Reading the Tea Leaves + International Medical Marijuana Opportunities
This time next year, adults in Colorado and Washington might be able to walk into a neighborhood shop and purchase an eighth of marijuana almost as easily as they would a six-pack of beer at a liquor store.
Or not.
Officials in both states are knee-deep in the process of developing regulations to govern the production and sale of cannabis for adult use, as mandated by voter-approved laws. Entrepreneurs, meanwhile, are making plans to capitalize on what could be a massive new market, formulating business plans and lining up funding.
But whether retail cannabis stores – and all the ancillary businesses that support them – eventually sprout up in these two states will ultimately depend on how the federal government responds.
So far, the Obama administration has been maddeningly vague on the issue, with the president and his top officials sidestepping questions about cannabis businesses in Colorado and Washington State. As we wrote about last week, the latest comments by US drug policy chief Gil Kerlikowske created more questions than answers, complicating the situation for entrepreneurs who want to start marijuana shops, grow sites and related companies.
Ask six cannabis professionals how to interpret Kerlikowske’s comments and you’ll get six different answers. Some think he indicated that the government will target marijuana businesses even if they comply with state regulations, while others are encouraged because he didn’t take a more forceful tone against the industry. A handful of observers think Kerlikowske meant that only large-scale operations are in danger. And many simply don’t know what to make of his statements.
Be extremely cautious when reading the tea leaves based on these types of comments unless/until the government clearly spells out its policies toward cannabis businesses. Even then, don’t entirely trust what you hear or read, because the federal government can always change its position overnight. Some professionals who took an optimistic view of the administration’s previous comments on medical marijuana – like the so-called Ogden memo – were burned after the government eventually backtracked on its position.
The Obama administration is keeping its cards close to the vest for the time being, which allows the government to keep all its options open. If you want to get involved in this industry, proceed with caution, prepare for the worst-case scenario, remain flexible and understand that there will likely be a high level of uncertainty for the foreseeable future.
Also last week, we wrote about how the legalization of medical marijuana in the Czech Republic could benefit some MMJ companies in the US. The opportunities are greatest for companies that provide consulting services and ancillary products such as growing equipment, inventory management software and security systems. The development underscores the immense businesses possibilities if more nations legalize MMJ and, just as importantly, raises hopes that the world is becoming much more accepting of medical cannabis.
