The war has been won.
Public opinion has shifted and the rest is just a matter of time.
There are entrepreneurial lessons to be learnt from the success of the now booming marijuana industry. Built off the back of the entrepreneurial spirit, businesses in this sector have seen far more risk and persecution than most startups in sectors like tech, finance and transport that we know and love today to have driven change.
Today, weed culture has not only entered the popular mainstream, it is being lauded as a booming industry of the future with billions of investors’ dollars being poured into growing it.
A 2019 report published by Arcview Market Research has projected global consumer spending in the legal cannabis trade to hit an estimated $16.9 billion – a 38% increase from 2018, and expects further accelerated growth to take it the $31.3 billion mark in 2022.
Universities have begun to offer MBAs with specialised focus on the marijuana trade, and cannabis stocks sit on the cusp of explosive growth in this bullish sector.
Related: Read about cannabis investing by Barbara Paley, New York-based investor and dealmaker.
While many successful startups began their work in legally grey areas – sectors that were unregulated because simply, no one had done it yet – how many can say they started criminalised, fought a war of politics, prejudices and misinformation, and won?
And win big they did.
Here’s a look at some of the lessons we’ve learnt about entrepreneurship from the success story that is the cannabis industry:
Legitimizing the Cannabis Industry Through Value
After decades of prohibition, the cannabis industry is suddenly on the lips of politicians, corporate giants, and the public alike. How did this happen? The answer lies in its value.
The cannabis industry has always had clear value to those that participated in it illegally, and one can speculate that it was prohibited only because lawmakers didn’t have a clear vision on how to monetize it efficiently. If you look through all the years of scare tactics, hard-line laws, and the sheer number of cannabis-related arrests – there must be a point that begs the question – what changed their mind?
It’s all about value. Suddenly, the cannabis industry has been taken, seeming overnight, by those who’ve strived to keep it under the rug for as long as possible. Lawmakers who’ve voted against marijuana reform countless times, corporate CEOs that have funded anti-cannabis campaigns, and scientists who, only previously, claimed that cannabinoids lacked any clear benefit.
How much value was needed to change the mind of so few? An estimated $66 billion, perhaps. Grand View Research analysts expect that the global marijuana industry will be worth an eye-popping $66 billion by 2025. Regardless of laws, this figure will change anyone’s tune regarding a controversial subject.
Tobacco, alcohol, pharmaceutical, biotech, and agricultural giants have taken up the flame from their predecessors: twenty-something and younger individuals who sold marijuana on street corners with quick handshakes and brief interactions. It wasn’t until billion-dollar corporations realized that the time was ripe to systematize the cannabis industry to create an entirely new economy.
Now that cannabis laws have trickled into various countries, most notably the United States and Canada, we’re seeing an explosion in growth that hasn’t been seen in decades. Job growth in the marijuana sector has grown exponentially, effectively reducing the number of those unemployed.
This movement from the black market to regulated sales has pushed forth a healthy economy for many communities. Canada, for example, has now grown into one of the leading countries for cannabis production. Many of their citizens are involved in marijuana-related jobs, which has boosted incomes throughout the nation. Although Canada has always remained neutral towards cannabis, this new opportunity has driven its population to mainstream acceptance.
The same can be said for the United States, who has been the leading country in repressing anything cannabis-related; even industrial hemp that lacks THC. Now, with so many legalized states, the attitude towards cannabis has shifted significantly.
This acceptance didn’t come out of the blue, but rather, a wave that had accumulated an immense amount of momentum. This wave of cannabis reform came through the idea that marijuana was the next booming commodity.
Where to go from here? This was the question that lawmakers in legalized cannabis countries had to ask themselves. Just like the alcohol and tobacco industry, business fees, and tax revenue are the primary goals for jurisdictions to generate profit from this new economy.
Now, individuals are seeing legal cannabis storefronts pop up in new locations rapidly. As though from one day to the next, marijuana businesses have become commonplace, thus fueling a plethora of benefits for regulators, entrepreneurs, and the public.
The cannabis industry wouldn’t be where it is today without the cooperation of these three: the lawmaker, the entrepreneurial spirit, and the consumer.
Regulators are more apt to allow cannabis-related businesses because of the tax revenue that they generate. Entrepreneurs benefit from operating in an unsaturated market, and thus, increased exposure and profitability. The overall public shed its stigma due to the normalization of marijuana, thus feeding into the circle of the cannabis economy.
On The Cusp: Cannabis Entrepreneurs
When it comes to any industry, there must be innovative entrepreneurs that lead the charge into the unknown. The cannabis industry is no different, and we’ve seen the most significant success stories in recent memory originate directly from the marijuana sector.
If you pay attention to cannabis industry-related news, then you’re likely familiar with the names Aurora Cannabis Inc., Canopy Growth Co., Lowell Farms, and Tilray. The individuals that started these companies began at the cusp of legalization, therefore acted as the precursor to widespread change.
When Canopy Growth began operations in 2013, most wouldn’t have believed that they would become the largest cannabis corporation to date. Currently worth over $12 billion, Canopy Growth has quickly become a household name, especially for those in Canada. This spurred many companies to follow in its footsteps to be the next big hit in the marijuana industry.
Once the disruption of cannabis prohibition occurred, the number of cannabis entrepreneurs spread like wildfire to find a niche market to make the most significant impact. Edibles, concentrates, beauty products, and more have all been the focus of a large number of cannabis businesses.
It’s not just the consumer market that’s driven this newfound entrepreneurial spirit, but also the stock market. Starting a cannabis business has been a two-fold success: at one point for the physical cannabis product, and the other for the shares in the company that has recently soared in value.
What’s incredible is that the cannabis trade, once strictly for the black market, is now dominated by high-profile business people, investors, and politicians once they realized how disruptive this market could be.
There’s never been anything in recent memory that’s rivaled that of big tobacco and alcohol corporations. It’s become such a threat, that corporate giants such as Constellation Brands and Altria have backtracked on their previous denouncements of cannabis and are now heavily invested.
This shows how quickly the overall mindset can change once real disruption occurs.
Left Behind: The Early Pioneers of Cannabis Entrepreneurs
When you think of cannabis entrepreneurs, most imagine a high-class individual that’s riding the green wave of success.
All of this sounds like a genuine success story until you mention those who’ve been left behind after the dust settled. The casualties of the wars against marijuana that have been waged across the globe have taken countless names. Mass incarcerations, deaths, and broken families are the facts that the legalized cannabis movement has seemingly forgotten.
What’s worse, is that those who survived prohibition are unable to participate in the current legal market if they were convicted for cannabis-related crimes in the past.
Law and society saw these early entrepreneurs as criminals, and yet, the current set of entrepreneurs is hailed as revolutionaries. Although movements have been made to clear the names of those who were convicted under outdated marijuana laws, there are still clear and present problems.
Canada brought forth a progressive plan to expedite pardons for previous cannabis convictions, but only for those convicted of simple possession. This means that anyone who was caught selling, producing, or buying large amounts did not fall into this category. To marginalize this group further, anyone who’s applying for a cannabis license must not have been convicted of a cannabis-related crime.
The same can be said in the United States, which has arrested over 8 million individuals from 2001 to 2010 alone. Although not every state in the US has voted for legalization, this number goes to show the vast amount of individuals who are barred from entering the legal marijuana industry.
As time progresses, there’s the potential that cannabis reforms will include those who’ve been left behind by the system. Many early pioneers for the cannabis industry risked their lives and freedom; only to watch others who walked in after the dust settled become successful. Although current entrepreneurs can’t be blamed for this fact, many unsung heroes are left without a piece of the marijuana market that they helped to build.
The Big Gamble
When early entrepreneurs ventured into the fray of the marijuana industry, they made a bet. They gambled that they were correct to bring forth the cannabis market, and anyone who was opposed to it was wrong. Although the law wasn’t on their side, they went forward anyway. Overall, early pioneers felt that it was better to fight for cannabis and ask for forgiveness later than seek permission for something that wouldn’t be given to them.
So what does the current success story tell us about the early cannabis pioneers? It shows us that they were determined to change the preconceived ideas that were held by the vast majority. It’s rare that counter ideas prevail, but the story of the cannabis industry shows us that this is precisely what happened.
For example, prior to the legalization of recreational cannabis in California, entrepreneurs were left with little recourse to run their businesses. Most were in the form of collectives (cooperatives) that were only allowed to sell marijuana to pre-approved medical patients. Although state law in California deemed this as legal, there were still a high number of raids by the federal Drug Enforcement Agency (DEA).
Pit between grey laws at the state level and outright prohibition by the federal level, cannabis entrepreneurs were facing an uphill battle. It took years for recognition to occur where marijuana entrepreneurs were no longer being harassed by federal agencies – approximately 12-years (1996-2018).
The story of California is only one out many. Determination to stand up for what’s right has led many other pro-cannabis entrepreneurs to push against laws currently in place. This is apparent when you realize that 11 states have already legalized marijuana, with many others waiting to fall like domino pieces.
One could call this belief a form of arrogance, but this bold attitude was essential when going up against something as powerful as cannabis prohibition. When you have a public opinion against you, you’re the epitome of the underdog. Cannabis entrepreneurs and marijuana reform were the dark horses in this race – and somehow came out on top.
The Torch of Entrepreneurship
Regardless of industry, entrepreneurs can learn a vast amount from studying the case of cannabis reform. Whether viewed from the inside or outside, it’s apparent that determined individuals over decades caused one of the largest shifts in politics, law, and consumerism.
It shows that no idea is too far-fetched. Early entrepreneurs were face to face with incarceration – or worse. The next generation of entrepreneurs carried the torch that was given to them and brought it as far as medicinal cannabis. It wasn’t until an amalgamation of circumstances and determination brought global barriers tumbling down, allowing a select amount of locations to allow legal marijuana.
The entrepreneurs that you see today have fought a long and hard battle. Although the war is over in various locations throughout the world, many individuals are still fighting for marijuana reform. Although it looks like global prohibition is in a precarious position, only time will tell how much longer we’ll have to wait until cannabis is a worldwide commodity, such as coffee.
Currently, a popular global topic is cannabis reform. The European Union, African nations, Australia, New Zealand, and Asia are all beginning to discuss marijuana. Countless entrepreneurs are setting themselves up for the next battle with the hopes of being the first in line for this lucrative market.
Already, Canadian cannabis companies such as Tilray and Canopy Growth are setting up facilities or buying out marijuana-related companies in Europe. One only needs to take a peek at what large marijuana corporations are doing to understand future trends. Millions of dollars are being invested in production facilities throughout Europe, marking the next lucrative point for entrepreneurs.
The cannabis industry can be summed up as a bold new market. Now that overwhelming acceptance has gripped the global population, cannabis products are poised to make an indelible mark. Ultimately, history will show the cannabis industry and its’ determined set of entrepreneurs as an educational showcase on how to change the world for generations to come.
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