New Pot Laws Could Be Good For Business
ROBERT SIEGEL, HOST:
The midterm elections were good for marijuana. Voters in Oregon and Alaska approved legalization measures so a total of four states now allow recreational pot sales - the others are Colorado and Washington state. The two new markets present a lot of opportunities to make money and there is enough of an industry out there at this point to keep Chris Walsh busy. He's managing editor of Marijuana Business Daily. His publication supplies information to players in the pot business and he's joining us from Denver. Welcome to the program.
CHRIS WALSH: Thanks for having me.
SIEGEL: Who are the big players these days and are they different than they were a few years ago?
WALSH: You know, big players is an interesting term in this industry because it's been largely local for most of the industry's short history. Due to federal laws it's hard to expand outside of a particular city or state, but we're starting to see some brands emerge and some bigger companies, like Dixie Elixirs and GFarmaLabs. These companies make infused products. Think of your typical pot brownie and expand that by hundreds of different options now whether it's marijuana-infused sodas or juices or candies and you're also seeing a lot of what they call ancillary companies. These are those that provide services to the industry in numerous markets, as well.
SIEGEL: You recently interviewed Ben Cohen of Ben and Jerry's ice cream and he equated the cannabis business today to the organic food industry; that there were dedicated believers at the beginning who pushed the market and eventually the big food companies saw that there was a lot of money to be made and bought out the small guys. Are any mainstream companies already jumping into this market?
WALSH: You do have some that are starting to kick the tires. We hear often that companies in the pharma space, big ag., big tobacco, big alcohol are on the sidelines, you know, developing plans for if this becomes legal nationally.
SIEGEL: How difficult is it though for entrepreneurs to navigate the regulations and then the outright bans, which are different not only from state to state, but even sometimes between cities and counties?
WALSH: It's immensely difficult. It's unlike anything I've ever seen. I've covered airline bankruptcies in the high-tech industry at its peak and I've never seen anything like this. For an entrepreneur who's actually handling marijuana, it's very difficult and very costly in a lot of cases, too.
SIEGEL: You speak of all the regulations of marijuana where and when it's legalized, but there seem to be very some very basic regulations that aren't in place. Like you know, what is the strength of the marijuana that you're allowed to sell? You know, what defines a marijuana plant? A sort of FDA kind of work isn't present here is it?
WALSH: No, in a lot of cases it's not. I mean there's no nationwide standards or regulatory body that's overseeing, you know, growth of the plant and whether it's safe and the potency levels. And then you have other issues, as you mentioned, with packaging and Colorado has experienced that in particular with edibles, where the edibles aren't labeled correctly or they don't have the right potency and all the testing labs are different and childproof packaging issues, so there's a host of considerations from a business perspective that still need to be worked out.
SIEGEL: When you think about this business, this industry, that you cover and you know, let's imagine ahead a decade or two and in every strip mall there's some place called the joint or something where there's a franchise where people are selling cannabis. Does the product retain what its users find cool - a part of which has been it being illicit all these years?
WALSH: It really depends on the individual user. I was at a family event recently and was having a conversation with someone from my family and he said well, now that it's legal out in Colorado and Washington, it's just not cool anymore. This was always kind of the counterculture so there's definitely people who are going to feel that way and feel it's now just going to become a mainstream pastime and business like anything else.
SIEGEL: Chris Walsh, managing editor of Marijuana Business Daily and Marijuana Business Media, thanks so much.
WALSH: Thank you.
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