While it appears likely that Californians will vote to legalize Marijuana for recreational use, the federal status will remain problematic. However, it sounds like the Feds are going to allow some commercial grows, at least for research purposes for now.
Recently the Drug Enforcement Agency was petitioned to reschedule Marijuana to allow medical use. This could have been a big step in federal recognition that prohibition has not stopped the nation’s biggest cash crop. But the Agency voted to not change the drug’s standing. It did, however, open the door for increased research. The Agency indicated it would expand the number of registered manufacturers that supply marijuana for research purposes.
For many years, since the 1930’s, the federal government has labeled cannabis as a schedule 1 substance, meaning that it carries a high potential for abuse and has no medical value whatsoever. The feds have long ignored evidence to the contrary, even with the growing acceptance of medical benefits.
So what does this mean for Agriculture? Well, Marijuana is a highly profitable crop, whether for medical or recreational use, and this action opens the door for legal farming – not only legal in the eyes of the state, but the eyes of the federal government.
AgFunder.com says there is a large cannabis-focused investment community with a lot of money to sink into medical marijuana, and those groups see this as a very positive step. But of course they have their eyes on the big prize and, according to AgFunder.com, have hopes of tapping the huge recreational marijuana market, which they say is worth $40 billion dollars annually.
Alex Thiersch, the managing partner at cannabis investment fund Salveo Capital, told agfunder.com “The fact that the DEA has opened additional avenues of research is a very positive development.
Scott Greiper, founding member at cannabis-focused investment bank Viridian Capital Advisors, agreed, and told Agfunder that “Over time, there will be studies that prove its efficacy and which will give the DEA the comfort, empirical data, and other bases it needs to reschedule and at some point de-schedule cannabis.”
California is expected to collect more than $1 Billion in new taxes within a few years of legalization. That kind of money is hard to ignore. Legalization in California would be big business, and is projected to dwarf revenues from states that already have legalized markets.
I’m Len Wilcox and that’s the Western View from AgNet West.