Rows of cannabis plants grow in the twenty thousand square foot greenhouse at Vireo Health's medical marijuana cultivation facility,

Cannabis industry research firms predict that if legalized, California’s marijuana industry will grow to nearly six and a half billion dollars by 2020. In preparation, Silicon Valley money is pouring into cannabis industry startups. But many existing small pot businesses worry they’ll be squeezed out of the industry by bigger players. Forum discusses the likely winners and losers in the battle for marijuana revenue, how legalization could change California’s economic landscape and the challenges of taxing and regulating recreational pot.

More Information:

Humboldt’s Pot Economy Braces for Possible Legalization (Forum archives)

California Businesses Seeing Green in Legal Marijuana and Prop. 64 29 August,2016Michael Krasny

David Downs, writer, "Legalization Nation," East Bay Express; author, "The Medical Marijuana Guidebook: America's First How-To Guide for Patients and Caregivers"
Beau Kilmer, co-director, RAND Drug Policy Research Center; co-author, "Marijuana Legalization: What Everyone Needs to Know"
Emily Paxhia, co-founder and managing director, Poseidon Asset Managment, a cannabis dedicated investment fund
Nate Bradley, executive director, California Cannabis Industry Association
Don Bessee, executive director, Smart Approaches to Marijuana

  • William – SF

    If legalized, what would be the tax revenues to the state from product sales? What are the formulas for paying taxes by growers – by revenue, by quantity, what? Has an economic analysis been done indicating revenue to state by growers?


    Decriminalizing marijuana is one thing ,but to legalize marijuana for recreational use is going to be disaster for the state with lots of potheads addicts ,many of them will end up to use much harder drugs like opium ,cocaine ,xlmeth ,etc,,,,,

    • geraldfnord

      No, separating the dealers in pot from dealers in other drugs and giving them incentive not to sell to minors should have the oppisite effect.

      The only ‘gateway drug’ effect is due to experiencing the ‘consume something, feel better’ sequence, which most of us learn from caffeine if not mother’s milk.


    Now beside our worries about drunk drivers who are causing thousands of accidents ,we have to add to that the stoned out of mind pot users driving on our roads ,and while the effect of alcohol fades in few hours ,pot effect can last for weeks ,and it is accumilativeand eventually leads to perminent brain damage ,loss of jobs ,


  • Chris OConnell

    In the 3rd year of its great experiment, all is going much better than anyone expected in pioneering Colorado.

  • Livegreen

    I support smart legalization but do have some questions:

    Does Prop 64 include regulation on working under the influence (like alcohol)? That was why a # of newspapers did editorials against the last effort to legalize.

    Also are there any negative medical impacts of smoking marijuana i.e. lung cancer?

    • Bill_Woods

      Getting smoke in your lungs is never going to be good for you.

  • Gee Whiz

    I support the legalization but if big business gets a hold of it, I’m afraid of super additive strains will be developed like tobacco. It MUST be kept away from GMO processes of the tobacco industry. It seems like a natural fit to augment Senior’s limited income sources!

  • Robert Thomas

    What “Silicon Valley” money promotes a nascent cannabis industry?

    Intel’s money? Applied Materials’? Broadcom’s? Hewlett-Packard’s? Finisar’s? Marvell’s? Texas Instruments’? Adobe’s? Cisco’s? Juniper Networks’?


    • Bill_Woods

      I’d imagine it would be money from some VC firm, not tech companies looking to branch out into agriculture.

      • Robert Thomas

        Probably so. Our industry is not financial services, however. Financial services are important for any business sector. Royal and Olivetti and Xerox were instrumental for the burgeoning prosperity of the modern insurance industry but the office equipment business is not the insurance business. Not to mention – and it’s not my expertise – reputable investment firms will be somewhat averse to agricultural projects that must do commerce with bushel baskets of cash.

  • Livegreen

    One of your panelists says there will be a California Dept. that enforces illegal growers. Really? I don’t buy it b/c the State of CA DOES NOT ENFORCE many laws, including off the books businesses & employment. This happens in everything from construction to day care to farms and the state does zip…the State of CA is losing billions of $ in taxes & legal businesses often cannot compete.

  • Ehkzu

    Marijuana was first criminalized in the 1930’s as the result of a racist propaganda campaign by those who’d been making their living off alcohol prohibition. Racist because marijuana was presented as the “Negro drug” and focused on talkng about how drug-crazed Negroes would run around ravishing drug-crazed white women. As a jobs retention program it worked like a charm–and is still working. The claims that marijuana is (a) as dangerous as heroin and (b) has no medical use were both determined not by scientists but by lawmakers. This continues to be the case.

    It is chemically impossible for a stoned marijuana user to be as impaired as you can be on alcohol. You can’t OD on marijuana, but you can on alcohol. Those who oppose legalizing marijuana will not face the social consequences of having a dangerous, mind-altering substance legal while a less-dangerous one is illegal. The perceive legitimacy of society comes from the belief that the laws are both written and enforced impartially. When they aren’t, it encourages disrespect for the law and its enforcers.

    I don’t want stoned drivers on the road, but I’d far rather have them stoned than blind drunk. How about making all mind-altering drugs legal for adults, but then treat any lawbreaking by people under the influence as premeditated?

    Conversely, it distorts the entire legal system to make something illegal because you think it may lead to harmful actions. Sanction the actions, not the possibility of actions, which sound nuts on the face of it.

    Note that the biggest problem of illegal marijuana for most of us is the grow operations in wilderness areas, accompanied by massive environmental damage, as well as the danger of hikers getting shot by guards for these grow operations.

    Note also that there’s a straing of marijuana developed for medical use that has 0% THC–you can’t get stoned on it. Why isn’t that legal now?

    • geraldfnord

      Actually, marijuana was first made illegal in Utah in 1905, in Calufornua around 1914, and in Mexico, which last had not just experienced an influx of Mexicans, but had had well-publicised crimes in dives and army barracks, which of course had nothing to do with such places being filled with heavily-armed 15-25–year-old males.

      You can’t die from pot, but this is irrelevant because noöne on the prohibitionist side argues that you can; their argument that people will waste their lives stoned is a much better one because it is not completely false—we can counter with the truth that some people will always find a way to do that, and winos are not sufficient reason to ban alcohol.

      Maybe you can’t get as impaired to drive on pot as on alcohol, but that’s not as significant as ‘Can you get dangerously impaired on pot?’ —I know I’ve got too impaired to safely operate a bicycle, and it’s affected my karate-dō practice the next day, so I don’t think it’s a non-issue.

      You aren’t wrong though: it remains illegal because it is tabou-tabou, tref, haran, to many people, not for any reasonable reason—this is why medical marijuana is important, it’s impossible to maintain a stable tabou structure for something deemed beneficial. My hope is that once it’s legal, we will be able to see it clearly for what it is, good and bad as any powerful technology can be.

      • Ehkzu

        I was speaking at a national level, though I didn’t say so explicitly. And if you’re that familiar with the history of its criminaliuzation you will agree that criminializing it nationally served as a job-retention program for the “criminalized alcohol-legal complex” and was done by invoking white racism. When the head of the Federal Bureau of Prohibiton, Harry J. Anslinger, was asked about marijuana in 1930, he said it was harmless. But after that bureau was disbanded and he became head of the new Federal Bureau of Narcotics, suddenly it became the source of “reefer madness”–usually with racist elements, as in this quote:

        “Colored students at the Univ. of Minn. partying with (white) female students, smoking [marijuana] and getting their sympathy with stories of racial persecution. Result: pregnancy”[17][18]
        “Two Negros took a girl fourteen years old and kept her for two days under the influence of hemp. Upon recovery she was found to be suffering from syphilis.”[18]” –Wikipedia

        My point about not being able to OD on pot is relevant because the federal government equates it with drugs–such as heroin–that you can OD and die from, while leaving legal a poson–alcohol–that is also lethal in large doses. This relates to my argument that the legal system must be perceived as just and impartial for it to function properly, and that failure to live up to this standard corrodes the social fabric and encourages disresepct for the law.

        Just as the fine old Southern tradition of using the police force as a profit center by local government through nickel-and-diming the local black underclass makes that underclass contemptuous of the police, as the DOJ found was the ase in Ferbuson, MO, to give one example of thousands. The abuse of civil asset forfeiture laws to fill city coffers is another egregious example.

        As for imapirment, yet you can get seriously impaired on pot. I drove stoned once in 1969–didn’t get into an accident but it sure wasn’t safe.

        But as I said I’m fine with driving “under the influence” being illegal. As it is, universally. But today the law has a marijuana user going to jail even if he didn’t drive, didn’t rob, didn’t do anything–exactly the same as if he had. That would be like arresting everyone who plays violent videogames because .1% of them then go out and do something violent. Or arresting all gun owners because tens of thousands of gun crimes are committed every year. That gets us into the world of Minority Report–arresting people for crimes they haven’t committed and may not.

        As I said, I’m not advocating getting high on pot. But that alone is no worse a time-waster for an adult than is spending all day on Facebook. And, for that matter, someone driving while high is probably no more or less dangerous than someone driving while texting. Actually it’s probably less dangerous, and less prevalent.

        Today’s marketing campaign against tobacco has been pretty successful. Certainly here in California, smoking is seen as something no middle class, educated person does. Smokers are seen as a lower order of life–a huge contrast to the situation here when I was a kid. Legalizing it while marketing against it works for me.

        And no one is advocating legalizing it for kids. But even there, the biggest danger to kids these days remains alcohol and stealing mommy’s prescription drugs. Marijuana ranks a distant third to those.

  • dl

    Is there any progress on a dui test that can distinguish between a driver who is a regular user and a driver who is high right now?

  • johnqeniac

    Dear God in heaven. Californians already behave like they are totally stoned even without pot being sold in Walmart. We’ve had it. Let’s hope driverless cars will arrive in time to save us.

  • Jeff C

    While I’m not really sure how legalization of cannabis will work out in California overall, I highly doubt that the benefits of a legal cannabis industry at the current state of affairs will be equitable to people of color in terms of profits, which the already affluent white folks have benefited from over these past several years. It’s already difficult for poor non-white communities to get co-ops started without tons of money already, and I’m highly skeptical how much the taxation regulations that would rise out of legalization will work out for the poor people who want to make a living out of growing and sales of cannabis, while not working in a dead-end retail position at Wal-Mart. Otherwise, what’s the purpose of the American Dream in the first place?


Michael Krasny

Michael Krasny, PhD, has been in broadcast journalism since 1983. He was with ABC in both radio and television and migrated to public broadcasting in 1993. He has been Professor of English at San Francisco State University and also taught at Stanford, the University of San Francisco and the University of California, as well as in the Fulbright International Institutes. A veteran interviewer for the nationally broadcast City Arts and Lectures, he is the author of a number of books, including “Off Mike: A Memoir of Talk Radio and Literary Life” (Stanford University Press) “Spiritual Envy” (New World); “Sound Ideas” (with M.E. Sokolik/ McGraw-Hill); “Let There Be Laughter” (Harper-Collins) as well as the twenty-four lecture series in DVD, audio and book, “Short Story Masterpieces” (The Teaching Company). He has interviewed many of the world’s leading political, cultural, literary, science and technology figures, as well as major figures from the world of entertainment. He is the recipient of many awards and honors including the S.Y. Agnon Medal for Intellectual Achievement; The Eugene Block Award for Human Rights Journalism; the James Madison Freedom of Information Award; the Excellence in Journalism Award from the National Lesbian and Gay Journalists Association; Career Achievement Award from the Society of Professional Journalists and an award from the Radio and Television News Directors Association. He holds a B.A. (cum laude) and M.A. from Ohio University and a PhD from the University of Wisconsin.

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