With projections in the billions, it shows no signs of slowing.“California presented to people a new model for the American dream -- one where the emphasis was on the ability to take risks, the willingness to gamble on the future.”
Historian H.W. Brands was referencing the California Gold Rush of the mid 1800s when he wrote these words, but he could have been writing about the Green Rush that is taking place right now. Like the Gold Rush, the Green Rush got its start in California, but instead of being a flash-in-the-pan industry, green is growing and spreading across the entire country like wildfire, and just getting bigger.
It began in 1996, when the Golden State became the first to legalize medical marijuana in the U.S. Since then, 33 states and Washington, D.C., have followed, with ten of those giving the legal thumbs-up for recreational use. Along with all this legalization comes money. Lots of it. The Marijuana Business Factbook is projecting marijuana sales to soar to nearly $22 billion by 2022.
Related: The Particulars of Marketing Your Cannabis Business: Experts Share Their Secrets
There aren’t a tremendous number of industries with growth projections like that, which is why entrepreneurs and big-business leaders are rushing to find their place in the cannabis ecosystem. This past summer, Corona brewer Constellation Brands made massive waves by investing $3.8 billion into Canadian marijuana grower Canopy Growth Corp. And according to The Wall Street Journal, Heineken and Molson Coors Brewing Company are close behind, having announced development deals for cannabis-infused drinks.
“We are witnessing a rapidly accelerating trend of corporate investment by Big Alcohol into cannabis-related companies as they realize the evolving social-lubricant-substitution story that is occurring -- cannabis instead of alcohol,” says Gregg Smith, founder of venture investment firm Evolution Corporate Advisors.
So does that mean it is too late for startups and solo entrepreneurs to get in on the action? No way, says Smith. “Many of these companies are now racing to grab a cannabis dance partner and can provide scale, credibility, and capital, yet opportunities will still exist for smaller quality-cannabis-product makers.”
And it isn’t just Big Alcohol getting in on the green game. Computer giant Microsoft partnered with KIND to provide seed-to-sale tracking software solutions; massive retailers like Walmart, Home Depot, and Amazon sell growing equipment; and last year, Jack in the Box announced a plan to offer a weed-themed Merry Munchie Meal for $4.20 in select California locations.
But as much as big companies have big bucks to put behind these initiatives, they don’t always love taking big risks. And that can be a great advantage for fearless and nimble entrepreneurs, says Jon Cooper, founder and CEO of Ebbu, a leading cannabinoid research firm based in Colorado. “If your goal is to eventually be bought out, it is critical to think about what big companies would want to buy versus build. If the goal is not to get bought out, there is still going to be plenty of room to carve out a niche in the industry.”
Those niches span from growing to packaging to tech. Says Drake Sutton-Shearer, founder and CEO of PrØhbtd Media, a leading cannabis media and marketing company: “We’re still on the ground floor, and the market is wide open for entrepreneurs to enter the business of cannabis.”
So where do you start? For the uninitiated, the number of points of entry into the cannabis industry can be overwhelming. There are dispensaries, delivery services, edibles, medical usage, cultivation, and CBD oil, just to name a few. Before you try your luck into any vertical, experts in the field have one overarching piece of advice for budding entrepreneurs: Learn before you leap. “Read, go to conferences, and ask people for advice,” says Sutton-Shearer. “It’s important to get to know local policymakers and law enforcement officials where you want to start your business,” adds Erik Blakkestad of client relations for Electrum Partners, an advisory services firm specializing in medical and recreational cannabis.
And while you’re gaining all this new information, think about what you already know -- office operations, packaging, software development, for example. Not all marijuana-based businesses touch the plant. A whole ancillary industry has sprouted to support the cannabis economy, including accountants, lawyers, software developers and marketing whizzes. Robert Fireman, CEO of MariMed, suggests that skills and insights you have from parallel industries will “set you apart and add indisputable value to a cannabis company.”
Looking into the not-too-distant future, Fireman sees explosive growth potential in tech, cultivation and production methods, distillation practices, branding, packaging, and merchandising. “In particular, there is a significant growth opportunity in implementing FDA manufacturing standards. Cannabis companies that meet GMP standards will be well-positioned when federal legalization occurs,” he says.
Will legalization occur in the coming years, and if so, what effect will it have on cannabis entrepreneurs? Most experts believe that the end of federal prohibition will blow the doors off the industry. Will you be there and poised to reap the benefits? That’s what this special issue is all about: informing and inspiring the next great innovators of the Green Rush. Are you ready to stake your claim?