Why the marijuana industry is the only proper startup industry
The legal marijuana industry is expected to expand to nearly $8 billion by 2020, meanwhile the industry is in a nervous place.
Only last week Congress blocked a vote to keep in place a law which prevents state funds being used to go after states which have legalised marijuana. The Attorney General has made clear he doesn’t like his hands being tied, meanwhile the industry is trying to maneuver to get the law extended during the next budget.
This puts the industry in a rather precarious position, never too sure whether their protective state legislation could be felled at federal level. But this has it’s advantages in other forms, there was recently a little back-and-forth between the media and recreational outfit retail giant REI. Forbes reported that an exec had said entering the marijuana industry had been discussed while the company denied this had been officially discussed.
But that got me thinking, I’m not sure I can name another industry which no big companies have tried to enter.
There are few examples of industries this young, but even if you look back across history with a very loose definition of “industry” it’s still hard to spot another example like it unless you go all the way back to computer software, maybe. At the moment the media is struggling to really give the public a flavour of what’s going on, since the industry is taking off but there are no household names, no big players, no known companies or industry leaders which anyone can point to yet. Articles usually focus on individual companies, all of which are young and interesting, whether it’s women in the industry or the pot companies in Maryland, for example.
This all means that the industries already precarious position is amplified, since any given industry can usually rely on the top players spending big on lobbying in their own interests – those interests probably being aligned with the interests of the rest of the industry a decent proportion of the time.
But there aren’t even that many companies which operate across multiple states, and those that do, like PrestoDoctor for example, tend to have established themselves in the medical marijuana business first. That’s not to say there’s no lobbying power from the marijuana industry, just that it’s not on the scale seen in most other industries.
So it might be that congress finds it much easier to remove the law the blocks state funds being used to go after states which have legalised marijuana, but it’s unclear how much they’ll be able to use those funds anyway. Most of the states legalised cannabis by public vote, and with the strong sentiment in the US that each state should function independently on state-issues, federal involvement in the industry might be seen as government overreach.
However, as this goes forward, we have here an industry introduced by public vote, inhabited entirely by small businesses and with no rely lobbying power in Washington. It’s quite a nice, democratic example of something by the people, for the people. And though the industry may prefer to operate on more solid ground, it may be that once said solid ground is provided it lays the groundwork for the big corporations to set foot on their territory.