3 Developments To Watch In Cannabis 2015

32993072_sThe year has barely begun and while there are still many projections about what’s going to happen in the cannabis industry in 2015, major developments are already in motion. Here’s a closer look at three such developments that marijuana producers, entrepreneurs, and investors should watch:

The Shift To Republican Control

Voters may have approved recreational marijuana in more states (Alaska, Oregon, and Washington DC), but they have also placed Republican candidates in Capitol Hill. It’s no secret that conservative politicians are less friendly to the cannabis movement than the liberal ones; now that the GOP controls the Senate and the House, the marijuana industry is on its toes.

Laws on marijuana have advanced over the course of President Barack Obama’s administration, and it now remains to be seen whether conservatives are going to take on those laws.

Fortunately, many conservatives also staunchly support states’ rights and less government. This could mean that the Hill’s shift to Republican control many not actually have such a big effect on the cannabis industry. According to Allen St. Pierre, who is executive director of the advocacy group NORML based in Washington DC, the shift is not considered an overt threat to state-level reforms.

For now, businesses are taking a wait-and-see approach. Fairly soon, it should become clear how Republicans will respond to marijuana at the federal level.

New Markets On The Verge Of Budding

Illinois, Massachusetts, and Nevada – these three states are worth keeping an eye on. All three are expected to have medical marijuana dispensaries open in 2015, with each market potentially generating significant revenues.

But it is not without unique hurdles and delays.

Illinois, for one, has legalized medical cannabis in 2013, but legislators have taken much time planning out how to properly manage the industry. Entrepreneurs have complained not only about the amount of time to get the rules in place, but also about the state’s licensing costs, which are some of the highest medical marijuana business fees in the country.

Outgoing Gov. Pat Quinn deliberately made MMJ laws stringent, suggested Attorney Joan Lebow, from Chicago’s Thompson Coburn, a firm practicing cannabis law in several states. The statute, she said, is very demanding, based on her assessment of many states.

It’s still not clear when Illinois will select the companies to receive the 60 dispensary permits and 21 cultivation licenses allowed by law. Initially, the goal was to name winners by the end of the year, but officials are currently still vetting applicants.

In Massachusetts, meanwhile, dispensaries are poised to start soon, but the industry is bracing for potential political setbacks. A governor-elect whose stance on marijuana is less than friendly is about to take office, raising the possibility of more legal wrangling over cannabis licensing.

The state has already been criticized for the way it handled licensing and the delays in starting its program. Boston Globe recently released a report showing how the licensing process in Massachusetts was laden with landmines, thanks in part to conflicts of interests.

Dispensaries succeeded, however. In at least one lawsuit, a judge ruled that patients in the state have waited long enough for MMJ relief, and now, dispensaries are set to open early this year. The state has granted 15 preliminary dispensary licenses, with more possibly coming in the next months.

Finally, in Nevada, the medical cannabis sector sees a great expansion as dispensaries in the state can serve patients from anywhere in the country. This is because a reciprocity law allows tourists who have MMJ cards to acquire medicinal cannabis while they are visiting the state.

Nevada state Sen. Richard Segerblom, representing Las Vegas, said that this move was calculated and will give tourists another reason to visit Sin City.

The law is anticipated to substantially grow the medical marijuana sector in the state, which is currently relatively small at only 7,500 patients.

The state of Nevada recently granted 55 preliminary dispensary licenses, plus more than 300 other types of permits for MMJ businesses. However, like in Massachusetts, there have been controversies and lawsuits over licensing, and this could delay the opening of some businesses.

Business Accelerators

Scores of businesses are working hard to keep pace with the fast-growing legal marijuana industry. But many of them still go nowhere despite the promises of the Green Rush. This is because such companies lack the startup capital, a business plan, and even basic knowledge of the industry. This is a setup for complications and failure.

Investors, for their part, are either unwilling or unable to put money into this space. It doesn’t help that company valuations are frequently out of touch with reality.

A potential solution to these issues is the presence of business accelerators, which are already considered key components in industries like technology and agriculture. Accelerators help create the infrastructure needed for promising businesses and entrepreneurs to thrive. Some forms of support that businesses receive from accelerators are investment, mentoring, and networking services.

In the marijuana industry, a 12-week accelerator program for cannabusinesses is now offered by high-profile investor network ArcView Group, partnering with Colorado-based CanopyBoulder. The program will provide mentoring in exchange for CanopyBoulder’s and ArcView’s 9.5% stake in each participating company. Twenty companies will be selected for aid in 2015; they will receive a $20,000 investment plus various support services.

This development may prove crucial not only to individual marijuana businesses, but also to the industry in general, as it could lead to a better environment for startups.

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