The State legal marijuana industry while still in its infancy, is emerging both domestically and internationally at a steady, yet careful pace. It is the U.S.’s fastest growing industry and it is estimated that by 2020, all of the state-legal marijuana markets combined will make for a potential overall market worth almost $15 billion annually and the potential total market value of all states legalizing marijuana could top $36.8 billion.
Marijuana plants consist of two primary components; 1) Marijuana, as a psychoactive drug, and is produced from the flowers and buds of the female cannabis plant. This is where THC (Tetrahydrocannabinoids) is produced. THC is the substance that will intoxicate you. 2) “Hemp” comes from the male plant and its stalk and seeds are used for industrial means. Industrial hemp produces very little THC and instead has a higher concentration of Cannabidiol, or CBD, which has a negative effect on THC use (the opposite of THC) and is a valuable part of hemp oil.
In the U.S. public support in favor of legalization is growing, new states are legalizing, the federal government (lawmakers showing bi-partisan support are introducing legislation to ease current laws) continues to shift its course on marijuana policy, and the medical benefits of marijuana are becoming better understood. Research is currently being done on CBD for cancer, diabetes and epilepsy.
That said, along with the massive rewards at stake, there are a host of risks involved when venturing into uncharted, highly polarized territory. For the marijuana industry, those risks and challenges include the overarching decriminalization of marijuana at the federal level in the United States, among other regulatory threats. Legal red tape can be a nightmare to wade through. The industry is incredibly fragmented, with rules that vary by state or even city and regulatory changes can happen overnight.
Investors and business owners venturing into the marijuana business typically underestimate the challenges presented, from application processes, federal, state and local laws and regulations, design, build and operations, quality control, integration, branding and a host of other considerations and how these considerations directly affect cost, typically resulting in underfunded operations.