LAS VEGAS — On Wednesday morning, a Marijuana Business Conference & Expo staff member stood near the end of a four-hour line at the Rio Hotel and Casino Convention Center, waving off hopeful attendees. “The conference is sold out!” he said. “There are no more passes available.”
That’s how things began on Wednesday—with enthusiasm and great hope. The conference ended two days later, on Friday, tinged with a bit more anxiety as the news of Donald Trump’s choice for attorney general, the prohibitionist Sen. Jeff Sessions, broke across the complex.
The Marijuana Business Conference and Expo, the industry’s largest annual gathering, began five years ago with a few hundred pioneers and a handful of booths. “I remember when it was 400 people in Seattle in 2012,” said one attendee. This week’s event, which opened one week after eight states passed legalization measures, attracted 10,000 attendees and more than 300 exhibitors, a new record for the event. There would have been thousands more, but officials with the Rio insisted on upholding fire code capacity limitations.
On Wednesday morning, pre-registered growers, processors, retailers, investors and wannabe marijuana millionaires waited up to four hours in line to obtain their conference credentials. Those who’d traveled to Las Vegas hoping to jump into the convention after last week’s vote found themselves shut out. A phalanx of security guards double-checked passes at the doors. A few shutout stragglers half-jokingly offered to double the money of anyone with an existing pass.
It might have proven a wise investment. Inside, MJ Biz Daily editor Chris Walsh opened the conference with sunny estimates of the market value of the new adult use states. A few years after retail sale open in California, Walsh said, his analysts estimate the state will see $4.5 billion to $5 billion in annual sales. Massachusetts could see $650 million to $750 million; Nevada, $450 million to $550 million, and Maine, $250 million to $350 million.
In Florida, Walsh projected a $600 million to $800 million medical cannabis market once the state’s industry gets up and running.
In total, Walsh projected $6.5 to $7.5 billion in annual retail sales from all eight new states once their industries are up and running at full strength. “That’s 100,000 to 200,000 new jobs, and $25 billion to $30 billion in total economic impact,” he said.
That’s the good news.
The bad news came later Wednesday morning when a group of legalization movement advocates took the stage. After a brief celebration and analysis of the Nov. 8 legalization victories, Drug Policy Alliance Executive Director Ethan Nadelmann turned to the election of Donald Trump and the risks therein.
“Trump has said many things” on the issue of cannabis, Nadelmann said, so it’s hard to know exactly what he thinks or believes. “But look who he’s appointing: Rudy Giuliani, a drug warrior going way back. Jeff Sessions. Chris Christie.” These are all committed prohibitionists and 1980s-style cannabis foes. “His inauguration committee includes Sheldon Adelson and Mel Sembler,” who poured millions of dollars into efforts to defeat legalization measures in 2016. “Things don’t look promising on that front,” Nadelmann said.
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It’s quite possible, he added, that the next attorney general could say: “Why don’t we target one of the biggest players in this industry and take them out, just to send a message?”
Rob Kampia, founder of the Marijuana Policy Project, adopted a more strategic, here’s-what-we-do-next approach. “We’re focusing on the attorney general’s confirmation hearing,” he said, and doing whatever can be done to defend the Cole memo, the Department of Justice policy document that allowed Colorado, Washington, and Oregon to implement adult-use cannabis legalization.
“If we don’t act now with the attorney general situation and the Cole memo, we will miss out on opportunities for the next four to eight years,” Kampia said.
Several staff members with national advocacy groups echoed those sentiments, in private conversations off the exhibition floor. “We’re focusing on defending the gains we’ve made,” one told me. Another said their group was looking to continue on a state-by-state basis, with Vermont and Rhode Island looking especially promising in the coming year. Either of those states could become the first to legalize adult-use cannabis through the legislative process.
Tick Segerblom, a Nevada state senator who helped lead the passage of adult-use legalization on Nov. 8, took a more optimistic outlook. “Your elected officials are aware of the vote that just happened,” he said, with eight states embracing legalization. “The public has moved on.”
In Nevada, Segerblom said, “we are very into states’ rights. That’s why we have gambling here. That’s why we have prostitution here.” If the federal government were to attempt to shut down Nevada’s cannabis industry, he said, “our backs would get up. We’d say, ‘Hell no, you’re not going to tell us what to do!’”
By Friday morning, when news began getting out about the nomination of Sen. Jeff Sessions as Trump’s attorney general, most at the Las Vegas show took it in stride. The news wasn’t great, certainly, but most of the 10,000 made their way to McCarran with a belief that things might get a little rough in the next few months, but the continued expansion of cannabis legalization is a long-term play regardless of any short-term policy moves by the incoming Trump administration.
On my flight home, I sat next to an official with an international business application software corporation. He’d come to the MJ Biz show to check out the industry, he said, because his company saw a lot of potential in it. He left feeling optimistic. Nothing in the morning’s headlines made him rethink that position.
Conference Quick Hits
Much ado about mergers: The Nov. 8 election has affected the cannabis market in other, less obvious ways as well. Bob Morgan, a Chicago-based attorney with the firm Much Shelist, is handling more and more mergers-and-acquisitions work in the cannabis space these days. “It’s still a fairly private market, with much of it operating on word of mouth,” he said. It’s also a volatile market. On Wednesday, once the election returns were in, the asking price for an existing state cannabis license went through the roof. Three years ago, license purchases in adult-use states hovered in the $100,000 range. Now there’s talk of $5 million deals.
The Stanley Brothers go national: The famous Stanley brothers, the Colorado growers who originated the CBD-heavy strain Charlotte’s Web, are expanding nationally through their brand CW. The company’s CBD tinctures are legally classified as hemp oil (less than 0.3 percent THC) and are already being carried in Erewhon Natural Foods and Lucky supermarkets in California. CW officials at the trade show said the company has meetings lined up with Sprouts Farmers Markets and Whole Foods in the coming weeks, and is hoping for a bigger national presence in 2017.
Best parties? We wouldn’t know about that, boss. But we heard the Willie’s Reserve shindig in the 51st floor penthouse of the Rio was wall-to-wall, even though the great one himself was there only in song and spirit. It was a Jane West gig, so we’re not surprised at the fire-code-maxing turnout…The annual Cannabis Crush, co-sponsored by Dixie and Leafly, was the hot ticket late Wednesday night at Foxtail, the exclusive SLS Las Vegas nightclub. Respect to Dixie Brands executive Chuck Smith, who went large with the 70s theme. (Dude, where’d you find that hair?)
Most intriguing products: There weren’t a whole lot of consumer-facing companies at the show; it was heavy on the grow supplies, security companies, and software solutions. But I loved Cannacals, the edible green-cross symbols that bake right into your homemade edibles. They’re put out by Oregon edibles maker Baked Smart, who make a ridiculously delish infused toffee. Also mesmerizing: the Munch Machine, a harvesting device that strips the leaf from the stalk. Invented by Tom Frazer, the thing works with design concepts taken from the hops harvesting industry. And finally: Yes, we saw the famous CannaCloud pod vaporizing system with our own eyes. (“The Keurig of cannabis.”) Maker CannaKorp says it’ll be on the market in adult use states in early 2017, priced around $150, more or less.