A different kind of green
Savvy investors (like the two Yale MBAs profiled in this Seattle Times article) are getting ready to jump on the marijuana bandwagon in Washington state. If anything is going to convince the rest of the country to legalize marijuana, I suspect it is going to be the huge amounts of money to be made - both private and public - by its legalization.
Privateer Holdings is a Seattle-based private equity firm which is one of the first businesses ready to leap into the fray. Its owners, Brendan Kennedy and Michael Blue, believe that I-502 represents "the biggest opportunity I'm ever going to see in my lifetime." By the sounds of it, this could be bigger than the Yukon Gold Rush and the Dot Com boom put together.
Privateer Holdings is the first private equity firm to focus specifically on marijuana. The company is presumably planning to invest in grow operations, since sales of marijuana will evidently only take place through storefronts that are owned and controlled by the state.
However, the grow side of the equation is big business in and of itself. Aside from the basic equipment (hydroponics, lights, etc) there is a whole segment of ancillary products, from insurance to software. Kennedy compares it to the collection of sub-industries that have grown up around the corn industry. There are entire market niches filled by businesses that just support the corn growing industry, and the same could easily become true of the marijuana industry in Washington.
Analysts are forecasting that marijuana sales could become a billion-dollar industry once the state stores open up for business. And those numbers are only based on the estimated 300,000 Washington residents who would regularly shop there. (Surely that number is a low?)
Aside from the tax boost this will add to the state's coffers, marijuana tourism will be a boon for all Washington businesses. An influx of tourists will bring a boost to Washington towns and businesses that desperately need more traffic, after the last few harsh years. Smart businesses will start capitalizing on I-502 now!
The problem, of course, is that many fear that I-502 will be struck down in federal court. Business investors don't like to operate in an atmosphere of uncertainty. Here's hoping that public opinion stays positive, and that the increase to our state's public and private financial well-being proves convincing enough, to those who might otherwise want to rain on Washington's parade (which is scheduled to start every day at 4:20PM).