420GIVES Cannabis Industry Report card TM
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Cannabis Revenues "You won't find another industry growing at that kind of clip": ArcView Group CEO, Troy Dayton. The marijuana industry is booming, and it doesn’t show any signs of slowing down in the near future. “In the last year, the rise of the cannabis industry went from an interesting cocktail conversation to being taken seriously as the fastest growing industry in America,” Troy Dayton, CEO of The ArcView Group and publisher of the third edition of the State of Legal Marijuana Markets, said in the executive summary of the report. “At this point, it’s hard to imagine that any serious businessperson who is paying attention hasn’t spent some time thinking about the possibilities in this market.” The huge growth potential of the industry appears to be limited only by the possibility of states rejecting the loosening of their drug laws. The report projects a marijuana industry that could be more valuable than the entire organic food industry — that is, if the legalization trend continues to the point that all 50 states legalize recreational marijuana. The total market value of all states legalizing marijuana would top $36.8 billion — more than $3 billion larger than the organic food industry. “These are exciting times, and new millionaires and possibly billionaires are about to be made, while simultaneously society will become safer and freer,” Troy Dayton, also said in the executive summary of the report. “We believe that the development of a responsible, politically engaged, and profitable, legal cannabis industry will hasten the day when not a single adult in the world is punished for this plant.”
ArcView surveyed hundreds of medical and recreational marijuana retailers in states where sales are legal, as well as ancillary business operators and independent cultivators of the plant, over the course of seven months during 2013 and 2014. They also compiled data from state agencies, nonprofit organizations and private companies in the marijuana industry for a more complete look at the marketplace. Researchers from The ArcView Group, a cannabis industry investment and research firm based in Oakland, California, in their third edition of the State of Legal Marijuana Markets found that the U.S. market for legal cannabis grew 74 percent in 2014 to $2.7 billion, up from $1.5 billion in 2013.
Realizing the significant role of this industry ArcView Group put a more thorough research and is going to launch its fourth edition of the State of Legal Marijuana Markets, in which it come up with increased sum ups and explains that 2015 was another watershed year for the legal cannabis market. National legal sales grew to $5.4 billion up from $4.6 billion in 2014, fueled by explosive growth in adult use market sales, which grew from $351 million in 2014 to $998 million, an increase of 184%.
Demand is expected to remain strong in 2016 with legal markets projected to grow to $6.7 billion, a 24% increase over 2015. By 2020, legal market sales will grow to $21.8 billion, with adult use sales comprising nearly twothirds of the total market.
The report also projects a strong year for legal marijuana in 2015 and projects 32 percent growth in the market. Dayton said that places “cannabis in the top spot” when compared with other fastgrowing industries.
To date, four states — Colorado, Washington, Alaska and Oregon — have legalized retail marijuana. Washington, D.C., voters also legalized recreational marijuana use, but sales currently remain banned. Twentythree states have legalized medical cannabis. Still, marijuana remains illegal at the federal level.
Over the next five years, the marijuana industry is expected to continue to grow, with ArcView predicting that 14 more states will legalize recreational marijuana and two more states will legalize medical marijuana. At least 10 states are already considering legalizing recreational marijuana in just the next two years through ballot measures or state legislatures. The report also breaks out some interesting marijuana trends from around the nation. California still has the largest legal cannabis market in the U.S., at $1.3 billion. Arizona was found to have the fastestgrowing major marijuana market in 2014, expanding to $155 million, up more than $120 million from the previous year. Medical marijuana is already legal in Arizona and California and recreational legalization measures are likely to appear on the 2016 ballots in both states.
More than 1.5 million shoppers purchased legal marijuana from a dispensary, either medical or recreational, in 2014. Five states now boast marijuana markets that are larger than $100 million, and in Colorado and Washington — the first states to open retail marijuana shops in the U.S. — consumers bought $370 million in marijuana products last year.
“These are exciting times,” Dayton said in the executive summary, “and new millionaires and possibly billionaires are about to be made, while simultaneously society will become safer and freer.” Among the states where adult use is currently legal, Washington is projected to be the largest market by 2020 at $2.3 billion followed by Colorado at $2 billion. Collectively, the top 5 states will generate $5.5 billion in sales by 2020 and will account for 47% of the total adult use market. The medical market in California will continue to be the largest market in the U.S. through 2020, although the combination of strict new medical regulations passed in 2015 and the legalization of adult use in 2016 is expected to reduce the levels of patient participation in the market in the coming years. Consequently, California’s medical market is projected to shrink slightly from $2.7 billion in 2015 to $2.6 billion by 2020. The five largest medical marijuana markets will generate $5.5 billion in sales in 2020 and will account for 24% of the total national medical market. Colorado is one of four U.S. states with legalized recreational marijuana (along with Washington, D.C.), with Washington state also establishing its own legal market for recreational sales in 2014 while Oregon’s pot dispensaries opened for business last year. Lawmakers in the fourth state, Alaska, are still formalizing the regulations for that state’s market. Licensed and regulated marijuana stores in Colorado sold $996,184,788 worth of recreational and medical cannabis in 2015, according to new data from the state Department of Revenue. “I think it’s ethical to round that up to a billion,” cannabis industry attorney Christian Sederberg said Tuesday upon first hearing the 2015 totals.
Colorado recreational marijuana sales first started on Jan. 1, 2014. Oregon and Alaska are expected to add a combined $275 million in retail marijuana sales in their first year of operation, the report projects. And while D.C. has also legalized recreational marijuana use, ArcView couldn’t project a market size in the District because of an ongoing attempt by congressional Republicans to block the new law.
TAX REVENUES
Two thirds voted in favor of Proposition BB, which allowed the state to hold accountability over all the money raised through marijuana taxes, right after Colorado became the first in the nation to legalize and tax recreational use in 2012. State law had an option for the voterapproved taxes, like the one on marijuana, be returned to citizens if revenue is higher than predicted in the first year. This year, the overflow would have given each Coloradan roughly $8. Instead, they voted to let the state hold on to its $66 million, of which $40 million will go to school construction, $2.5 million to drug education, and another $2 million to other youth programs. Colorado’s 2015 marijuana tax and sales totals tell a story of implementation and growth. While the state’s pot shops sold more than $699 million of cannabis in 2014, they moved more than $996 million in 2015 — a year when more pot shops opened, more municipalities started allowing these businesses and more customers found their way into the regulated market.
Yearoveryear totals for taxes and license fees grew too, from $76 million in 2014 to $135 million in 2015.
Add a little bit of The schoolfunding 15 percent excise tax on wholesale marijuana transfers jumped from $13.3 million in 2014 to more than $35 million in 2015, according to the state. body text In Colorado, Scott Newell’s office, director of the office of capital construction for the Colorado Department of Education, oversees the marijuana money being dedicated toward school construction. He said he expects to have about $17 million to hand out in this first round, with the $40 million annual allotment available in a few years. In Colorado, a small rural, public charter school could be built for $10 million, he said, while an urban high school could cost $100 million or more. Meanwhile, Pueblo County, home to the world's largest outdoor marijuana farm, voted to increase growers' taxes to help fund college scholarships, expected to raise $3.5 million. The money not used by the college scholarship program will be dedicated to a long list of community projects that includes enhancing a playground at an elementary school, funding a study about extending an Amtrak route to the county and replacing golf carts at a local golf course. After two votes this week, the state is set to start investing extra marijuana tax money in social goods like schools, scholarships, and drug abuse prevention, trying to make good on its promise that legalizing cannabis would benefit all Coloradans.
The county is expected to raise $3.5 million with this tax increase, and at least half the revenue will go toward funding scholarships for high school graduates in Pueblo to attend local colleges. Depending on revenue, the program might be expanded in future years.
"The whole point of the scholarship program was to make higher education a reality for families who can't afford to send their kids to school because of debt," said Paris Carmichael, a spokesperson for Pueblo County. According to Carmichael, this type of scholarship, funded by a marijuana tax, appears to be the first of its kind. Driving the Vermont delegation's visit is an independent report suggesting Vermont could see new taxes revenues worth $20 million to $75 million annually, in part paid by pot tourists from Massachusetts, New York and New Hampshire. The constitutional amendment promised that $40 million dollars a year would go toward school construction across the state. In the first full year of sales, however, the state expects to collect only about $17 million in special school taxes levied on the marijuana industry. Still, it's better than what the state collected the year before: nothing.
DONATIONS “It’s not all about making money and about profiting,” ...said Ean Seeb, coowner of Denver Relief, a dispensary whose monetary and volunteering donations include Ekar Farm and Garden, which grows vegetables for food banks. Kayvan Khalatbari, Founding partner of the Denver Relief’s Green Team Volunteer group as well as Denver dispensary chain, The Clinic, which holds an annual golf tournament sponsored by cannabisrelated businesses that gathers money for multiple sclerosis research. He pointed out that the Clinic has raised $50,000 for the cause since 2009 and hopes to raise another $25,000 in 2016 alone. The Clinic’s general manager, Ryan Cook, said employees also participate in an annual MS walk to raise money and have contributed nearly $291,000 since 2009 from that event and the golf tournament. Fort Collins medicinal and recreational marijuana shop, this year, the organization will accept at least $1,400 in membership dues from marijuana retailers enrolled in Team Fort Collins' Responsible Association of Retailers. The program uses secret shoppers to hold tobacco, marijuana and alcohol retailers accountable for checking identification to keep drugs and alcohol out of the hands of youth. That's nearly $9,000 in donations that Coombes and his team will handle. It will keep marijuanarelated donations separate from all other Team Fort Collins revenue in its bank account.
"There's at least 10 (Colorado dispensaries) I can think of that gave at least $10,000 or $20,000 to charity in 2012," said Betty Aldworth, deputy director of the National Cannabis Industry Association. The board of Community Shares of Colorado, which has collected more than $22 million for Colorado nonprofits through workplace giving programs, has begun discussing opening its services to medical marijuana businesses. It is not that easy to tell the exact amounts taken out of the revenues generated through the Cannabis industry that it has donated to local charity organizations, nonprofits or to any national cause – considering only the states that have legalized Marijuana. Owner of a fundraiser campaign through Marijuana revenues, Cristine Romarine donates the funds at the end of the month to a local charity. She wishes she could publicly say which one, but many nonprofits aren't willing to go public with her philanthropic contributions just yet and she doesn't want to hurt causes she cares about. There are not many details or records present to display under the “Donations” chapter of this industry. The records located do however conclude firstly, people are not that willing to accept any donations from an industry that is not legal though it is being legalized throughout the States and secondly, the ones who have accepted donations do not want their names to be attached with such revenues. It is quite clear now that most of the states are going through the process of legalizing at least medical Marijuana but also taking the recreational use under consideration. With such implementations under consideration there must be forward thinking to start raising as much funds as such a massively growing industry can raise, just to donate to charities and nonprofit organizations to massively benefit the community beyond the herb.
WHAT IF? What if the cannabis industry were to set a standard of contributing beyond tax revenues... What if the cannabis industry set a standard of just 4.2 percent of profits... What if contributions from the cannabis industry supported the community outside of itself... What if the cannabis industry established selfregulation in the area of corporate social responsibility... What if an organization existed whose primary area of interests was not in the cannabis industry at all, but was embedded in the community and was willing, capable and able to become a liaison between the industry and the community, providing a place for the industry to contribute without stigma or judgement and those funds were put to the benefit of the community not withholding recognition from the industry but with open dialogue embrace the funds and prove once and for all, many old prejudices are outdated and irrelevant.
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