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Nobody Promised Us a Rose Garden, Part 1

Posted by Ken Tapman on Jun 4, 2015 6:15:09 PM
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Moving the Cannabis Industry from Criminal to Legal

The US economy doesn’t spawn an entirely new industry very often and legal marijuana may well be the best ground floor opportunity we’ve seen since the early days of the Internet. The fact is that the pendulum tipped and the legal marijuana business is the fastest growing industry in the US. The best part is we are still in the early days of this budding business sector and legal marijuana is considered to be the best start up opportunity in 2015.

While the days when cannabis was only related to criminal enterprises are diminishing, the task of creating legal enterprises is still daunting. It is difficult to estimate how long it will take the Federal Government and numerous state and local governments to legalize cannabis. Despite the progress of recent years, the movement towards legalization is not without opposition at the federal, state and local levels and the cannabis industry will be opposed and even attacked by various segments of society after legalization. These attacks will target all areas of government action – from law enforcement to regulatory authorities – as well as political and private actions that can threaten the viability of the fledgling industry.

The sheer magnitude of the cannabis market means that the cannabis industry will be under constant scrutiny. The numbers speak for themselves:

  1. $2.7 billion in U.S. cannabis sales in 2014;
  2. Between $1.6 billion and $1.9 billion of legal pot sold for medical use in the U.S.;
  3. Another $600 million to $700 million sold for legal, recreational use; and
  4. $8 billion in projected revenue for legal cannabis businesses by 2018 (more than $7 billion of upside potential in the near term marketplace)

Identifying Immediate Target Areas of Vulnerability for Cannabis Related Businesses

The technology industry’s growth is based on creating new hardware and software capabilities, truly breaking new ground with revolutionary product development. The cannabis industry, however, can take advantage of history as its growth is based on applying existing business experiences and structures to an existing but previously illegal industry. In its simplest terms, the cannabis industry is following in the footsteps of alcohol’s pathway from Prohibition to legalization.

Hindsight shows an opportunity to create a roadmap for a successful new industry. The starting point is to identify points of strength and vulnerability. One of the best places to start is with published government documents that do exactly this.

Continued next week with a discussion of recent federal guidance...for more information contact Ken Tapman at

Topics: Analysis, News