Legal Marijuana Industry


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This PowerPoint was prepared for a Management 402 class. The assignment was to take an infant industry and propose possible strategies for profit potential. So, this presentation explores the legal marijuana industry and the profit potential that is waiting to be gained.

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  • Matthew
  • Matthew-Big tobacco companies would be a great partner b/c they have the infrastructureCannabis IndustryMarketing issues
  • These are the “Steven” Jobs of the MJ industrySteve DeAngelo: President at The ArcView Group, who formed ArcView Investor network which hosts angel investors to potentially fund businesses in the marijuana industry. Think Facebook: Angel investors didn’t know exactly what it was or how much profit potential it had but they knew it was the next big thing and so they wanted to get in on the ground floor. This year they gave 5 companies a $1 million dollar investment.Jason Levin: Founder of UpToke which is a portable vaporizer company. Vincent Keber: Dixie Elixirs & Edibles. Pioneering innovation in the marijuana industry. Their product lines include marijuana infused soda
  • ElizabethThe National Organization for the Reform of Marijuana Laws (NORML) was founded in 1970 for one basic purpose: To change both the public attitude and laws such that the responsible use of cannabis by adults is no more consequential than the lawful use of alcohol, tobacco and caffeine products.The organization is located two blocks from the White House, on K St. in Washington, D.C…. Because of this they are able tolobby politicians and get in on the ground floor of policy reform.NORML is the world’s oldest, largest and most respected cannabis law reform organization that is principally known for championing the legalization of cannabis in America from nine percent public support in 1970 to fifty percent today.NORML's mission is to move public opinion sufficiently to legalize the responsible use of marijuana by adults, and to serve as an advocate for consumers to assure they have access to high quality marijuana that is safe, convenient and affordable.The primary functions of the organization are to:Educate the public, media and elected policymakers about marijuana and alternatives to failed prohibition laws;Actively lobby elected policymakers at the local, state, federal and international level to change cannabis laws;Litigate in the state and federal court systems to advance reforms (or to challenge prohibition-related laws);Maintain a massive and publicly accessible repository of cannabis-related information;Provide cannabis consumers verifiable and credible legal consultations, scientific information about cannabis’ health effects and drug testing information;Social and political organizing of cannabis consumers and citizens who do not support Cannabis Prohibition.Mission StatementIncrease public support for non-punitive, non-coercive marijuana policies.Identify and activate supporters of non-punitive, non-coercive marijuana policies.Change state laws to reduce or eliminate penalties for the medical and non-medical use of marijuana.Gain influence in Congress.(as approved by the board on December 1, 2008)Vision StatementMPP and MPP Foundation envision a nation where marijuana is legally regulated similarly to alcohol, marijuana education is honest and realistic, and treatment for problem marijuana users is non-coercive and geared toward reducing harm.George SorosThe billionaire hedge-fund manager has been lobbying for legalizing marijuana for years, donating $3 million on legalization initiatives since the 1990sArcView Investor Network: In May, the group helped invest several million dollars in companies producing technology like vaporizers and devices to develop cannabis concentrates. Crucially, the group also invested hundreds of thousands of dollars in educational reform groups like Students for Sensible Drug Policy. this group is one of the first companies to introduce angel investors with companies producing cannabis products in the brand new legalized marijuana industry…. So, think Facebook. They are looking to connect angel investors with the Steve Jobs of the marijuana industry.Reverand Pat Robertson: last year he publicly advocated regulating the distributing and use of marijuana “the way we treat the beverage alcohol.” This may seem surprising given Robertson’s track record as a fierce social conservative, but he argues for it on the grounds that criminalizing marijuana has created staggering costs for society and imprisoned thousands of people for a nonviolent offense.
  • 2013 "Top 50 Most Influential Marijuana Users" list is meant to identify people who have used marijuana and achieved high levels of success or influence.The idea behind this was to show that many of today’s most influential people have used marijuana and are very successful- marijuana doesn’t lead you down a path of no return
  • Save Our Society from Drugs: Our purpose is to help Americans defeat ballot initiatives, statutory proposals and other attempts to “medicalize” unsafe, ineffective and unapproved drugs such as marijuana, heroin, and crack cocaine. Smart Approaches to Marijuana: Kevin Sabet, former White House advisor and outspoken opponent of legalization uses clever language to disguise what essentially remains a prohibitionist argumentMicheleLenohart: Chief Adminstrator of DEA & Law Enforcement agents often rely on the drug war not just for their paychecks, but their sense of purpose. At a House Judiciary Subcommittee hearing this June, Leonhart revealed the department's rigidity when she repeatedly, absurdly refused to acknowledge that marijuana is less harmful than other drugs, like heroin.
  • Studies done by Brookings Institute showed that American support for the legalization of marijuana is increasing. It began in the 1970s when support for legalization doubled in just 8 years, then it began to fall again during the 80s under the regan administration, since then it has risen drastically to today’s approval level which is at 52% as of July this year. 72% of Americans think that the money spent on the prohibition of marijuana is not worth the actual costs, and although 51% said they would be uncomfortable with public use of marijuana the mejority still favor it’s legalization.
  • Deregulation of MJ and whether or not they are going to let the states handle it, once c and wash. Prediction upon taxes (sintax) Prediction Age laws(Federal gov’t wiping their hands clean)FBI is not supporting it. Not allowing them to write off regular business expenses. They have to pay extra income taxes and look to past governmental documents to justify such practices and only allow businesses to write off for the products they make and not the materials that allow them to make them. Patrice – Commercial – good website with predictions but it will all change when it happensGovernment can tax, (100 million dollars in taxes alone in Colorado)
  • Will RegulateCompany in TN but has a firm in Colorado– companies might still negate the use of mj on the premise. Companies can set their own regulations. Which is Pepsi for instance has a no drug tolerance policy regardless of the state regulationsPatriceWhy companies drug test? Horror stories of why you do drug testsFind a bigot that is strong that it will not be consumed on the job
  • PatriceWho we think will take over the businessMonsanto/ Direct Seed FarmersBoutique GrowersBig Tobacco Companies that have been in the industryPeople are comparing this to the micro and brew pub industry (This industry is still growing and when it excels this industry will base it’s structure off of it)Get pictures!!! Those that are producing the seeds for the weed Theoretical things and then, if this company did this than the
  • ERICSay “growth”What are the SubstitutesChart of business growth to maturityWhat % will MJ take from other Substitutes
  • . Users based on Nationwide surveys from 2012. Some experts believe the recreational marijuana industry could explode with a 3.7% increase of users/year in the first five years of legalization.
  • . WWSJ – What Would Stephen Jobs Do?
  • MatthewExample to Steven Jobs and Apple Revenue
  • Legal Marijuana Industry

    1. 1. Legal Marijuana Industry Patrice Boston, Eric Steinbrunner, Matthew McDaniel, Elizabeth Duffey
    2. 2. Marijuana Industry Timeline 1800s Marijuana herbal extract for pharmaceuticals 1930 States begin to outlaw marijuana 1937: Federal government outlaws completely 1996: Proposition 215 passes in California (medical) 1998: Alaska, Washington, and Oregon follow 2010: Proposition 19 declined in California 2012: Colorado and Washington (Graph, 2012)
    3. 3. States with Legalized Marijuana Recreational Use Colorado • Amendment Number 64 Washington • Initiative Number 502 • Regulated the same way as alcohol • One ounce or less if over 21 • Must be 21 up to consume • Board meeting on licensing arrangements • Commercial cultivation, manufacture, and sale of marijuana • December 2013 (Peterson, 2013)
    4. 4. Porter’s Five Forces (Porter, 1979)
    5. 5. Our Proposed Strategy on Industry Structure • Industry leaders and foundation • The general population and advocacy groups involved • Government regulation • Suppliers/Consumers of recreational marijuana • Potential earnings
    6. 6. Industry Leaders Vincent Keber, CEO Dixie Elixirs & Edibles Jason Levin, Founder UpToke Steve DeAngelo, President at Arcview Investment Network
    7. 7. Advocacy • National Organization for the Reform of Marijuana Laws (NORML) • Marijuana Policy Project o Strategic Plan
    8. 8. Opponents
    9. 9. Public-At-Large
    10. 10. Government Regulations The Wall Street Journal, “The Pot Business Suffers Growing Pains” April 22, 2013
    11. 11. Company Regulations
    12. 12. Suppliers www.wbcsd.o rg
    13. 13. Show Me the Money
    14. 14. Recreational Marijuana Comparisons State/Local Taxes Users in Millions Millions 70 60 25 43.8 50 tobacco alcohol 40 Tobacco marijuana 130.6 30 Alcohol 20 Recreational Marijuana 10 Users in Millions 0 Tobacco Alcohol Recreational Marijuana Tobacco/Alcohol based on 2011 Revenues Recreational Marijuana based on Projected Revenues • “It’s time for the government to transfer money from organized crime to the public purse.” Stephen Easton, Frazier Inst. (2009) 60 43.8 tobacco alcohol marijuana 130.6
    15. 15. Sales Potential Projections/25,000,000 Consumers Projections/60,000,000 Consumers 3,000,000,000 7,000,000,000 2,500,000,000 6,000,000,000 2,000,000,000 5,000,000,000 1 gram Revenue/ $ 1,500,000,000 Dollars 3 grams 4 grams 2,000,000,000 5 grams 1,000,000,000 500,000,000 1 gram Revenue/ $ 4,000,000,000 Dollars 3,000,000,000 1,000,000,000 2 grams 0 2 grams 3 grams 4 grams 5 grams 0 10 11 12 13 14 15 16 17 18 19 20 10 11 12 13 14 15 16 17 18 19 20 Selling Price/ $ Dollars Selling Price/ $ Dollars 2011 US alcoholic drink industry revenue:163.5 billion • 2012 US tobacco industry revenue: 35 billion • • • Cost of production for one gram of marijuana: 10cents (same as one gram of tobacco) Experts believe selling price of the regulated marijuana industry will need to stay at or below street value to decrease alternative means of purchasing.
    16. 16. Five Year Development Plan • Year 1: Federal De-Regulation. • Year 2: State policies start to form. Only boutique marijuana will only be around. • Year 3: Commercial manufacturing will start to take place. Revenues est. $100 million. • Year 4: Advertising and marketing will begin. Revenues est. $1 Billion. • Year 5: Companies start to form strategic alliances to maximize profits: Revenues est. $5-9 Billion.
    17. 17. Questions?
    18. 18. Additional Sources getary Implications of Marijuana Prohibitions r_tax_revenue.html obaccoandhealth/questions-about-smoking-tobacco-and-health-how-many-use Brookings.Edu