the legalization of marijuana final (1)
TRANSCRIPT
The Legalization of Marijuana
Justin and Will
Industry Overview Legal Cannabis is one of the fastest growing industries in the United States at a compounded annual rate of 30%. This industry comes with incredible opportunities, and significant
risks.
Overview of Legalization Models
Effective Medical
Treatments
UGA study estimated the Medicare program would have saved $468 million on prescription medications if all states had medical marijuana
Creates new demand from the medical community
Improves overall quality of life for suffering patients
HIV/Aids Insomnia Glaucoma
Inflammation Arthritis Epilepsy
PTSD
Political Views and Age Gap Presidential Election
will have an impact Clinton supports medical
legalization and more research Reclassification from schedule
I to II Trump supports medical
legalization with state by state decisions
Against adult legalization and regulation
Global Perspective The global tide around legal marijuana is slowly turning
Canada -100%
Jamaica -100%
Australia- Medical only
Top Trends To Watch
High Growth Potential Only 4 States allow for Adult use of Marijuana recreationally Key revenue-generating states like California are now voting on full
legalization Adult use only accounted for 8% of the $4.6B in sales made in
2014 but is predicted to account for 53% of the $22B predicted in 2020
Impact on Government Expenditures Legalization effect on
prison spending is a misconception
Harvard Economist Jeffrey Miron estimates $7.7B saved
Could save Justice Dept. $3.2B on minor prosecutions
Issues with detection and driving
Tax Benefits Major argument behind legalizing Marijuana $13.2 Million in Colorado state taxes collected in Aug. and Dec.
2015 setting record revenue highs and continuing growth.
Investment Flow & Performance
Investment into cannabis companies continued to gain ground in 2015 on the private side despite major losses in public sector
Private Investment Fundraising Hit New Heights Peter Thiels Founder’s Fund Snoop Dogg Sean Parker The ArcView Group
Opportunity for Large Corporate Involvement
Looking at the long term future, approval by the federal government will open doors for large corporations
Agriculture, Tobacco, Pharma, and Alcohol companies are expected to be in the mix
Well entrenched, experienced Marijuana companies will be ideal acquisition targets
The complex nature of the market makes acquisitions the best business path for large corps
Microsoft’s Unprecedented Big Move
Offering “seed to sale” tracking software Expanding cloud business Partnering with Kind, a kiosk and
software co. Microsoft is partnering only with the
“government solutions” department of Kind
Compliance play aimed to help keep tabs on sales and commerce
Major Risks and Problems A growing divide between Federal and
State legislation
Incredibly limited access to financial services and banking are hurting industry growth
Banks and large corporations are incredibly wary of coming under federal scrutiny/ prosecution
Social impact and fallout
The tax policy on marijuana is impeding business growth without COGS deducted
Most businesses pay 35% on their profits but with Marijuana tax can be up to 82% of profits
Personal Outlook & Conclusion
Growing enthusiasm has begun a national policy shift Drug reclassification and Gov. research will be largest driver
in market Federal legislation reform is essential Substitution effect and cheaper prices Too immature to be true commodity market Specialized private equity groups and funds are the best
entry point currently
Sources The ArcView Group Marijuana Business Daily New Frontier Research Colorado Marijuana Enforcement Division The Washington Post The Tax Foundation WebMD Business Insider Leafly.com The Gale Group