Marijuana Laws Spur Small Businesses in Oakland, Elsewhere

[Weedpipe]

An incremental acceptance of medical marijuana has spurred a cottage industry of business ventures — from iPhone applications to lobbyists — whose expansion shows no sign of slowing despite the recession. Instead, pot is the new growth industry.

The market began to take off in 1996, when California became the first state to approve the sale of marijuana for medicinal purposes. Today, medical marijuana sales in California are estimated at $700 million to $2 billion per year. Profits from "canni-businesses" as a whole are potentially much greater.

"It is a social movement with cash flow," said James Anthony, an activist and attorney who has advised numerous dispensaries, of which there are at least 2,100 nationwide, according to the National Organization for the Reform of Marijuana Laws.

The group estimates that Californians alone consume nearly $6 billion of marijuana annually.

The money has always been there, Anthony said. It has just risen to the surface because people think there is less risk of being prosecuted.

The most obvious beneficiaries of what has been dubbed a "hempire" are dispensaries, growers and doctors, who charge up to $200 per consultation.

Newer are the small business ventures such as delivery services and publishers of books about how to start pot-related businesses. Pharmacologists are standardizing the safety and strength of the pot consumed in everything from lemon bars to olive oil.

Companies are preparing special machines, packaging and containers for the industry.

Hotels also are affected by cannabis-related tourism, conventions and competing trade shows that draw thousands to cities. And if anyone has trouble finding what they need, the iPhone and iTouch offer a cannabis application that allows users to locate resources worldwide.

Media involved with pot also have expanded. The Web-based station "Marijuana Radio" has been featured on the front page of the iTunes comedy podcast section, and the Denver Westword news weekly went further by posting a help wanted ad for a reviewer of Colorado's marijuana dispensaries and their products.

In addition, the number of pot lawyers and political consultants have exploded, and a half-dozen marijuana lobbying groups have sprung up in Washington, D.C., a few on K Street. Oakland activist Richard Lee said he spent more than a $1 million gathering signatures for a measure that would permit adults to possess cannabis for personal use and allow local governments to tax it.

Cannabis has become a regular political issue instead of just a crazy, hippie dream, Lee said. His "Oaksterdam University" was the first cannabis college. There are now at least a half-dozen in California, and others are looking at creating online versions of the classes available for about $50 a seminar.

Lee said last year he took in between $4 million and $5 million from his businesses, which also include an advertising agency, a tour company, a bicycle rental and glassblowing business, a gift shop selling souvenirs and merchandise, and the Bull Dog Café in downtown Oakland. (Visitors can take an "Oaksterdam" tour of the city's cannabis dispensaries through Segway of Oakland.)

The Harborside Health Center, an Oakland dispensary that offers numerous services, had about $20 million in gross revenues last year and expects to pay $400,000 in taxes to Oakland in 2010, according to founder and longtime activist Stephen DeAngelo. He employs 76 full-time workers, up from 43 in 2008.

"We are seeing the first stages of this industry that has been in the shadows come into the light," said DeAngelo, a longtime advocate for cannabis legalization. "A legal cannabis industry would be a huge economic benefit."

Those potential benefits have prompted cash-strapped cities and states to take another look at marijuana. Oakland in 2004 became the first city to license medical cannabis outlets. That year, the city's four licensed dispensaries reported $26 million in revenue. Advocates projected income to reach $64 million in 2009.

Those numbers are dwarfed by the $280 billion pharmaceutical industry. But the pot-based figures were enough to convince Oakland voters in July to approve a tax on the proceeds of medical marijuana sales that could raise $300,000 per year for the city.

Advocates also were heartened recently by signals from President Barack Obama's administration that federal authorities were backing off pursuing smokers or distributors of medical cannabis as long as they operate according to the laws of their state.

That does not mean selling marijuana is legal or that the patchwork of local, county, state and federal law has been coordinated. But, DeAngelo said, "it is a significant change."

"Every day I went to work," he said, "I didn't know if I would be going to prison or coming home at night."



News Hawk- Weedpipe http://www.420Magazine.com
Source: Inside Bay Area
Author: Angela Woodall
Contact: Home - Inside Bay Area
Copyright: 2009 Bay Area News Group
Website:Marijuana laws spur small businesses in Oakland, elsewhere - Inside Bay Area

[grow4ever]

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The Harborside Health Center, an Oakland dispensary that offers numerous services, had about $20 million in gross revenues last year and expects to pay $400,000 in taxes to Oakland in 2010, according to founder and longtime activist Stephen DeAngelo. He employs 76 full-time workers, up from 43 in 2008.

WOW! That is a substantial revenue base!!

[surfin365]

How did so few collectives get to open shop in a city the size of Oakland?

20 mil in revenue for a non-profit, ok what are they doing for donation of revenue besides 1mil to the legal movement.

just wondering.

[grow4ever]

Non-profits don't have to donate...The US is full of Non-Profits that take advantage of lax laws/enforcement. Non-profits can't show a profit and many businesses take advantage by paying huge salaries. As an example, United Ways is thinking a name change is in order because of its tarnished image linked to executive compensation...Humane Society Executives are paid millions a year and almost nothing is left to help animals. Theoretically, Harborsides Founder, DeAngelo, could pay himself $1, $1000, or $1 million a year...they just can't show a profit...and do not have to donate anything. I would think DeAngelo would take the higher road :-)

[michaelkaer]

How is this for small time- I ordered 500 pipe screens (100 x 5 to the pack) and I will sell them to 420 friendly friends here in this place that does not have a head shop. When I make enough to order more I will double the order, letting it pay for it's self as I go along. Next I will be getting into papers as well as a few items relate to it. This burg could use a head shop! Am I going to be the one to do it, that is the question.

[grow4ever]

I like the entrepenurial thoughts...but how many on this website would actully want to give their real names, home addresses etc? That may be your biggest hurdle. Good luck though :-)