Looking forward to another 10 years

Hopefully, the survivors of the past decade have learned from the green rush mentality that created early challenges

We spend a lot of time talking about the past in this issue. It’s entirely fitting as we look back on the first decade of legal, adult-use cannabis and all the milestones that entails, including the first recreational sales in Colorado, the first producer licenses in Washington, the first retail sales in Washington and, of course, the launch of Marijuana Venture.

It’s been fun going through all the stories we’ve written in 120 issues of the magazine, as well as the big stories we missed or ignored, such as the Diego Pellicer fiasco, which made us roll our eyes at the time, but now resembles a calculated fraud.

Nostalgia can be a powerful drug, and it’s hard not to feel sentimental about those early days of adult-use cannabis, when optimism ran like a wild stallion and growth felt limited only by useless rules and regulations. But those days are gone. And they aren’t coming back. It’s really important to recognize that.

Just like Tulip Mania, the California Gold Rush and the Dot-Com Boom, cannabis has busted more dreams than it minted millionaires. Those who have survived have done so because of their hard work, their determination, their good business practices and, yeah, quite a bit of luck — because sometimes even the hardest-working, most-determined people still fail.

Some of the most successful people in this business were millionaires to begin with. Some small percentage became millionaires because of this business. And far too many lost everything — they wagered their houses, their retirement savings, money invested from friends and family, only to see businesses fold.

While we look back at the past, I’d like to spend a few minutes looking at the future.

The future is still bright. I still believe this, but it’s definitely not the money-printing future many of us thought it would be. I know the survivors of the past decade already know this, but I hope the next generation of entrepreneurs comes in with eyes wide open about the challenges, the pitfalls and the sheer amount of competition they’ll face. When I look at markets like Oklahoma and New Mexico, it seems like a miracle anybody survives, considering how many licenses were granted. When I see that nearly 5,000 people applied for medical cannabis business licenses in Kentucky, with fewer than 100 to be granted, I can tell the green rush mentality is still alive and well.

Medical is dead. That’s not to say cannabis doesn’t have value as a medicinal supplement or a treatment for numerous ailments where pharmaceuticals often fail (or cost too much, or have too many detrimental side effects). But from a business perspective, medical marijuana is just a stepping stone to full legalization. Medical cannabis proponents and activists warned about this in California, Colorado, Oregon and Washington — and they were right. And patients certainly suffer the consequences. Don’t get me started on the sad state of American health care and how profits are constantly put ahead of patients.

Oversupply is not transient. I hate to sound bleak, but I think it’s important to be realistic. Wholesale prices are going to continue falling, even in new markets and relatively limited markets like Florida and Ohio. Technology is improving. Know-how is improving. Producers are taking advantage of economies of scale. These are all contributing to higher, more consistent yields and resulting in oversupplied markets across the country. You can’t fight the macroeconomic forces at play. You can only do what you can to prepare. The ongoing price wars are not Desert Storm; they’re the entire history of the Middle East conflict.

Legalization will happen. But it won’t happen fast and it probably won’t happen the way you want it to. Instead of being a boon for existing businesses, it will probably create chaos throughout the industry, with only a handful of the biggest players and the most successful regional brands benefiting.

Pesticides are a problem. And I don’t really see anybody out there who’s doing enough to minimize their use, to raise awareness, to improve the testing rules and regulations. There’s no doubt that more research needs to be done in this regard, but consumer safety needs to held not just as a priority for the cannabis industry, but as a non-negotiable. Improper pesticide use is doing harm to cannabis consumers across the country — and most of them probably don’t realize it, because legalization has been sold as “safer” than the untested, unregulated black market. This is an area where I see some operators using tactics reminiscent of Big Tobacco, lobbying to prevent warning labels or reduce the amount of information available to unwitting consumers. Maybe if there were more significant penalties for using dangerous chemicals or bypassing safety-focused regulations, it would staunch the massive oversupply issues that are burdening growers. I suspect the problem is the same in medical markets as it is in adult-use markets, which is particularly concerning, as immunocompromised people are going to be much more likely to have an adverse reaction to residual chemicals than the average consumer.

All warts aside, I still love working in cannabis, but if you don’t get some weird thrill from unpredictability, from endless problem solving and from wearing multiple hats, there are better industries to work in. If you want stable and stolid, buy a dry cleaner or a laundromat. If you want sexy and challenging, with tons of upside but a high likelihood of failure, start a cannabis company, a restaurant or a nightclub.

Garrett Rudolph

Editor