California is at the forefront of the US medical marijuana industry, and weed’s positive impact on the state’s economy has been huge, generating $2.8 billion in 2015, with $6.5 billion annually expected by 2020.
The state’s largest grow facility was announced in June 2016 by GFarms, and is slated to be built in the town of Desert Hot Springs, which declared itself insolvent in 2014 and is now experiencing a real estate boom thanks to the marijuana industry. The GFarms facility will be 100,000 square feet and consist of three greenhouses on seven acres.
But it’s going to be eclipsed in size before long.
AmeriCann, a Colorado company, has announced much bigger plans to build the nation’s largest marijuana grow facility—in Massachusetts—in 2017.
Obviously, the prospects of enjoying an influx of cannabis cash similar to California’s is appealing to other states and legalization proved popular in the November elections. The national marijuana market is projected to generate $50 billion a year by 2026. But the transition from underground illegal drug trade to legitimate business isn’t fast or easy.
Large-scale projects are few and far between. It’s difficult to get financing to go into a business that is still illegal federally, so big marijuana projects—while potentially profitable—are shirked by the corporations most likely to be interested in this new industry; Big Tobacco and Big Pharma aren’t transforming into Big Pot yet.
“There isn’t some megalithic industry that exists today. There’s no Philip Morris, no Anheuser-Busch, no cannabis division at Bank of America. Even the most successful company is still barely in the growth stage,” Kris Krane, president of Massachusetts marijuana investment and consulting firm 4Front Ventures, told The Boston Globe (paywall).
The weed business is still very iffy—apart from financing problems, you can’t transport cannabis across states because of its status as a Schedule 1 drug, and there are numerous obstacles to entry, such as obtaining one of the limited number of licenses available in any given state. “It’s not for the faint of heart,” says Tim Keogh, president and CEO of AmeriCann.
Keogh became interested in cannabis in 2010 when a friend dying of stomach cancer in Florida, where medical marijuana was unavailable, mentioned its therapeutic effects. They joked about Keogh going out on the street to buy some but, in all seriousness, he was concerned about molds, potency, and other potential dangers associated with illegal drugs (like arrest, presumably). After his friend passed away, Keogh moved to Rhode Island, where medical marijuana was (and still is) legal, and started volunteering at another friend’s dispensary.