
What intrigues me is reading stories and watching documentaries about the growth of the recreational marijuana industry in the states that have legalized. This is akin to being able to watch the California gold rush as it happened. Even the growth of the internet wasn’t as interesting, because it wasn’t this “overnight.”
Actually, when I think of it, the repeal of prohibition would probably be a better parallel. Similar to today’s cannabis situation, prohibition had a thriving black market just waiting to be legal once the government changed the laws. Although in the current case, the legal environment is even more interesting, since Federal and State governments are at odds over the issue.
Watching those involved in this new industry deal with the challenges of a budding (pun intended) industry is amazing. Entrepreneurs of all types from around the world are migrating to the lure of a completely new market. Every move they make is documented and displayed via the internet, for all of us to learn entrepreneurship lessons along the way.
One of the biggest challenges those in the cannabis industry face is the fact that the businesses can’t use banking services. Why? Because, although a state has legalized the business, it’s technically still against federal law. The banking industry is regulated by federal law, so their participation would put them in violation of federal law.
How the business owners deal with such large sums of business on an all cash basis is one of the most interesting parts of this. It’s a pure form of entrepreneurship, as you can’t go to a bank to get a business loan to grow weed. You have bootstrap or find investors with real cash to work with you. I’m guessing because of this, the debt ratio of marijuana businesses are probably some of the healthiest startups around. They’ve found money because they simply can’t get credit. That’s not a bad thing, and something other startups could learn a valuable lesson from.
What makes the story even more interesting is the growth of ancillary services that serve the cannabis industry. Take Iron Protection Group for example. They are a business started by veterans of the Iraq and Afghanistan conflicts that offer store protection, grow site protection, and cash protection services. Think about this dichotomy; ex-military operators offering protective services to those growing a product they were forbidden to partake of for their entire military career. Could you choose two more different cultures from our society to work together?
If you enjoy interesting business cases and watching how a completely new industry develops, I’d recommend taking a look for yourself. Here are two to check out: High Profits, which you can find on Netflix, chronicles the story of a specific cannabis shop in Breckenridge, Colorado. Weediquette, from a new channel called Viceland, is a more diverse look at cannabis issues and is available on SlingTV, a newer streaming service. They can be a little “raw” at times, so they’re not exactly family material. Of course, these aren’t the only two available, but a good place to start.
Take a while and dive into this new adventure that many are experiencing. If you disagree with the product, I understand, but try to put that aside and just watch it develop. There’s nothing more American than watching a free market start to run rampant no matter how controversial.