Venture capitalists, fund managers and other sophisticated capital providers listen intently as startups and established businesses alike pitch to compete for their attention and capital. At a fancy resort in Las Vegas, with all the trimmings of fine cuisine, good wine, great entertainment, and private-suite after-parties lasting until the early morning hours, one could not help but feel that there is something truly extraordinary fueling this fire.
The scene, very reminiscent of the tech boom in the ‘90s, played out last week in the cannabis world. A ~$6 Billion industry today projected to hit ~$22 Billion by 2020 makes cannabis the fastest growing industry in America. This industry already has ~25,000 businesses, will add ~500,000 new jobs by 2020 and, by some Wall Street estimates, create $44 billion in value by 2026. All this not so much by changing habits but rather by simply legitimizing them.
Having lived through the tech boom and the craft beer boom, we are all too familiar with the inevitable and incredible rush of new people, business, ideas, capital, and innovation. Add to this a myriad of important issues related to social justice, civil rights, medical need, environmental impact and personal choice, and the word ‘industry’ itself becomes incomplete. The industry is but a part of a broader movement, and it behooves all its participants to embrace this viewpoint.
- Business Opportunity: As an industry, we are poised to experience exponential growth given the incredible success of the ballot initiatives on November 8th. At $22 billion in 2020, the industry will eclipse the size of the craft beer industry and the entire chocolate market in the U.S. At $44 billion in 2026, it will eclipse the wine industry and the organic foods market. The California market alone is expected to grow to ~$6.6 billion by 2020, with the adult-use market representing nearly 60% of that total.
- Social Justice and Civil Rights: Not only do states waste $3.6 billion enforcing outdated marijuana laws, but 88% of the 7 million marijuana related arrests from 2001 to 2010 were for simple possession. African-Americans use cannabis at similar rates to the rest of the population but represent a disproportional majority of these arrests, making this one of the big social justice and civil rights issues facing this country today. Despite over 750,000 arrests a year, prices have dropped, potency has increased, cannabis is more accessible, and is consumed at higher rates every year. It appears that the goals of prohibition have not been achieved.
- Medical Use: 63 million Americans across 28 states today have legal access to medical cannabis, known to have at least 700 recorded medical uses. While this is a staggering number, plenty of work remains to be done as ~80% of the country is still unable to access this valuable medicine. On average, after implementation of a medical marijuana law, communities experience a 25 percent lower rate of drug overdose deaths, now the leading cause of death in the United States. Studies have shown that cannabis is 114 times safer than alcohol, and legalization’s impact on violent crime, cancer, brain damage, and even death is staggering. To put things in perspective, consider that cocaine and methamphetamines are both Schedule II drugs, meaning they are considered less dangerous than cannabis.
- Environmental Impact: Industrial hemp has the potential to have substantial positive impact on our environment. Hemp grows in a variety of climates and soil types and is naturally resistant to most pests. A natural substitute for cotton and wood fiber, hemp can be pulped using fewer chemicals than wood because of its low lignin content. Its natural brightness can eliminate the need to use chlorine bleach. Hemp could spur dramatic positive ecological and economic benefits. Renewable, fast-growing hemp is a substitute for many unsustainable products like non-organic cotton (which uses more than 25 percent of the world’s insecticides and more than 10 percent of the world’s pesticides), plastics, and paper.
The business, social, civil, medical, and environmental impact of this powerful plant reminds us that we are part of a crucial movement at a crucial moment in time. After 10,000 years of use, governments simply will not remain successful at punishing people for their relationship with this compelling plant. As we participate in this movement and build this industry, it is incumbent on all of us to support the tireless efforts of organizations and individuals who have been fighting for a future where not a single person is punished for using a plant to enhance their lives.
While the pace of change has never been more rapid than it is today, it also will never be this slow again. As we move forward in an exponential manner, it is critical that a quadruple bottom line be the criteria against which change is conceived, evaluated, and implemented.