What happens to the cannabis industry when marijuana is legal?

By Seth Kaper-Dale

What happens to the entire cannabis industry when marijuana is legal in a place? What happens to the cannabis cafes, do they close? Will there be any competition on the street? Will dispensaries turn into black market marijuana dispensaries? These questions are being asked as most of the big cannabis companies are operating on national and not local levels.

Cannabis is not legal in all states, but it is legal in a number of states in a relaxed fashion. All 100 states have varying cannabis laws, many more restrictive than what is currently used for alcohol. With that a limited number of states may expand the use of cannabis without a lot of fanfare and this is the question that no state has tackled head on. How can local people and municipalities create guidelines and laws that regulate cannabis and create a level playing field for residents of the cannabis businesses to operate?

Now some states are beginning to tackle this issue and the answer may be, let the market decide. Most of the nation’s cannabis industry operates out of state and does not operate on the local or state level. One company that is doing just that is CANN LLC. This Texas based company offers services to residents of more than 15 states. The company has approved some locations in Austin, Texas and one location in Sacramento, California. CANN is a holding company with 19 dispensaries in Texas, 19 dispensaries in California, three in Arizona, one in Colorado, two in Illinois, two in Oregon, one in Washington, and seven more in Nevada.

The company is not afraid to test the waters with locations that are three blocks or one city away from one another. CanN has already seen a slowdown in revenue per location as the market is adjusting to the new laws that are created by the federal government. These laws were created to help those areas of the country that need it the most. That could take time, but can’t take more than a few years.

Cannabis is projected to be a $100 billion industry by 2026. It is just beginning. As the laws develop on the local and state level, many states are establishing more-restrictive laws as to how local dealers can operate. Nevada and Arizona have passed laws that bar local sales of cannabis to residents over 21 years of age. California’s law is becoming a national model as it is limiting how much cannabis a resident can possess. As with most issues that are hot-button topics, the state with the most common message is let the marketplace decide on how many marijuana shops and other establishments residents can use in their local areas.

Seth Kaper-Dale is the Founder and CEO of Cannabis Sativa, a non-profit organization dedicated to the research and education of the cannabis plant, its medical uses, its potential in recovery from substance abuse, and its use in the treatment of mental illness.


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