legal marijuana industry
DESCRIPTION
This PowerPoint was prepared for a Management 402 class. The assignment was to take an infant industry and propose possible strategies for profit potential. So, this presentation explores the legal marijuana industry and the profit potential that is waiting to be gained.TRANSCRIPT
Legal Marijuana Industry
Patrice Boston, Eric Steinbrunner, Matthew McDaniel, Elizabeth Duffey
Marijuana Industry Timeline
1800s
1930
1937:
1996:
1998:
2010:
2012:
Marijuana herbal extract for pharmaceuticals
States begin to outlaw marijuana
Federal government outlaws completely
Proposition 215 passes in California (medical)
Alaska, Washington, and Oregon follow
Proposition 19 declined in California
Colorado and Washington
(Graph, 2012)
States with Legalized Marijuana
Recreational UseColorado
• Amendment Number 64
• Regulated the same way as alcohol
• Must be 21 up to consume
• Commercial cultivation, manufacture, and sale of marijuana
Washington• Initiative Number 502
• One ounce or less if over 21
• Board meeting on licensing arrangements
• December 2013
(Peterson, 2013)
Porter’s Five Forces
(Porter, 1979)
Our Proposed Strategy on Industry Structure
• Industry leaders and foundation
• The general population and advocacy groups involved
• Government regulation
• Suppliers/Consumers of recreational marijuana
• Potential earnings
Industry Leaders
Vincent Keber, CEO Dixie Elixirs & Edibles
Jason Levin, Founder UpToke
Steve DeAngelo, President at Arcview Investment Network
Advocacy• National Organization for the Reform of Marijuana
Laws (NORML)
• Marijuana Policy Projecto Strategic Plan
Opponents
http://www.rollingstone.com/politics/news/legalizations-biggest-enemies-20130117
Public-At-Large
http://www.brookings.edu/research/interactives/2013/politics-of-marijuana-legalization
Government Regulations
The Wall Street Journal, “The Pot Business Suffers Growing Pains” April 22, 2013
Company Regulations
PepsiCo.com Distributioncenterjobs.com
Phillipsmachines.com
Suppliers
www.wbcsd.org
www.theatlantic.com
https://www.marlboro.com/
Show Me the Money
http://www.weedist.com/2012/07/wasted-potential-infographic/
Recreational Marijuana Comparisons
Tobac
co
Alcoho
l
Rec
reat
iona
l Mar
ijuan
a0
10
20
30
40
50
60
70
State/Local Taxes
Series1
Tobacco/Alcohol based on 2011 RevenuesRecreational Marijuana based on Projected
Revenues
Mil
lion
s
43.8
130.6
60
Users in Millions
tobaccoalcoholmarijuana
43.8
130.6
25
Users in Millions
tobaccoalcoholmarijuana
• “It’s time for the government to transfer money from organized crime to the public purse.” Stephen Easton, Frazier Inst. (2009)
Sales Potential
10111213141516171819200
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
Projections/25,000,000 Consumers
1 gram2 grams3 grams4 grams5 grams
Selling Price/ $ Dollars
Revenue/ $ Dollars
10 12 14 16 18 200
1,000,000,000
2,000,000,000
3,000,000,000
4,000,000,000
5,000,000,000
6,000,000,000
7,000,000,000
Projections/60,000,000 Consumers
1 gram2 grams3 grams4 grams5 grams
Selling Price/ $ Dollars
Revenue/ $ Dollars
• 2011 US alcoholic drink industry revenue:163.5 billion
• 2012 US tobacco industry revenue:
35 billion
• Cost of production for one gram of marijuana: 10cents (same as one gram of tobacco)
• Experts believe selling price of the regulated marijuana industry will need to stay at or below street value to decrease alternative means of purchasing.
Five Year Development Plan
• Year 1: Federal De-Regulation. • Year 2: State policies start to form. Only
boutique marijuana will only be around.• Year 3: Commercial manufacturing will start to
take place. Revenues est. $100 million.• Year 4: Advertising and marketing will begin.
Revenues est. $1 Billion.• Year 5: Companies start to form strategic
alliances to maximize profits: Revenues est. $5-9 Billion.
Questions?
Additional SourcesNORML.org//whitehousedrugpolicy.gov//drugabuse.gov//fibi.gov//usdoj.gov//Budgetary Implications of Marijuana Prohibitionshttp://www.businessweek.com/debateroom/archives/2010/03/legalize_marijuana_for_tax_revenue.htmlhttp://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=399http://alcoholism.about.com/od/faq/f/How-Many-People-Drink-Alcohol-In-The-U-S.htmhttp://www.cancer.org/cancer/cancercauses/tobaccocancer/questionsaboutsmokingtobaccoandhealth/questions-about-smoking-tobacco-and-health-how-many-usehttp://seekingalpha.com/article/1259221-identifying-the-gem-of-the-tobacco-industryNORML.orgMPP.orgBrookings.Edu