In the orange glow of grow lights, Aaron Justis is checking on his crop of medical marijuana. It’s a tiny room, not much bigger than an average kitchen, in the back of his dispensary in the Los Angeles suburb of Studio City. But after last week’s election, Justis says, he’ll need a bigger greenhouse. Much, much bigger.
“I think it will just snowball what’s already been happening,” Justis says, ”and really be the true tipping point to ending the war on cannabis.”
California’s medical marijuana industry is currently worth just under $ 3 billion, according to Josh Drayton, deputy director of the California Cannabis Industry Association.
Now that Californians voted to legalize recreational pot, the industry could more than double by 2020, according to an estimate from market research firm Arcview.
“We’re going to see an economic rush,” Drayton says. “Many folks are calling this the green rush. So we’re definitely going to see a new economic base in the state of California.”
Much of the capital is coming from Silicon Valley. Many wealthy tech moguls, like Napster founder Sean Parker, have invested in the industry. Others are hoping to become the Sean Parkers of marijuana, and get in on the ground floor of a burgeoning industry.
This is what selling weed in 2016 sounds like: a dozen 20-somethings clacking keyboards, crunching code, discussing panini options for lunch.
It’s the San Francisco office of a four-year-old company called Eaze, started by Keith McCarty after he sold Yammer, an internal communication tool for businesses, to Microsoft for just over $ 1 billion.
“I was looking for the next wave of technology and became very bullish on this whole on-demand consumer service category. Looking at every product and service that was there, cannabis kept popping up as a natural fit.”
‘Three keystrokes’ to order
Soon, adults across the state may be able to get a joint delivered faster than a pizza.
“Eaze’s mission is to provide the easiest, quickest, most professional way to get access to cannabis in about 15 minutes’ delivery and make it available wherever it’s allowed.”
Frequent medicinal marijuana customer Breauna Kading takes a break from her job running a tech hub to demonstrate how it works.
“It offers a menu of what’s available in your area based on your address,” she says. “You pick from there, and it’s literally three keystrokes. Order what you want, check out, place order and you’re done.”
She fires up the app and decides what she wants — in this case, a vape pen that dispenses medical-grade cannabis. About 20 minutes later, it arrives.
“I”ve had my Eaze come to me much faster than my Uber’s gotten here,” Kading says.
Right now, Eaze is for prescription patients only. But once they get a licence to sell recreational product, they’ll be able to deliver to anyone over 21.
“California is the largest market — it’s about half of the cannabis market in the world — and Eaze is in about 100 cities in California,” McCarty says.
And as more states and more countries legalize marijuana, McCarty says, Eaze plans to expand — into Canada and beyond.
“I think this is a global market over the next five years,” McCarty says.
California expects to reap about $ 1 billion in tax revenue a year from legal marijuana sales.
The ‘downside’ effects
But University of Southern California economist Joel Hay says it’s not worth the cost to the health care system, and to society.
“I think a lot of the downside effects are unquestionable,” Hay says. The use of marijuana has gone up in Colorado and Washington state since recreational marijuana was legalized, but the tax revenues are “nowhere near what’s needed to cope with the long-term problems.
‘My estimate is that the cost of marijuana to society is about $ 30 a day for chronic users.’ - Joel Hay, University of Southern California economist
That money, he says, is needed to treat conditions like psychological addiction, an increase in schizophrenia, the resulting car accidents because marijuana causes a “two to three times increase in traffic fatalities.”
There are also less tangible effects like loss of productivity.
Hay acknowledges that legalization in the world’s sixth-largest economy might well influence other jurisdictions to follow suit. But he hopes it’s a passing — and reversible — fad.
“It’s a tipping point in a pendulum that I hope will swing back in the other direction, as people gain more sensibility about this product,” Hay says. “Keep in mind that marijuana was legal in this country back at the turn of the 20th century — as, by the way, were even more addictive and dangerous drugs like cocaine.”
Big Weed could muscle in
And there are still so many other unknowns, like what will president-elect Trump will do when he takes office. But many small operators are more worried about getting muscled aside by so-called Big Weed.
“I am definitely scared for the future of my place, and a lot of other people’s in this industry, but that’s just because it’s a growing industry, and it’s just harder and harder to stay competitive,” Justis says. “The truth is, in Los Angeles, where we’re located, it has been the wild west forever.”
Bring it on, he says. It will likely take two years before he gets the appropriate permit to start selling to non-medicinal consumers. By then, he says, he’ll be ready.
In his makeshift greenhouse, he goes around from plant to plant, sniffing the buds.
“Ah! beautiful!” he says.
What does it smell like? It smells like money.