The Green Rush: Behind the Growing Medical Marijuana Industry

Medical Marijuana We've all heard of the California Gold Rush, but if you haven't yet heard of the Green Rush, you are late to the game. The Green Rush describes the growth of the medical marijuana industry during 2008-2010, when many western and central states saw an exponential boom in the number of dispensaries, or stores, that sold marijuana for medicinal purposes.

Despite the stigma often associated with drugs, today's medical marijuana business (MMJ) is booming. The herb is used to alleviate symptoms for physical ailments such as gout, chronic pain, vision problems and nausea caused by chemotherapy treatment.


Going mainstream

Put aside your assumptions: Pot is no longer only a fringe drug used by hippies at concerts or sold by shady people in alleys; its consumption is becoming more common than ever before. Likewise, the Green Rush is not about a few college kids getting high on a joint or making some pocket money; it involves a lot of hard work and business sense to turn a profit.

Take Erik Santus. He is the owner of Lotus Medical, a medical marijuana dispensary in Colorado. "We approach it [the business] completely differently. We don't put pot leaves on anything. My office looks like a lawyer's office and we run a really tight ship across the boards. That normalcy is what throws everyone off, but it helps us generate consistent sales month after month."

Santus suffers from severe gout, and his wife, Shonna, has endometriosis. In 2007 Erik and Shonna got their medical marijuana cards, meaning that they were permitted to go into dispensaries in Colorado and purchase pot for consumption to help with their ailments. "We went to 30 different places in the first four months, and my wife never found a place she would go back to on her own," he says.

The couple opened Lotus Medical in October 2009 to "make a cool environment for people to learn about this [medical marijuana], where it doesn't feel like a drug deal," Santus says. He admits that they initially got into the MMJ business because it seemed like "crazy profits," but he has learned the hard way, "that isn't the case."


Challenges of the business

The most common initial hurdles involve finding and securing a space to be used as a dispensary; getting financing from a bank; and getting a grow warehouse to create your product, which can cost as much as $200,000 to set up and another $15,000-$20,000 each month to maintain.

After that, you have to keep up with a slew of paperwork regarding your licenses; you have to find, hire, train and retain reliable employees; you have to keep abreast of the constantly changing laws regarding MMJ selling, growing and dispensing; and you have to keep a steady flow of good quality product on your shelves so that you can keep repeat clients coming back.

The biggest and most surprising challenge that Erik has found is learning the grow side of the bud business. "Getting the quality on the shelves and keeping it there is tough, and it involves so many variables. Having a grow house is like setting up a whole farm inside and is really costly."


Catering to a diverse clientele

"Our clientele is varied," says Mitchell Woolhiser, owner of Northern Lights Rx in Edgewater, Colo. "Yes, we have some young customers, but they have real needs. Maybe they fought in Iraq and have PTSD or perhaps they are a construction worker with chronic pain. We have baby boomers that use it too, and we even have a man in his 70s who uses our edible products to relieve back pain and help him sleep."

Elizabeth Robinson, owner of VolumePR and founder of Grow Room Communications in Denver, Colo., says that while "price matters," it is "only one component of why a patient chooses a center." Other driving factors that bring patients into dispensaries are the experience, the owner, the quality of the product and the variety of the product.

Santus says that most of the clients who come into Lotus are women. "I think that is a testament to who we are as a business. Women feel comfortable here and we keep a wide variety of product in stock -- sometimes as many as 28 different strains of marijuana."


Pros and cons

Even with the stress of learning as he goes and being subjected to the rules of the game that are continuously changing as the regulation process unfolds, Santus says that he likes being able to legitimately help people in need, like his mother who is going through cancer treatment for the fourth time. "It gives people alternatives." Woolhiser says that he originally was drawn to the MMJ business in 2009 because it's an emerging market, which is exciting.

The biggest drawback is the unpredictability of the business. Not knowing what the laws will be in the next six months or two years makes it frustrating. "You have to roll with the punches," notes Santus.

"This is a legitimate cash flow business that will be around for the next 5-10 years," Santus says, "but to make it go the distance, you have to do the right things so that you can continuously produce a stream of revenue. The people whose businesses are not going down and are still making money are the ones who aren't doing anything illegal."

Woolhiser believes that regulation of businesses is "important" and that "regulation of the MMJ industry is no different." At the same time, he reminds everyone to "tread carefully" and "respect that it [marijuana] is not legalized. It's for medical use only."


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Terri

It truly amazes me how the idiots up on the Hill have not taken a look at Denver and what they've accomplished since that. It created small businesses which in turn created jobs. and last but least it recieves revenues (taxes) in the amount of over 1.2 million. So it the idiots were to take a look at what Denver has done to boost it's own economy and revenues then why not make legal across the board for every state..

June 26 2011 at 2:28 PM Report abuse rate up rate down Reply
Ruel

by the way are they any reports on how many americans died from agent orange in Viet-nam by agent orange our goverment sprayed ? naaa they wont admit guilt only the pot smokers are the guilty ones in america

June 26 2011 at 10:34 AM Report abuse +3 rate up rate down Reply
Ruel

well i've read about 200 of the post .. i have smoked pot on a daily basis oh sense 1971 say the better part of 40 years. does that make me a drugie ? well i own my own home i have 4 cars in the driveway and at 60 i'm still working everyday and been with the company going on 4 years. The owner of the company i work for is stright as a string, He has never ask me if i smoke pot becouse he knows i will say yes, geting fired ? naaaa i doubt that I'am one of the hightest paid employs in the company smiple becouse i make the company alot of money i get up at 4:30 am burn me one while geting ready for a 12 hour day and thru out the day i burn a few more. and no i dont set at a damn desk all day i bust my ass in the construction trade i travel 75 miles each way to work i leave a hour and a half earily so no i dont drive like a bat out of hell. funnie thing is the same county cops pass me every morning running about a 100 m.p.h. just becouse the can get away with anything the do no " Hot Persiut " its just the free card that comes with the job. its againt the law for me to drive over 65 m.p.h. but its prefectly legal for them to endanger everyone on the damn road becouse the wear a damn badge. i was arrested a few years ago and the arresting office gave me a 30 mile ride to jail raceing a partner cop with speeds in excess of 120 m.p.h. on a busy freeway at 8:00 pm. now who is the should of went to jail me or him? the hell with the law its all a money game . oh by the way it was a bench warrent for not paying a damn $10.00 late fee what a waste of crap. the only reason i was arrested was for tax revenue the get $ 200.00 a day and you cant get out till the next day so thats $400.00 bucks the county made and indangered 1,000s of people to get it. i have come to hate this country i loved for many years. my dad was in the army for 20 years risking his life for our freedom did 2 tours in Viet-nam as a tank comander recived 9 purple hearts thru his service the our country and the only joint i ever remember him smoking was with me. "IF" he was still alive today he would tell you he would rather see me smoking a joint then drinking any day of the week enough said i rest my case

June 26 2011 at 10:26 AM Report abuse +1 rate up rate down Reply
bdrumnbass1

Tobacco....................................340,000 to 395,000
Alcohol (not includeing 50% of all highway
deaths and 65% of all murders).....125,000+
Aspirin (including deliberate overdose).... 180 to 1,000+
Caffeine (from stress, ulcers and triggering
irregular heartbeats, etc.)........ 1,000 to 10,000
'Legal' drug overdose (deliberate or accidental)
from legal, prescribed or patent medicines
and/or mixing with alcohol e.g. Valium/alcohol... 14,000 to 27,000
Illicit drug overdose (deliberate or accidental) from
all illegal drugs................................ 3,800 to 5,200
marijuana (including overdose)........................... 0 (zero)

April 28 2011 at 12:58 AM Report abuse -1 rate up rate down Reply
1 reply to bdrumnbass1's comment
Jeannette Rockey

Yes and Thank You! How many years have we all been saying this? It surely is about time! :) TYU!

May 07 2011 at 3:23 PM Report abuse +1 rate up rate down Reply
Barbara King Schneid

How do these businesses file taxes? From what I've read, not from what I KNOW, medical marijuana is not federally legal so therefore you cannot claim expenses against the income. Does anyone know for sure?

April 27 2011 at 11:18 PM Report abuse rate up rate down Reply
Dont be ordinary

People keep saying that america would make so much money taxing weed? Wouldent you just grow pot and smoke it? Why would you buy it? The gove would charge way more then private growers. The gove does nothing better then the private sector. Why would people buy weed? They would just grow it. Morons

April 27 2011 at 9:35 PM Report abuse +2 rate up rate down Reply
Dont be ordinary

Worthless drug addicts. Gout? Really? People like this are whats wrong with our country. I have a stomach ache, can I have some cocaine? Gout? Really?

April 27 2011 at 9:25 PM Report abuse -2 rate up rate down Reply
1 reply to Dont be ordinary's comment
dobie

Sounds like YOU work for "Big Pharma"...........

Yeppers, "Big Pharma" keeping people ADDICTED, to the likes of Benzodiazepines, Oxycodone, and other 'opioid" chemically produced "solutions" , that suck people into addiction like a friggin VORTEX! Do I need to go on about the 'attributes' of alcohol and nicotine addictions as well?

The forementioned 'crap', KILLS people my friend. Cigarettes and Alcohol, are your "gateway" drugs .

Now, the onus is on YOU to prove Medical Cannabis kills people, who are using it for relief of medical symptoms associated with a plethora of ailments.

June 26 2011 at 2:35 PM Report abuse +3 rate up rate down Reply
tweets922

The government needs to package it, like cigarettes, tax it and make some moeny from the sale of it. Take it out of the hands of the criminals. They need to legalize it and control it, make sure it is safe. i wonder how much money the government could make off of it?????? Why let thugs make the money???

April 27 2011 at 9:14 PM Report abuse -1 rate up rate down Reply
1 reply to tweets922's comment
kaylun

The government regulated ciggaretes that was a really safe product. The government does not keep anything safe. Can you remember back before government regulation being able to buy a real tomatoe in a grocery store that tasted like a tomatoe? Now they all taste like water absolutely no taste. The government ruins everything it touches.

April 28 2011 at 8:51 AM Report abuse rate up rate down Reply
Cliff

My father only went to the 5th grade in school, but he was one of the most knowledgeable people that I have ever known. He use to say if you couldn't find a answer to your question, follow the money !!!!!!!
The only reason that it is illegal to grow your own grass (And I don't use it) but I do see some people's need for it, matter of fact, I know some of these people and they do get relief from grass. But you can't grow your own, because the Govt can't tax it. It's to easy to do it on the side. That was the problem back
during probation when folks were making boot leg whiskey, The Govt could not control it, so they couldn't tax it. It's as simple as that.
Broseaweed

April 27 2011 at 8:48 PM Report abuse +3 rate up rate down Reply
kreisbrock

thanks dwight

April 27 2011 at 8:40 PM Report abuse rate up rate down Reply

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