Cannabis victorious: What do the wins for marijuana legalization mean for business?

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Is Big Weed on the way? Now that California, Nevada, and Massachusetts have legalized recreational marijuana, investors should expect the explosion of a major new industry which could have a major economic impact on America.

One main reason why the potential in recreational marijuana is so great is that, until Colorado and Washington legalized cannabis in 2012 (Oregon and Alaska legalized it later), there was no legitimate industry in the country to speak of. By virtue of being legalized — and in particularly in a state as large, and with as vibrant an agricultural sector, as California — the recreational marijuana industry has now created a solid foundation for itself and its own ground floor.

The success of California’s initiative, Proposition 64, will allow adults to grow up to six plants for personal use. It will also permit marijuana to be sold in retail shops with a 15 percent excise tax. That said, it will take awhile for adults to be legally purchase it in the state, since the state has until January 1, 2018 to start issuing sales licenses to retailers.

“We’re in a period of massive transformation in cannabis policy,” said Assemblyman Rob Bonta (D-Oakland), a California lawmaker who specializes in marijuana policy, in an interview with the Los Angeles Times. “We have to consider honoring the spirit of the law and making it work. If it’s legal to use but there is nowhere to buy, then I think we could consider a special, conditional, time-restrained license that could be operative for a short period of time while we bridge into the new regime that Proposition 64 envisions. That is definitely possible.”

As similar problems have been seen in the marijuana industry with other states that have transitioned from prohibition to legalization, one should not expect this groundswell to erupt immediately. Nevertheless, savvy investors should pay attention to the opportunities lawmakers in the states where it can be used recreationally, and particularly in California, are making available to them.