This month’s election results mean that about 60 percent of Americans live in a state where cannabis is legal or soon to be legal in some form. With marijuana use on a steady march toward normalization, if not outright national legalization, the booming cannabis industry appears bound for even greater growth, NPR reports. The smell of money is in the air. “Support for legal cannabis was one of the few mandates voters in both red and blue states delivered” on Nov. 8, said Brendan Kennedy, CEO of the marijuana-focused private equity firm Privateer Holdings. Since the passage of the eight ballot measures, he says there’s been a surge of interest from investors “who recognize that the end of cannabis prohibition is inevitable.”
The marijuana market has unique characteristics that make it attractive to investors, as well as unusual risks. The fledgling legal market for marijuana is around $7 billion, says New Frontier and ArcView Market Research. That’s dwarfed by what Kennedy says is the overall $50 billion U.S. market, most of which remains illegal. So as legalization gains steam, the black market shrinks and legitimate investors and businesses stand to monetize tens of billions of dollars. While polls show that about 60 percent of Americans now favor legalization of marijuana, cannabis remains illegal under federal law. Because of federal prohibition, marijuana firms are largely barred from using the banking system. None of this has discouraged the growing legion of marijuana entrepreneurs. Olivia Mannix of the Denver-based marijuana marketing firm Cannabrand says the “phone has been ringing off the hook” with calls from potential clients since the ballot measures passed. She plans to quadruple her staff of six. “I’m not only hiring more employees, but strategic leadership level positions, a strategic adviser for quick growth,” she says.