There are a lot of advantages that come with legalizing marijuana. Decriminalization takes a strain off the legal system, and takes some of the pressure off of America’s clogged prisons. Legal marijuana provides huge tax revenues for states that have taken it off the prohibited substances list, and it’s actually reduced the number of underaged users. However, for all the talk of stimulating the economy and creating new jobs (which is true), we’re already seeing the creation of “big cannabis”.
Long-Term Effects of Marijuana Legalization: Big Cannabis Like Big Pharma?
We’re all familiar with the idea of “big pharma” when it comes to the medical field. In short, it means that a handful of companies with the deepest pockets and the most power dominate when it comes to manufacturing and providing drugs to the public. These companies might each have a dozen, smaller companies that act as faces, but in the end the money all flows back to the big company, which makes all the decisions, and foots the bill for everything from research for new drugs to marketing for new and unique products.
Now that marijuana has become a viable product in so many places, we’re seeing the creation of “big cannabis” in many parts of the country. This list has some of the biggest names and interests in the cannabis field, and all of them are heavy hitters when it comes to marketing and positioning themselves in the marketplace. In fact, we’ve already seen them take big bites out of the cannabis market, staking their claims and setting up operations that have more resources than smaller companies could ever hope to match.
So, will we see big cannabis crush smaller, local companies underfoot, as so often happens to mom-and-pop stores when a big box chain comes to town? Or will the cannabis field stay diversified and competitive?
Uncertain, Check Back Later
Because there is no universal policy regarding cannabis in the United States, it’s impossible to say with any real certainty where the cannabis industry is going to go. For instance, will getting a marijuana license be as simple as getting a liquor license is now? Will licenses be restricted, with only a certain number of them given out? And if those restricted licenses are handed out, what factors determine who gets one? Will some growers be able to sell online, if not in person, or will that all be covered by the same license? Will interstate sales become possible if cannabis is fully legalized at the federal level?
All of these questions, and others besides, need to be answered before we know for certain how much of an advantage big cannabis is going to have in the emerging markets. If licenses are prohibitively expensive, for example, then smaller businesses will have trouble competing with wealthier companies. If, on the other hand, smaller businesses can operate like brew pubs do in many parts of the U.S. now, providing a more unique, localized experience to those looking for one, then it may be possible for smaller growers to slip into a niche market that bigger companies will have trouble filling.
Regardless of how things eventually turn out, though, smaller cannabis producers are going to need to step up their game if they want to avoid getting steam-rolled by bigger competition. That means they need to have their marketing figured out, they need to have packaging and merchandising ready to go, and they need something that makes them different from other producers. Something that not even big cannabis can duplicate. Whether that’s a local feel, a specific flavor, customer loyalty, or some combination of all of these elements, is up to each business to decide for itself.
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