Starting a Business / recession

7 Reasons Legal Cannabis Is a Recession-Proof Industry

Whether you regard legal weed as medicine or a vice, it's a great business in good times and a good business in hard times.
7 Reasons Legal Cannabis Is a Recession-Proof Industry
Image credit: Hillary Kladke | Getty Images
Guest Writer
CEO and Co-Founder
5 min read
Opinions expressed by Green Entrepreneur contributors are their own.

In the wake of the 2008 recession, real estate was no longer a viable career path for me. Residential real estate was plummeting, as were most categories of commercial, but I noticed one major exception: a significant number of businesspeople who were successfully renting in California, even in those difficult times, were marijuana dispensaries and cultivations.

I saw an opportunity, and I took it.

I began by investing in two indoor cultivation facilities. Once I had product, I needed somewhere to sell it, so I found business partners with retail experience and together we bought into a Venice dispensary. After completely remodeling, we increased sales by over five times in one year, after which time my partner and I sold our shares back to the owner at a nice profit. Since 2013, I have owned West Hollywood’s premier dispensary, Exhale Med Center, and I am also a partner behind BlazeNow and Bloom vape pens. Having learned about all components of the business from the ground up, I firmly believe the cannabis industry is uniquely positioned to thrive even in a national economy that many predict is due for a correction or recession. Here are the seven reasons why.

Related: Move Aside, CBD: New Data Finds THC Is the Real Medicine in Medical Marijuana

1. New states are legalizing cannabis every year.

The country shows no signs of changing course. As of now, marijuana is legal for recreational use in 10 states, and legal for medical use in 33 states. Those numbers are likely to go up this year.

Related: Is Medical Marijuana Really Legal In Your State? Define Legal.

2. Doctors are coming around to the benefits.

No doctor prescribes a patient a bottle of vodka. We know that even in moderation, alcohol damages the body. But as the benefits of cannabis become more widely understood, doctors across the country are more likely than ever to prescribe it to patients for relief of chronic pain, anxiety and nausea.

3. 'Vice' does well in difficult times.

After the 2008 recession, several studies showed that even those Americans who held on to their jobs tended to drink more than they had when the economy was more stable. A British study suggested that fewer people quit smoking during the recession than before it. The implication is that stress levels and feelings of insecurity are high during times of economic uncertainty, and people seek whatever means necessary, healthy or not, to find solace. As cannabis gains acceptance in the mainstream culture, I believe it will appeal to more and more people as a healthier form of relaxation, even in times when finances are lean.

4. There are still exactly zero recorded marijuana-overdose fatalities.

When consumed in excess, alcohol, cigarettes and even sugary sodas and processed foods lead to severe, even fatal, health issues. Other prescription and illegal drugs can lead to addiction and overdose. In contrast, cannabis use has no such consequences.

Related: Colorado Study Links Marijuana Legalization to Decline In Fatal Opioid Overdoses

5. It’s a rising tide that floats many boats.

The cannabis industry doesn’t just line the pockets of growers and sellers. Construction workers, electricians and plumbers build the dispensaries, whose owners pay the rent that keeps strip malls alive. Designers build websites; craftspeople build paraphernalia. As the industry becomes more mainstream, publicists and marketing agencies find new clients in the business.

6. Cannabis has growing bipartisan support.

Last year, the Pew Research Center shared that 62 percent of all Americans supported legalizing marijuana, while a 2018 Gallup poll showed that, for the first time, a majority of Republicans supported marijuana legalization. Notable among those Republicans is former Republican Speaker of the House John Boehner -- John Boehner! -- who joined the Acreage Holdings board of advisors. He is now an outspoken supporter of cannabis businesses and pro-cannabis legislation.

Related: John Boehner Succeeded in Politics Opposing Marijuana but in Retirement Has Joined the Medical Marijuana Industry

7. Legislative changes will be slow. That’s a good thing.

Right now, the laws around cannabis are murky, confusing and contradictory, resulting in tax penalties for business owners that other industries don’t face. States can take two, four, even six or more years to pass a single law to resolve these issues. But the tides are changing, and progress at this point is inevitable. Slow legislative changes mean cannabis will continue to be a growth industry for years, even decades to come.

 

drinking studies:

https://www.psychologicalscience.org/news/minds-business/employees-changed-their-drinking-habits-after-the-recession.html

http://healthland.time.com/2011/10/17/do-people-really-drink-more-when-the-economy-tanks/

 

Smoking:

https://www.bbc.com/news/health-11713514

 

Republican support:

https://www.washingtonpost.com/news/wonk/wp/2017/10/25/for-the-first-time-a-majority-of-republicans-support-marijuana-legalization/?utm_term=.08e4d11e0354

 

2019 pending legislation:

https://www.forbes.com/sites/tomangell/2019/02/27/marijuana-legalization-bills-are-advancing-in-several-states/#28524d537a35

 

By Javier Hasse
From retailers to growers, producers, and suppliers, there’s a seemingly never-ending list of startup opportunities in this emerging market. In Start Your Own Cannabis Business, marijuana, biotech, and entrepreneurship reporter Javier Hasse introduces forward-thinking entrepreneurs like you to the industry and shares hard-earned tips and success stories from pioneers and visionaries in the marijuana industry.
Learn More

Latest on Green Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to Queue next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to Queue next to any article to save to your queue.

Podcasts episodes coming soon for GreenEntrepreneur.com

There are no Podcasts in your queue.

Click on the Add to Queue next to any podcast episode on Entrepreneur.com to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Entrepreneur Media, Inc. values your privacy. In order to understand how people use our site generally, and to create more valuable experiences for you, we may collect data about your use of this site (both directly and through our partners). The table below describes in more detail the data being collected. By giving your consent below, you are agreeing to the use of that data. For more information on our data policies, please visit our Cookie Policy.

Name Category
Google Ad Serving, Ad Targeting, Analytics/Measurement, Optimisation
Rubicon Ad Serving
Teads Ad Serving
Nativo Ad Serving
Teads Ad Serving
New Relic Analytics/Measurement
Log Entries Analytics/Measurement
Sailthru Content Customization