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Legal weed has been a boon for states: a recent study said recreational marijuana could provide over $132 billion in tax revenue and 1 million jobs over the next ten years, and Colorado alone raked in almost $250 million last year. It's also been a benefit to consumers: pot prices have dropped precipitously in legalized states.
But that doesn't mean legalization has been great for cannabiz owners. While it's all well and good to have illicit business become legit -- in the eyes of state law at least -- many marijuana entrepreneurs are finding the increased competition, statutory regulation, and decreased profits too much to bear. So, did you miss the weed biz window already?
Can You Overdose on Weed?
As noted by the Associated Press, Oregon has become a cautionary tale for marijuana startups. The state is drowning in dope -- so much so that state regulators announced an end to new applications for marijuana licenses until the severe backlog of existing applications is addressed. In an effort to eradicate Oregon's black market for weed, the state "decided not to cap licenses; to allow businesses to apply for multiple licenses; and to implement relatively inexpensive licensing fees." As of last week, Oregon had already granted 1,001 producer licenses and still had another 950 in process.
The Beaver state is also sitting on almost one million pounds of cannabis, or approximately four ounces per resident. As such, the retail cost of recreational marijuana is plummeting more than 50 percent over the past year. The decline in prices coupled with the increase in competition has led many potential potrepreneurs are already over Oregon and not even considering California. "For the way the program is set up, the state just wants to get as many people in as possible, and they make no bones about it," L.A.-based marijuana business attorney Hilary Bricken, told the AP. "Most of these companies will fail as a result of oversaturation."
Stuck in the Legal Weeds
As an entrepreneur, you're not afraid of a little competition, right? After all, you got into this business thinking you could do it better than anyone else, regardless of how many elses there are out there. But even if you're ready and willing to enter the legal weed market, are you able? Even though Oregon didn't cap its marijuana licenses, it has since stopped accepting new ones, at least for the time being. And California did limit theirs.
To find out the specific licensing requirements and regulations in your state, talk to an attorney.