WASHINGTON: When Barack Obama said it was time for Americans to have a national “conversation” on marijuana laws – he was careful to say he did not support legalization – back in December, the President, who smoked pot with the “Choom Gang”, high school stoners, was trying to catch up with the nation’s rapidly shifting mood.
By April this year, the Pew Research Center said that, for the first time, a majority of Americans, 52 per cent, supported legalization, an 11-point rise since 2010. Forty-five per cent were opposed.
This sea change is echoed by support for “medical marijuana” in 18 states and Washington DC as public attitudes towards the banned Schedule 1 drug thaw, drawing support across the political spectrum.
When citizen-driven referendums legalized recreational marijuana use in Colorado and Washington in November – opening up the prospect of a legal marijuana industry and huge profits – the Obama Administration was left struggling to respond.
“This is a tough problem, because Congress has not yet changed the law,” Obama said in December. “I head up the executive branch; we’re supposed to be carrying out laws.”
Nine former Drug Enforcement Agency chiefs, in a letter to Attorney General Eric Holder, also predict looming reefer madness.
“When marijuana will be fully legal to buy, diversion of the drug will explode,” they forecast.
Which spells money. ArcView, which links angel investors with marijuana product companies, anticipates the “greatest business opportunity since the falling of the Berlin Wall and the opening up of the free market in Europe”.
So what’s the bottom line? A 2006 report by the Coalition for Rescheduling Cannabis, a pro-legislation lobby, identified marijuana as America’s biggest cash crop, worth about US$35.8 billion ($43 billion). This was debunked in a 2012 study by UCLA, the Rand Corporation and others as “larger than the best estimates of the retail sales value of all marijuana consumed in the US”, including imports.
Still, even allowing for hyperbole, there is a sense of a pending “green rush” bonanza. Quoting a financial analysis firm that said medical marijuana made US$1.7 billion in 2011, the Wall Street Journal pointed investors at ancillary industries, such as insurers, lawyers, online sellers and farm equipment firms.
“More and more people see the inevitability,” Brendan Kennedy, head of Privateer Holdings, a private equity firm that has earmarked US$7 million for the burgeoning industry, told the Los Angeles Times.
The big boom could come if, and when, industrial-scale marijuana cultivation creates a national industry, like tobacco, with attendant jobs and cash flow. “I believe we are on the brink of a huge opportunity,” says ArcView head Troy Dayton. He thinks a “responsible” marijuana industry can avoid the mistakes – such as targeting children – made by the alcohol and tobacco industries.
“The hippies are right. They were right about personal computing. They were right about organic food. They were right about renewable energy. And they’re right again about cannabis.” ArcView also offers insurance to the industry, along with market research and analysis.
“It won’t be long before entire floors of Wall St will be dealing with this industry,” says Dayton.
The last time advocates hoped for a breakthrough, in the 1970s, stoners speculated Big Tobacco had secret plans to exploit the market. A Brown and Williamson memo, posted by SAM, noted: “We have the land to grow it [marijuana], the machines to roll it and package it, the distribution to market it.”