States will continue to legalize the medicinal and recreational use, and yes, costs to remain in the business will increase. However, if the states which legalize intrastate commerce avoid overtaxing cannabis products, then there will be less incentive to transact in the black market (In WA where the tax rate is too high, the black market survives).
Responding to some of the assertions in other posts (with further clarification):
- We're a long way off from interstate shipping, though there are some national models will work. Each state must, at least for now, be considered its own closed market (though there are parallels, so a multi-state approach can be valid).
- While there are a lot of naive ideas and business plans with absurd valuations circulating, and lots of home-grown businesses becoming legal, there are some very sophisticated business models, some already well established, that are positioning themselves for even strong growth.
- The published market numbers are low.
- Cannabis laws are borrowing a lot from wine and alcoholic beverages regulations.
- Big companies will enter the market for the low-end recreational market, but I think the market will look a bit like beer - There will be room for 'craft brews'. Certain states have adopted regulatory practices to help preserve a diversity of
small-time growers and dispensaries.
- There are valid medicinal purposes; with further research in the US, companies can refine their products to better target the medical issues (Much research is being conducted in the UK, Israel and Canada already).
- Inhaling anything into your lungs is probably not good - better to ingest tinctures.
- As it becomes more of a commodity, prices will decrease, but there is significant opportunity in all parts of the market.
I spent 3 days at the conference in Las Vegas last week -- sold out, 10,000 participants, and moving to the Convention Center next year. Many, many investors, equipment manufacturers, and other suppliers and service providers in the industry.
Check out an incubator called Canopy which focuses on the industry (Boulder/Berkeley), and ArcView.
Ultimately, my personal view is that cannabis should be descheduled and taxed and regulated in much the same way that alcohol is. Note that alcohol is a drug and is far more addictive and dangerous than cannabis - and it's a way of life for many.... Abuse will always exist, but it's probably best to legalize it, tax it, regulate the manufacture and sale (e.g., some farmers are using land and water and pesticides illegally).