Maine moves a step closer to rolling out recreational marijuana, former U.S. House Speaker John Boehner does an about-face on MJ legalization, and Hewlett-Packard becomes the latest big corporation to enter the cannabis industry.
Here’s a closer look at some notable developments in the marijuana industry over the past week.
All but done, finally
Nearly 18 months after narrow voter approval, Maine lawmakers signed off on a bill to regulate the recreational marijuana program that’s expected to stick – with or without the blessing of Republican Gov. Paul LePage.
“It’s been frustrating,” said David Boyer, Maine political director of the Marijuana Policy Project, “and there’s stuff in the bill we didn’t like.
“But ultimately we’re glad the Legislature and state are moving forward toward a regulated marketplace.”
Maine’s House and Senate approved legislation to regulate legal adult-use marijuana sales, likely by 2019 or 2020. And it appears the lawmakers’ support is strong enough to override a potential veto by LePage, who sunk an earlier effort.
Maine’s MMJ market is relatively small, with about $24.5 million in sales in 2017, according to state data.
So, it’s natural that many owners of dispensaries and ancillary businesses are still deciding whether to expand into rec MJ or consider more alluring markets, Boyer said.
“But people shouldn’t sleep on Maine,” he said, noting that businesses should look past the state’s 1.3 million residents to tourism numbers that hit an estimated 35 million in 2016.
Maine may be overlooked by bigger companies, he said, but there are opportunities for small- and medium-sized businesses to cash in.
A key question is to what extent municipalities will opt-in to the program – or opt-out, and act as bottlenecks to a legal industry.
“Voters have spoken for (adult use) to be above-ground,” Boyer said, rather than continuing as a black and gray industry.
“I think some towns will see it as an opportunity to generate revenue, and once neighboring towns see that and that the sky hasn’t fallen, then they will (join) too.”
Political clout?
The appointment of former U.S. House Speaker John Boehner to the advisory board of a cannabis company could spark investment in the sector, but momentum on federal marijuana reform is less likely, experts said.
Boehner – a Republican and one-time opponent of marijuana reform – joined the advisory board of Acreage Holdings, a New York company with marijuana cultivation, processing and dispensing operations in 11 states.
Less than a decade ago, Boehner said he was “unalterably opposed” to MJ legalization.
But Boehner tweeted this week his thinking had “evolved” and that he is now convinced descheduling the drug is needed to “help our veterans and reverse the opioid epidemic ravaging our communities.”
In addition to Boehner, former Massachusetts governor Bill Weld, another Republican, also joined the Acreage board.
Vahan Ajamian, a cannabis sector analyst for Toronto-based Beacon Securities, wrote in a research note the “implicit sponsorship of the sector” by the two former politicians should serve as an economic catalyst.
“While we see this as a big win for Acreage, in our view, it is difficult to overstate the impact of this monumental event for the U.S. cannabis sector,” Ajamian wrote.
“This news should serve to legitimize the sector and further perk up investor interest.”
However, John Hudak, a senior fellow at the Brookings Institution, a Washington DC think tank, was skeptical that Boehner’s change of heart would make a big difference in influencing national reform.
“It would have been more significant if he had done this when he was the speaker,” Hudak said.
“I think Boehner is recognizing what a lot of Americans are recognizing – that there’s money to be made in the industry.”
Transaction action
Technology giant Hewlett-Packard helped boost the cannabis industry’s legitimacy by announcing it would manufacture a marijuana-focused version of its electronic sales terminal, known as HPElitePOS.
To make the terminal MJ friendly, HP will preinstall software from Flowhub, a Denver firm that makes compliance and point-of-sale software for the cannabis industry.
The terminals, which retail for roughly $800-$1,300, will be for marijuana stores and cultivators.
While a small number of mainstream companies have gotten involved in cannabis, most, for now, are staying out.
So, when a company of HP’s stature partners with a cannabis business, even an ancillary one, it’s a big deal.
The Electronic Transactions Association – whose members include PayPal, Intel, Visa, Mastercard and Samsung Pay – signaled its approval.
“What’s attractive about the legal cannabis business would be that it’s a new category of merchant, a new product. There’s obviously huge growth potential here,” said Scott Talbott, senior vice president of the Washington DC-based trade group.
“If marijuana is made legal, it’s an opportunity for the payments industry to help deliver electric services to allow merchants and consumers to connect.”
In fact, the association has been holding seminars and luncheons to educate members about the cannabis space.
Next week, the group is hosting a panel on cannabis and gambling during its annual industry gathering in Las Vegas.
“As part of our advocacy and education efforts,” Talbott said, “we hold seminars to discuss the challenges that an industry may face when dealing with conflicting state and federal laws.”
In a related development, the group picked Ben Curren, the CEO of Greenbits, another canna-centric software firm, for its annual 40 Under 40 list.
Jeff Smith can be reached at jeffs@mjbizdaily.com
Omar Sacirbey can be reached at omars@mjbizdaily.com
