Revolutionizing the cannabis industry

Lately the rise of Cannabis is evident. Cannabis serves the medicinal and recreational purposes. With more than 20 states having some kind of laws involving the decriminalization it is evident that the customer demand will continue to grow. More importantly, media has slowly merged the cannabis usage and the stigma is slowly disappearing. Until recently, marijuana and marijuana users were often associated with the word dangerous and negative. With all this, the business side of the cannabis looks promising because not only the demand of cannabis will increase as time progresses but also we will need to define and incorporate a social space for its consumption. In turn, this should lead to revolutionary entrepreneurs to incorporate this business into the defined social norms. Examples are bars, coffee shops, movie theaters, etc. and with the legalization of cannabis it would be plausible to incorporate cannabis into each industry. The end goal is for businesses to strengthen the cannabis industry and in doing so their own careers. Thus, I believe that the use of marijuana will be inevitable in the United States and there will be a need to incorporate new business models into already stablished businesses.

Why is it beneficial?

According to the PEW research center nearly 53% of Americans think that the drug should be legal in contrast with 44% who want it to be illegal. Interestingly only 4 states have legalized marijuana (Arizona, Colorado, Oregon & Alaska) and so far the implications of this motion looks promising when it comes to higher tax revenues. For example in Colorado, voters approved a 15% tax on the wholesaling of marijuana and 10% sales taxes on all recreational marijuana sales to the consumer. According to the Denver Business Journal, Colorado is expected to generate 60 to 70 million and that is just on the actual product not including other possible channels to make a revenue like marketing, distribution, supplemental products etc.

Those in favor suggest that those additional needs could be used for other basic needs in the community. Cris Miles, a journalist of mic.com in his blog he states:

“We've seen the economic power of legal pot. On January 1, when recreational weed became legally available to Colorado consumers, 24 pot shop owners across the state believe they collectively made more than $1 million in a single day of business. Residents can currently purchase up to an ounce of marijuana at one time for recreational purposes. Non-residents can purchase up to a quarter ounce. State officials expect up to $578,000,000 in first-year sales revenue, as well as $67 million in tax revenue, which will be used to build schools and fund regulatory efforts.”

So the question becomes, what are we waiting for?

Where is the entrepreneurship?  

Most of the numbers are solely based on the sale of the cannabis itself. A call to action is necessary for entrepreneurs to look closely at the way our society incorporates this product into their social settings. People looking into this business need to be able to forecast and innovate ways of incorporate cannabis into already stablished entertainment businesses as well as identifying their demographics of both current and future customers.

The once prohibited drug, Alcohol, can provide us with some business practices and history in regards to a newly introduced substance and more importantly how can this flourish under an excise tax. These new innovators need to look back and see what other industries did to remain open while living under times of crisis so they could get a better understanding in terms of maximizing resources and being innovative. A clear example was the national prohibition. National prohibition occurred January 1920 to December 1933, this law prohibited any beverage that contained 0.5 percent and higher alcohol content which killed about half the country’s distilleries and breweries, and perhaps 75 percent of the wineries according to John Ruch, a journalist from Georgia. So how did companies like Old Bushmills Distillery (also known as Jose Cuervo), Jack Daniels, Anheuser-Busch, amongst others survived. For once, they started to diversify their market, they started producing yeast and near-beer, but also ice cream, soft drinks, commercial refrigerators and car bodies. Only those companies with the capacity to develop sustainable business plans and the foresight into what the alcohol industry could be survived the prohibition era.

Even with the legalization of recreational marijuana, it is still illegal to consume in public space. For example, tourists visiting Colorado cannot consume marijuana in hotel rooms or similar settings. Regardless of this, entrepreneurs are looking into ways to create a safe place to participate in the activity. A different type of lounges have emerged around the globe. The website http://www.budpubs.com/ has a directory of locations where you can use the product and socialize. For example Space Lounge in Los Angeles California welcomes medical marijuana patients and offers a place to medicate. They have a dab bar and lounge with nice dab rigs, a good concentrate menu, 2 Big Screen TV and friendly atmosphere and offer free items to first time visitors. The Treehouse in LA found a way to comply with the law by making theirs establishment a “bring your own bud” business. They make profits by charging an entrance fee, supplying a variety of wraps, and rental fee for smoking apparatuses. This is where opportunity arises, entrepreneurs need to look at patterns and study where people chose to spend their free time. According to TIME magazines Americans average more than 3 hours watching TV and a portion of that is devoted to time spent in the movie theaters.  And this is where a group of young entrepreneurs are looking to incorporate cannabis.

Growing industry

At the University of Southern California Lloyd Grief Center for Entrepreneurship, a group of students is developing a business idea incorporating cannabis. The group is developing the first cannabis friendly movie theater. According to Johnny de La Cruz, a student majoring in entrepreneurship at USC, he stressed that the idea is innovative and with great chances of success. The group identified two important points about their idea. First, the movie theater industry in decline with a need of a boost and the need of a social place for cannabis consumption. This emergent business could solve some of the pains that each industry is facing. When asked about some of the challenges they spoke about licensing issues and some modification to the current buildings when it comes to movie theaters. They will venture this business in Colorado due to the current laws in California and they are already taking to mechanical engineers to modify the ventilation system to avoid irritability caused by smokers to non-smokers. Similar events have happened in Colorado. In May 2014, The Colorado Symphony Orchestra staged a marijuana-friendly concert where participants enjoyed a brass quintet and cannabis in one sitting.

What are the challenges?

Conversely many scholars argue that the process is not that simple, that legalizing cannabis won’t just bring the cash right in. Many economist believe that the expected amount of revenues are exaggerated. Oppositionist also argue that the legalization of the drug would cause many disparities in the social context because the easy availability would create new users instead of saving the current users despite the easiness to find the drug nowadays. But the bigger challenge is using the product in a somewhat restricted environment, people looking into this need to look at the techniques the alcohol companies used during the prohibition area and the cigarette industry for how to create a safe place for consumption. A clear example is Las Vegas, Nevada law allows for casinos that exceed 15 slot machines as well as nightclubs and bars that do not serve food to admit smoking and it seems to work well. This law also tied high tech ventilation system to avoid health concerns within the casinos and clubs.

The use of cigarettes is surely a big factor for lung damage, in fact many argue that smoking any kind of plant matter is responsible for pulmonary disease and lung cancer. According to the Center for Disease Control Cigarette smoking is responsible for more than 480,000 deaths per year in the United States, including nearly 42,000 deaths resulting from secondhand smoke exposure. This is about one in five deaths annually, or 1,300 deaths every day. However, Dr. Mark Pletcher, associate professor of epidemiology and biostatistics at the University of California, San Francisco and the lead author of a study trying find a linkage between marijuana and lung diseases stressed the following:

“Marijuana may have beneficial effects on pain control, appetite, mood, and management of other chronic symptoms. Our findings suggest that occasional use of marijuana for these or other purposes may not be associated with adverse consequences on pulmonary function. It is more difficult to estimate the potential effects of regular heavy use, because this pattern of use is relatively rare in our study sample; however, our findings do suggest an accelerated decline in pulmonary function with heavy use and a resulting need for caution and moderation when marijuana use is considered”

The study showed no pattern between lung diseases and marijuana but it did find a decline in the performance of the lungs. Something users and potential businesses need to consider.

The big picture

Colorado and Washington are currently leading this developing industries followed by Alaska, Oregon and Washington cannabis is slowly becoming a product for further development as well as an introduction to open spaces without the negative stigma many had in the past. With the right approach and productive plan cannabis will be socially acceptable just like alcohol and as available as cigarettes. At the moment, the market will be geared towards experienced users with high tolerances but as the industry progress entrepreneurs will look to diversify. Timing could not be better and the 21^st century is ready and equipped to turn a vice into a profitable social norm.

Works Cited

Bronson, Po. "How We Spend Our Leisure Time." Time. Time Inc., 23 Oct. 2006. Web. 17 Oct. 2015.

"Fast Facts." Centers for Disease Control and Prevention. Centers for Disease Control and Prevention, 15 Apr. 2015. Web. 17 Oct. 2015.

Motel, Seth. "6 Facts about Marijuana." 6 Facts about Marijuana. Pew Research Center, n.d. Web. 10 Oct. 2015.

Raghavan, Divya. "How Much Your State Could Make From Legalized Marijuana." NerdWallet Credit Card Blog. N.p., 22 Sept. 2014. Web. 17 Oct. 2015.

Ruch, John. "Stupid Question (TM) Archives." : Whiskey Companies During Prohibition. N.p., 7 Mar. 2002. Web. 17 Oct. 2015.

Szalavitz, Maia, and Maia Szalavitz. "Study: Smoking Marijuana Not Linked with Lung Damage | TIME.com." Time. Time, 12 Jan. 2012. Web. 17 Oct. 2015.

Warner, Joel. "The Colorado Symphony Staged a Marijuana-Friendly Classical Concert. It Wasn’t Easy." Puff Puff Brass. N.p., 29 May 2014. Web. 17 Oct. 20