Capitalizing On The Billion Dollar Marijuana Industry

December 28th, 2010 - By TheEditor

by Alexander Cain

Headlines focused on legalizing both medicinal and recreational marijuana have been swirling around for the past few years. Small doses of medicinal marijuana have been legalized in some states such as California, however the idea of legal marijuana hasn’t been accepted throughout the country. While the associated health benefits are still being researched, many people are thankful for the chance to be able to use this medication to treat their various medical conditions. Amongst the small amount of states who have legalized medical marijuana, there has been a surge in the amount of entrepenuers looking to tap into this industry.

As reported in SmartMoney, the medicinal marijuana industry is booming. Currently, fifteen states and the District of Columbia allow medicinal marijuana with three states approaching approval by 2011. With 43,000 estimated dispensaries spread throughout the United States, many people are interested in tapping into this market early in the hopes of catching all the profit if marijuana is legalized.

According to a recent Gallup poll, 44 percent of Americans are in favor of legalizalition of the drug, doubling the total percentage from 15 years ago. Popularity of  the drug is soaring and what’s at stake has many venture capitalists and investors interested: $36 billion dollars, the estimated worth of the marijuana illegal industry. Many states are examining the legalization and taxation of marijuana as a way of coping with growing deficits. While the marijuana industry could potentially offer investors great returns, the industry is volatile due to government regulation’s influence.

As part of the decision to allow for medicinal marijuana, all dispensaries are required to file as non-profits instead of for-profit industries. This means dispensaries are facing tougher restrictions on profit-sharing and face greater expectations for community outreach. Many current dispensaries offer community outreach including addiction counseling and offer free weed to the ailing poor. Marijuana is still a very unstable industry and is only one government intervention away from disappearing, but the profit is still there.

Smale Deangelo, owner of a small dispensary in Maine, estimated his earnings as much as $50,000 a day. Many people anxiously wait for marijuana to be legalized. While there doesn’t seem to be any signs of legalization within the next two to three years, there are signs of progress. Marijuana will continue to thrive as part of a sub-economy throughout the United States.  Illegal or not one thing is for certain, someone will continue to profit from this plant.

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  • Floots

    "According to a recent Gallup poll, 44 percent of Americans are in favor of legalizalition [sic]"

    Incorrect. The most recent Gallup poll shows 46% in favor of legalization, which makes your earlier statement, "the idea of legal marijuana hasn’t been accepted throughout the country" quite dubious.

    "[T]here doesn’t seem to be any signs of legalization within the next two to three years". There are legalization initiatives currently underway in at least three states: Washington, Oregon, and California. On the east coast, keep your eyes on Mass, and RI. By 2012 at least one of these states will have legalized recreational use.

    Lastly, last week Pat Robertson spoke out in favor of marijuana decriminalization. The tide has turned.

  • malcolmkyle

    Here are just some of the many studies the Feds wish they'd never commissioned:

    01) MARIJUANA USE HAS NO EFFECT ON MORTALITY:

    A massive study of California HMO members funded by the National Institute on Drug Abuse (NIDA) found marijuana use caused no significant increase in mortality. Tobacco use was associated with increased risk of death. Sidney, S et al. Marijuana Use and Mortality. American Journal of Public Health

    . Vol. 87 No. 4, April 1997. p. 585-590. Sept. 2002.

    02) HEAVY MARIJUANA USE AS A YOUNG ADULT WON'T RUIN YOUR LIFE:

    Veterans Affairs scientists looked at whether heavy marijuana use as a young adult caused long-term problems later, studying identical twins in which one twin had been a heavy marijuana user for a year or longer but had stopped at least one month before the study, while the second twin had used marijuana no more than five times ever. Marijuana use had no significant impact on physical or mental health care utilization, health-related quality of life, or current socio-demographic characteristics. Eisen SE et al. Does Marijuana Use Have Residual Adverse Effects on Self-Reported Health Measures, Socio-Demographics or Quality of Life? A Monozygotic Co-Twin Control Study in Men. Addiction. Vol. 97 No. 9. p.1083-1086. Sept. 1997

    03) THE "GATEWAY EFFECT" MAY BE A MIRAGE:

    Marijuana is often called a "gateway drug" by supporters of prohibition, who point to statistical "associations" indicating that persons who use marijuana are more likely to eventually try hard drugs than those who never use marijuana – implying that marijuana use somehow causes hard drug use. But a model developed by RAND Corp. researcher Andrew Morral demonstrates that these associations can be explained "without requiring a gateway effect." More likely, this federally funded study suggests, some people simply have an underlying propensity to try drugs, and start with what's most readily available. Morral AR, McCaffrey D and Paddock S. Reassessing the Marijuana Gateway Effect. Addiction. December 2002. p. 1493-1504.

    04) PROHIBITION DOESN'T WORK:

    The White House had the National Research Council examine the data being gathered about drug use and the effects of U.S. drug policies. NRC concluded, "the nation possesses little information about the effectiveness of current drug policy, especially of drug law enforcement." And what data exist show "little apparent relationship between severity of sanctions prescribed for drug use and prevalence or frequency of use." In other words, there is no proof that prohibition – the cornerstone of U.S. drug policy for a century – reduces drug use. National Research Council. Informing America's Policy on Illegal Drugs: What We Don't Know Keeps Hurting Us. National Academy Press, 2001. p. 193.

    05) PROHIBITION MAY CAUSE THE "GATEWAY EFFECT"?): U.S. and Dutch researchers, supported in part by NIDA, compared marijuana users in San Francisco, where non-medical use remains illegal, to Amsterdam, where adults may possess and purchase small amounts of marijuana from regulated businesses. Looking at such parameters as frequency and quantity of use and age at onset of use, they found the following: Cannabis (Marijuana) use in San Francisco was 3 times the prevalence found in the Amsterdam sample. And lifetime use of hard drugs was significantly lower in Amsterdam, with its "tolerant" marijuana policies. For example, lifetime crack cocaine use was 4.5 times higher in San Francisco than Amsterdam. Reinarman, C, Cohen, PDA, and Kaal, HL. The Limited Relevance of Drug Policy: Cannabis in Amsterdam and San Francisco. American Journal of Public Health. Vol. 94, No. 5. May 2004. p 836-842.

    06) OOPS, MARIJUANA MAY PREVENT CANCER (PART 1):

    Federal researchers implanted several types of cancer, including leukemia and lung cancers, in mice, then treated them with cannabinoids (unique, active components found in marijuana). THC and other cannabinoids shrank tumors and increased the mice's lifespans. Munson, AE et al. Antineoplastic Activity of Cannabinoids. Journal of the National Cancer Institute. Sept. 1975. p. 597-602.

    07) OOPS, MARIJUANA MAY PREVENT CANCER, (PART 2):

    In a 1994 study the government tried to suppress, federal researchers gave mice and rats massive doses of THC, looking for cancers or other signs of toxicity. The rodents given THC lived longer and had fewer cancers, "in a dose-dependent manner" (i.e. the more THC they got, the fewer tumors). NTP Technical Report On The Toxicology And Carcinogenesis Studies Of 1-Trans- Delta-9-Tetrahydrocannabinol, CAS No. 1972-08-3, In F344/N Rats And B6C3F Mice, Gavage Studies. See also, "Medical Marijuana: Unpublished Federal Study Found THC-Treated Rats Lived Longer, Had Less Cancer," AIDS Treatment News no. 263, Jan. 17, 1997.

    08) OOPS, MARIJUANA MAY PREVENT CANCER (PART 3):

    Researchers at the Kaiser-Permanente HMO, funded by NIDA, followed 65,000 patients for nearly a decade, comparing cancer rates among non-smokers, tobacco smokers, and marijuana smokers. Tobacco smokers had massively higher rates of lung cancer and other cancers. Marijuana smokers who didn't also use tobacco had no increase in risk of tobacco-related cancers or of cancer risk overall. In fact their rates of lung and most other cancers were slightly lower than non-smokers, though the difference did not reach statistical significance. Sidney, S. et al. Marijuana Use and Cancer Incidence (California, United States). Cancer Causes and Control. Vol. 8. Sept. 1997, p. 722-728.

    09) OOPS, MARIJUANA MAY PREVENT CANCER (PART 4):

    Donald Tashkin, a UCLA researcher whose work is funded by NIDA, did a case-control study comparing 1,200 patients with lung, head and neck cancers to a matched group with no cancer. Even the heaviest marijuana smokers had no increased risk of cancer, and had somewhat lower cancer risk than non-smokers (tobacco smokers had a 20-fold increased Lung Cancer risk). Tashkin D. Marijuana Use and Lung Cancer: Results of a Case-Control Study. American Thoracic Society International Conference. May 23, 2006.

    10) MARIJUANA DOES HAVE GREAT MEDICAL VALUE:

    In response to passage of California's medical marijuana law, the White House had the Institute of Medicine (IOM) review the data on marijuana's medical benefits and risks. The IOM concluded, "Nausea, appetite loss, pain and anxiety are all afflictions of wasting, and all can be mitigated by marijuana." The report also added, "we acknowledge that there is no clear alternative for people suffering from chronic conditions that might be relieved by smoking marijuana, such as pain or AIDS wasting." The government's refusal to acknowledge this finding caused co-author John A. Benson to tell the New York Times that the government "loves to ignore our report … they would rather it never happened." Joy, JE, Watson, SJ, and Benson, JA. Marijuana and Medicine: Assessing the Science Base. National Academy Press. 1999. p. 159. See also, Harris, G. FDA Dismisses Medical Benefit From Marijuana. New York Times. Apr. 21, 2006