4/20 Brings Much to Celebrate and Contemplate for Cannabis Industry in 2017
By J.J. McCoy, Senior Managing Editor for New Frontier Data
The week of the traditional 4/20 holiday of the cannabis movement and industry was marked by the usual celebrations and demonstrations, from thousands at Hyde Park in London, to like-minded revelers gathered in New York’s Central Park, Washington, D.C.’s National Mall, Chicago’s Millennium Park, Denver’s Civic Center Park, and San Francisco’s Golden Gate Park, respectively.
And even as an article in USA Today underlined how mainstream the social event has become, there were nevertheless some singularly significant activities going throughout the week, as well.
Before staff from New Frontier Data engaged industry representatives at the World Medical Marijuana Conference and Expo this weekend in Pittsburgh, they met with policy leaders at the national level in the White House to share our latest figures for job numbers and tax revenues, and on the state levels in both Salem, Ore., and Eureka, Calif., before appearing on TV with affiliates from both the ABC and Fox networks.
As company founder and CEO Giadha Aguirre de Carcer reminded, cannabis represents a multibillion industry – worth about $6.7 billion last year, and projecting by 2025 to be ringing up more than $25.4 billion in revenue, so we are in a time of critical information-gathering about the social and economic impacts of cannabis.
In Oregon, New Frontier Data’s Senior Economist Beau Whitney addressed that state’s Senate Judiciary Committee, chaired by Sen. Floyd Prozanski (D-Eugene), who also sits on Oregon’s Joint Committee on Marijuana Regulation. He had been asked to provide neutral analysis of proposed legislation, SB1042, intended to allow for exports of cannabis products to adjacent states that have legalized cannabis programs, i.e., California, Nevada, Oregon, and Washington.
Whitney explained that the potential legal issues were very complex, and presented aspects for both positive and negative results. On one hand, such trade could allow Oregon businesses to expand the state’s $500 million legal market into those other markets, tapping into broader opportunities among shared markets worth more than $5.0 billion in legal sales. Conversely, however, he reminded the assembled policymakers that the U.S. Department of Justice’s Cole Memo warns that to avoid federal intervention, legal states must keep their produced cannabis within their own borders. In the current environment, trading across state borders would likely provoke federal intervention and undetermined legal jeopardy.
A couple days later in Washington, New Frontier Data’s John Kagia, executive vice president of industry reports, was invited to present numbers to officials from the Trump administration, whose policy will be significantly influenced by the recommendations of the Office of National Drug Control Policy. While its policy formulation has not yet begun pending more input, Kagia felt it important to note that there has recently been a concurrent shift on Capitol Hill with bills proposed each to protect both medical and adult use businesses in legal cannabis states from federal prosecution; eliminate the tax burden of 280E in the federal tax code; and impose a federal excise tax on cannabis that would begin at 10% and increase to 25% over a five-year period.
Kagia also reminded officials how the cannabis industry has already been proving itself as a powerful engine for job creation, as borne out by New Frontier Data’s projections that just in those states where cannabis is currently legal, the combined industry should generate nearly 300,000 jobs by 2020, with combined sales meanwhile generating nearly $2.4B in cannabis retail taxes and state sales taxes by 2020.
While no concrete decisions have yet come from the policy discussions held two days and about 2,900 miles apart, they nevertheless suggest some meeting of the minds regarding the possible trajectory of the industry nationwide, and yet to be plotted — and tirelessly analyzed — throughout 2017 and beyond.
J.J. McCoy is Senior Managing Editor for New Frontier Data. A former staff writer for The Washington Post, he is a career journalist having covered emerging technologies among industries including aviation, satellites, transportation, law enforcement, the Smart Grid and professional sports. He has reported from the White House, the U.S. Senate, three continents and counting.