These days, Carolyn and her business partner William Smith (not their real names) are planning the launch of the first staffing and employment agency to service the newly legal recreational marijuana industry in Washington State.
For more than a year in Washington and Colorado, it has been legal for adults to possess and consume pot recreationally, but not grow, purchase or sell it. That changed on Jan. 1, when the first recreational marijuana stores opened for business in Colorado.
Washington State is in the process of licensing its first crop of legal pot shops, growers, and processors. Representative Denny Heck (D-WA) testified before Treasury Secretary Jack Lew that Washington State expects $1 billion in legal marijuana revenues in 2014, even though the first retail stores won't open until late spring. Experts predict similar robust numbers in Colorado.
The Green Rush will create tens of thousands of new jobs all across the career spectrum. Thousands of new companies are being created and licensed, all of whom will require staffing and HR help. And unlike the tech boom that preceded it, the cannabis industry is attracting folks from all sectors and age groups.
The nascent industry has created a demand for licensed growers, processors (those who make cannabis-infused edibles, topicals and products) and retailers. And a specialized professional services sector is also emerging to provide legal, financial, accounting, real estate and business consulting, along with packaging, printing, IT, and security.
Carolyn and William are excited about the opportunity to service this marketplace, but are shy about making their involvement with cannabis public. They did not want their real names used in this article, and have not told their current clients about their plans. Instead, like many of their peers, the new venture remains a sideline. Both have created social media aliases for networking purposes.
At a recent Meetup of the Washington Marijuana Business Association, Carolyn and William joined 30 other business pioneers – an eclectic mix in their 30s, 40s and 50s with diverse backgrounds – to compare notes, and network.
It takes the right stuff to be an entrepreneur in any industry, but for participants in the budding legal marijuana sector, there are some unique social and business challenges and opportunities:
The Giggle Factor – Almost every new business introduction is received with inevitable bad pot puns and Cheech and Chong references. You have to have a thick skin if you're going to survive.
The Credibility Factor – Do business and cannabis go together? Is marijuana industry an oxymoron like military intelligence? As a representative of the new industry, you will be held to a higher standard.
Coming Out of the Pot Closet – What will they say at work? At school? At church? Will the neighborhood kids be allowed to come to our house to play? Will I lose clients, friends and family when they find out that I work in the cannabis trade?
Finding Business Resources – It takes a community to start a new industry, and for participants in the legal marijuana sector, there are a host of legal and regulatory requirements to comply with. Building your network of canna-friendly vendors, partners and service providers who understand these rules and regulations will be crucial.
Financial Risks – Perhaps the biggest risk to would-be ganjapreneurs is financial. Establishing business credit remains challenging. Currently banks will not issue or process credit cards, open checking/saving accounts or extend business credit to legal marijuana companies. While there is some expectation that those restrictions may soon be relaxed, until they are, the industry operates on a nearly all-cash basis. This presents additional accounting, taxation, security and other strains on new businesses; a lack of credit can kill an otherwise-promising venture.
Legal Risks – While the U.S. Department of Justice recently issued a memo to U.S. attorneys advising they not interfere with a tightly-regulated state marijuana market, cannabis remains federally prohibited.
No Clear Success Path – In Colorado and Washington it is truly the Wild West. Unlike the end of alcohol prohibition 80 years ago, there are no established marijuana brands, or brand loyalties. Marketing teams in Denver and Seattle, and across the country, are busy creating the first MJ brand identities and consumer experiences from scratch. Exciting innovations are taking place in packaging, marketing and product creation.
So, while the risks are not insignificant, interest remains intense. In Washington and Colorado, and in the 21 states, plus the District of Columbia, where medical marijuana industry is legal, there is a multi-billion dollar marketplace being born.
Which brings us back to Carolyn and William, who met someone at the Meetup to help them create their brand identity. They have decided to build their new business in small steps; financing the initiative one element at a time out of their own pockets. They have high hopes to go public with their canna business sometime in the first quarter of 2014.