From smallest to largest, whether you’re a one-woman home growing hobbyist with a medical grow permit, or a massive commercial dispensary of recreational cannabis in a Free State, your future access and legal safety are not only increasing, but are in tremendous flux, and the volatile market promises to make or break those trying to surf the wave.
In California, a federal criminal case hinges upon whether cannabis is even illegal at all, with a ruling expected by mid-February. While the ruling is non-binding outside of its federal District or in State courts, the legal argument is equally applicable in most jurisdictions, and will likely produce similar results if re-tried. The results, commercially, are unpredictable and momentous.
At the State level, evidence of market-opening shifts have occurred from coast to coast, whether Oregon’s recreational ballot initiative, or Rhode Island’s new Governor Gina Raimondo announcing the inevitability of legal cannabis and the need to manage it wisely.
As big conglomerates line up at both federal and state levels to exercise lobbying for investment exclusivity, a truly epic glut of outdoor and even indoor excess 2014 cannabis has flooded US markets, causing prices to bottom out, street dealers to be caught holding the bag, and law-abiding dispensaries (some of whom invested vast sums of money in compassionate medical ventures) unable to compete with street prices and increasingly facing rough seas.
Even at the municipal level, cannabis growers who meet state and federal guidelines can run into difficulties with local zoning and planning ordinances. Such box-ticking serves a legitimate function with regard to fire and electrical safety, but can be expensive and time-consuming. In the worst case scenarios, municipal governments in California have caused considerable consternation to cannabis growers, and add yet another dynamic to the ever-changing cannabis regulatory regime.
Some common sense practical advice:
For home growers: check your State’s law carefully, as well as the current federal allowances, and don’t overlook local planning restrictions. If you’re allowed to grow, you can almost certainly grow enough for your needs, affordably, but don’t imagine that you’re going to get rich, make a living off of cannabis, or deftly outmaneuver other growers to make lots of money. It won’t work out that way, in the end.
For big investors: Your best bet in the long run is not going to be lobbying for regulatory lock-outs of competitors, but instead, by acquiring the best talent and giving the best value for money. When your lobbyists convince legislatures to make over-burdensome regulations to lock out small competitors, you won’t be able to come close enough to street prices while still complying with the regulations you fought for — there’s simply too much high grade on the street this year.
For everyone: Don’t gamble on a huge set-up in anticipation of impending regulatory relaxation. A few shrewd investors may make a quick buck this way, but legislative reform has a funny way of stalling, and you don’t want to be that sorry businessman caught paying interest on a loan for $150,000 worth of LED lights and several warehouse mortgages, sitting there twiddling your thumbs while bureaucrats bounce your applications around like a paper basketball for 15 months.
-Alan Gordon, Buxton Bugle Contributor