The Money in Legal Marijuana

Following Washington’s and Colorado’s passing of recreational marijuana legislation, the country is loosening up a bit in marijuana talk. If the topic was taboo among some prior to the law changes, it’s negative connotations are falling by the wayside, particularly as the potential for serious money making is realized. What would once get you locked away for decades could soon set you up for a well-funded lifetime.

In a report from the Los Angeles Times, we see just how many people, companies, and firms could stand to strike it rich as legalization and medical marijuana statutes continue to pop up across the country.

From greenhouse equipment suppliers to vegetable growers looking to get in on the action, the potential to make money can be found in places where you are dealing with legal marijuana and it’s products firsthand or where you are simply supplying the industry with the necessary tools to function. Regardless, there is much money to be made.

dollar sign“More and more people see the inevitability,” said Brendan Kennedy of a private equity firm targeting cannabis start-ups. “They see that the Berlin Wall of cannabis prohibition is going to come down.”

There are growers who supply New York restaurants with herbs and vegetables who want a piece of the cannabis growing action should legalization come to their state. There is another company looking to make vending machines for pot. One company, Lazarus Investment Partners, holds 15% of the shares of AeroGrow, a company that makes hydroponic kitchen appliances for growing small vegetables. The investment firm has suggested AeroGrow begin making their appliances taller to account for the inevitable kitchen-marijuana-growing that is bound to happen.

“We don’t want to take a bet on which state is going to get legalized and which dispensary is going to succeed, or [which] cannabis growers are going to be successful. We want to just make a bet on overall legalization,” said Justin Borus, the managing partner at Lazarus Investment Partners.

These small companies and their investments are not without risks. Obviously marijuana and all of its related business ventures are considered illegal at the federal level. Banks have faced criticism from the feds should they finance or hold money for these businesses, even accused of money laundering for drug lords. While the future looks bright, it’s not without potential obstacles.

Business investors know about risks. They analyze the possibility of making or losing money at every juncture. More and more of these investors are seeing the legal marijuana industry as positive investments, low on risks. This should tell us something, and should serve as a warning and a wakeup call to the federal government and state-level lawmakers hell-bent on maintaining prohibition: the people of the United States should be free to choose their marijuana use and the momentum is such that it will be difficult to stop legalization efforts in the very near future.

 

About Elizabeth

Elizabeth Renter is a freelance writer and editor who writes about criminal justice issues.

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