By Becky Olson
The cannabis industry has seen a substantial acceleration in the number of new regulated marijuana markets coming online each year, indicating that business opportunities are finally starting to catch up with the wave of legalization itself.
In 2015 alone, six states launched medical or recreational sales, which is equal to the number of new markets that emerged from 2011 through 2013. Another four states are poised to start medical cannabis sales this year or early next, while New York started its MMJ market in January.
Currently, it takes an average of 18-24 months for the first licensed dispensaries or rec stores to open after legalization, leading to what are often substantial delays before marijuana businesses actually begin generating revenue.
Some states, such as Delaware and Massachusetts, took several years to start medical cannabis sales, while others – such as Minnesota and New York – moved much faster.
Prior to 2010, most states with MMJ programs had weak or altogether absent regulatory systems, making the identification of business opportunities quite risky and challenging. However, delays and major setbacks have still occurred in many states with robust regulatory frameworks, demonstrating the obstacles that can still arise in those markets.
California, Hawaii, Nevada, Oregon and Washington State were among the first states in the nation to legalize MMJ starting in the late 1990s, yet they all only established statewide programs to license producers, processors and retailers within the past two years. Several of those states have yet to even issue business licenses under the new regulatory frameworks.
On the recreational side of the equation, Colorado, Oregon and Washington State were all able to start retail sales fairly quickly after adult-use legalization, with an average time of 15 months. Alaska legalized recreational marijuana late in 2014 and hopes to commence sales later this year. That being said, marijuana businesses in each of the recreational states have nevertheless met varying degrees of local government and community pushback, bans or moratoriums, creating ongoing challenges to establishing operations even in states with full legalization.
Becky Olson can be reached at [email protected]