Cannabis is fastest growing industry in US, but California’s potential stunted
By Joe Fitzgerald Rodriguez |
The legal cannabis industry is the fastest growing industry in the United States, according to a new report from Bay Area-based investor network ArcView Market Research. Marijuana in America grew 74 percent in 2014, ArcView found, from $1.5 billion to $2.7 billion.
And though the report has made the rounds on the ‘net since Monday, one tidbit caught our eye here at SF Evergreen: California’s cannabis industry growth is stunted.
“California’s regulatory structure continues to limit its market potential,” the report’s authors wrote.
However, limited market potential is a relative phrase. Despite this handicap, the Golden State still raked in golden profits. Medical cannabis sales in California still represented half of all marijuana sales in the nation: at $1.2 billion in 2014.
This easily bests fully legalized states Colorado and Washington, but if all goes to plan next year, California may see recreational legalization as well.
The cannabis industry is at a crossroads in California. The state’s growhouses and dispensaries still operate in a legal gray area, with no statewide bureaucracy in charge of this billion-dollar baby. Multiple attempts to regulate the industry by Assemblyman Tom Ammiano (D-San Francisco) failed over his six years in Sacramento. This year, other lawmakers will try again. There’s political will somewhere: one front-runner for governor, San Francisco’s former mayor Lt. Gov. Gavin Newsom, is a supporter of legal marijuana.
“These are exciting times, and new millionaires and possibly billionaires are about to be made,” Troy Dayton, CEO of ArcView Group wrote in the report.
“Simultaneously,” he said, “society will become safer and freer.”
ArcView’s report, The State of Legal Marijuana Markets 3rd edition, predicts a major push for recreational legalization to sweep California in 2016. Advocacy groups like The Marijuana Policy Project and the Drug Policy Alliance are expected to lead the charge.
This would mean big, green dollar signs in the Golden State.
“Should an Adult Use legalization initiative pass in California in 2016,” the report’s authors wrote, “the entire industry could rapidly double in size.”
The report’s executive summary is part of a more in-depth $500 report available to the public. Its release comes on the heels of ArcView’s two-day investor conference in San Francisco, at the Fairmont Hotel.
And just Monday, Tesla and Uber funders Tao Capital Partners announced investments in marijuana-tech company MJ Freeway, according to local cannabis blog Smell the Truth. MJ Freeway aims to track seeds as they mature to plants, a massive electronic product tracking system.
“As demonstrated by MJ Freeway’s consistent revenue growth and widespread adoption, the Company clearly leads the market in the development and implementation of legal cannabis business solutions,” said Joby Pritzker, Managing Director of Investments for Tao Capital Partners, in a statement.
The investment may be one among many early signs of the tech boom’s merger with the cannabis boom. And in California, the merger of the state’s two fastest growing industries can only mean more of the green stuff (cash and kush) for all involved.
Uber diesel, anyone?[h/t ArcView Market Research]