Medical Marijuana Business Attracts Hedge Funds, Venture Capitalists

Marijuana has been a cash crop for many years in this country. The only problem is that most of that crop had been grown illegally. Now, that medical marijuana is legal in 15 states and the District of Columbia, legalized marijuana has quickly become so popular it is attracting attention from hedge fund managers and venture capitalists, not to mention a whole new batch of entrepreneurs.

Doctors still can’t prescribe marijuana because it is categorized as a schedule one drug like LSD. But they can recommend it and that’s all anyone needs to get a medical marijuana license that allows them to buy marijuana legally in those 15 states, with three more states about join them.

Each license sells for around $130 and some clinics selling the licenses have brought in more than a million dollars in just their first year. The once illegal joint is selling like hot cakes throughout middle America to consumers who no longer have to worry about getting arrested for possession, at least by local or state authorities.

The federal government still outlaws marijuana possession but it’s unlikely someone with a medical marijuana license will be busted by an FBI or DEA agent if caught smoking in his or her own home. In fact, just last year U.S. enforcers promised to leave medical marijuana operations alone if they complied with state law.

That prompted a significant increase in interest among entrepreneurs. Today, there are an estimated 2,400 medical marijuana dispensaries from California to Maine. In Colorado, they outnumber Starbucks two to one.

 

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Move over, Big Pharma and Big Oil, Big Marijuana is here

Legalization ‘looking inevitable,’ spokesman says

If there’s one group of people who get their way in Washington, it’s lobbyists.

Now, advocates of marijuana legalization may have a reason to cheer that political reality: They’re getting their own marijuana lobby group.

And just Big Pharma and Big Oil lobby for greater leeway for their businesses, so too will Big Marijuana push for their industry to be given the freedom to succeed.

Aaron Smith, executive director of the newly formed National Cannabis Industry Association, says that marijuana legalization is “looking inevitable.”

Smith told McClatchy news service: “It’s pretty clear that the medical marijuana industry is becoming recognized more and more by the mainstream as a fully legitimate part of the economy.”

Legalization “didn’t happen in 2010, but it’s likely to happen in 2012,” he added. “It’s going to be relatively soon we’re going to see states move from medical marijuana into broader legal markets. And the federal government needs to catch up. Frequently the American people are ahead of the Congress.”

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Banned marijuana dispensary reopens in Wildomar

A medical marijuana collective engaged in a legal battle against Wildomar re-opened its storefront location Monday in defiance of a citywide ban on dispensaries.

The move by the Wildomar Patients Compassionate Group comes a week after the collective filed a legal petition seeking to block the city from enforcing its ban.

General Manager William Sump said the group believes Wildomar’s ban violates state law, which allows medical marijuana patients access to medication.

“I will only operate until a judge tells us not to,” Sump said.

Wildomar City Manager Frank Oviedo said the city would likely seek a court order forcing the dispensary to shut down.

“We’re going to enforce the city’s ordinance,” Oviedo said. “There is no other option. We can’t ignore our own laws.”

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San Jose union begins organizing pot workers

A major California labor union is organizing medical cannabis workers in Oakland, a move that analysts say will help efforts to legalize marijuana and open the door for the union to organize thousands more workers if state voters pass a measure in November to allow recreational marijuana use by adults.

The 26,000-member United Food and Commercial Workers Local 5 in San Jose is believed to be the first union in the country to organize workers in a marijuana-related business. It is considering new job classifications including “bud tender” – a sommelier of sorts who helps medical marijuana users choose the right strain for their ailment.

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Oakland Lab Creates ‘Low Anxiety’ Pot

One of the nation’s most sophisticated cannabis testing labs has yielded powerful results this spring, isolating a “low-anxiety” strain of the plant by closely tracking the potency of local crops. The strain of medical marijuana from Oakland’s Harborside Health Center is based on findings from the dispensary’s new Steep Hill laboratory. The strain is a custom-bred True Blueberry crossed with OG Kush, said Harborside Health Center Director Stephen DeAngelo.

Patients report getting pain relief without getting too stoned. “They’re not saying that it’s no buzz at all; what they’re saying is that it’s diminished,” DeAngelo explained. “They describe it as being mellow, even, steady, not overwhelming, not producing anxiety.”

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Medical marijuana stores firebombed in Montana

The Billings, Montana, City Council will take up the issue of regulating medical marijuana on Monday night in a meeting expected to be intense in the wake of the firebombings of two of the city’s medical marijuana storefronts in the last two days.

The southern Montana city’s dispensaries legally provide marijuana to medical patients who use it for maladies from glaucoma to nausea to lack of appetite. In the latest incidents, the phrase “Not in our town” was spray-painted on the businesses, police say.

Billings Police Department Sgt. Kevin Iffland said Big Sky Patient Care was hit early Sunday morning and Montana Therapeutics was the target early Monday. Both had a rock thrown through the front door, followed by a Molotov cocktail. In both cases, Iffland said, the fire was put out swiftly and damage was not extensive.

Iffland said Billings police are working with the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives and that the two firebombs are being handled as felony arsons carrying sentences of up to 20 years in prison and a $50,000 fine.

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California To Collect $100 million in Cannabis Taxes This Year

While the State of California begins to debate the consequences of taxing and regulating cannabis for personal use, it’s important to note the state is already taxing and regulating the agricultural product used by 2.9 million Californians monthly. California Board of Equalization official Anita Gore told the Express this week that the board estimates it collects anywhere from $50 million to more than $100 million in sales taxes per year from medical cannabis dispensaries.

That’s on top of the millions of dollars municipalities like Oakland have begun collecting in local sales taxes and fees. Gore said the board doesn’t have more precise figures because dispensaries are not required to report the exact business they are in. Their taxes come in under several categories of business like “retail” and “pharmacy,” Gore said.

The board estimates the state can make $1.4 billion annually from fully integrating the vibrant cannabis market into the economy.

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