From black market to budding industry: The legalization of cannabis spells economic opportunity

Innovative businesses, technologies, and jobs are only part of how the legalization of cannabis has affected the economy.

2012 was a big year in America politics. Obama was reelected for his second term and while that’s an important milestone in the history of America, during those same US elections, Colorado and Washington State also became the first jurisdictions to legalize their recreational cannabis industries—lighting the spark for what has become a massive industry. 

In the last seven years, we have seen two nations, 11 U.S. states, and Washington D.C. embrace legal adult-use cannabis—as well as various countries opening the door to the medicinal sector, like Colombia and Germany. A space that was once exclusively the domain of the black market has graduated into what is expected to be worth US$66.3 billion by 2025.   

It’s easy to forget just how different the cannabis landscape looked less than a decade ago. The emergence of cannabis as a legal industry has allowed it to develop and innovate like any other growing sector. In just a few short years, cannabis companies have sprung up to become industry giants. Innovative companies have developed whole new cannabis product categories and reinvented how we grow and sell cannabis. To truly appreciate the development that is underway, it helps to look back at how things have changed under legal cannabis regulation.

Refining the buying experience

The cannabis buying experience has changed significantly under a legal system. Previously, buying cannabis in a grey or black market was completely illegal and would put both the buyer and the seller at risk from federal punishment. Fast forward to today and adults are now free to walk into a retail cannabis store and pick up a few grams of bud without any issues or legal issues.

Within the legal system, retailers have the opportunity to better establish their brands, making tangible relationships with their local communities and a broader base of consumers. Ultimately, this spells potential for growth for the businesses and other economic opportunities in the form of new jobs, local investments, and strategic B2B partnerships. Added to that, the retail stores of today have the opportunity to invest in their design and overall customer experience, making them just as appealing as any other high-end store.

A regulated industry

The main feature that separates the legal cannabis industry from the black market is the regulatory standard to which cannabis companies are held. Before legalization, it was difficult to know exactly what you were consuming due to an omittance of lab tested results. Nowadays, legal cannabis producers and manufacturers are now strictly required to test for moulds, insects, and other contaminants in a laboratory setting. The use of unsafe pesticides is also heavily restricted. The end result is a product that the consumer knows is clean and safe—and more consumer trust means more business. 

These new cannabis industry standards have also opened the door to businesses that are exclusively focused on testing cannabis products or on designing technology that can be used on-site by producers. This new testing sector also spells potential investment opportunities for investors that that may be curious about the market, but aren’t yet familiar enough to align themselves with overtly cannabis branding.

Spurring greater innovation

Legalization has created a wave of modernization in the cannabis industry. Companies can now look to highly skilled product developers and engineers to create cannabis products and processes that give them an edge over the competition. These concepts have included advanced LED grow lights and hydroponic systems that are less resource intensive and result in a lower cost final product. Legal market extractors have developed new solventless extraction methods that create purer concentrates without lingering chemicals that affect the taste and quality.

And still we’re nowhere near done. New and refined products, tools, and methods will be key to defining the cannabis landscape of the future—as well as its potential revenue streams.

Opening new economic opportunities

Under the black market, it was only a select few that reaped the proceeds from cannabis sales. Now, the cannabis industry is going into local economies and providing employment to thousands of workers. The state of Colorado alone has brought in more than US$1 billion in cannabis tax revenue to date—and that’s funding that’ll go right back into the state. New cannabis businesses are still emerging, and that means that there are plenty of opportunities for investors to benefit from the industry’s development. 

The cannabis industry still has a lot of growing left to do. 2020 is set to see more jurisdictions legalize use of the plant. As they do, there will be opportunities for more growth, global partnerships, and more revenue for all involved. The cannabis industry is rapidly evolving and it’s going to be an exciting ride discovering what it will look like in the years to come.  

Looking to be part of the cannabis industry’s development? Eden Empire is an emerging player in Vancouver’s cannabis retail landscape. 

Photos: HQuality / Shutterstock, Margo Amala / Unsplash