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Mr. Dwyer is a Silicon Valley, California lawyer who was former Associate Editor of the Stanford Law Review (1988-1989), with a A.B. in Economics from Stanford University (1986). He follows technology, gambling and emerging markets.

 

Big Business Is Taking Over California's Marijuana Industry

Date: Sunday, June 24, 2018 8:26 AM EDT

The legal cannabis industry is budding in North America. Yeah, it may sound cliche, but there's really no better way to describe the rapid growth in legal weed sales. According to cannabis research firm ArcView, legal pot revenue grew by 33% in 2017 to $9.7 billion in North America, and it's expected to near $25 billion by 2021, representing a compound annual growth rate of a scorching 28%.

Where's this growth coming from? First of all, Canada legalized medical marijuana back in 2001 and now stands on the verge of allowing adults to purchase recreational weed, legally. Waving the proverbial green flag on adult-use marijuana is a $5 billion bump to the legal weed industry in Canada. To our south, Mexico legalized medical cannabis in June of 2017. And domestically, 29 states have passed broad-based medical pot laws since 1996, with nine states giving the OK for recreational weed use.

An indoor commercial cannabis grow facility.

Image source: Getty Images.

Of course, the U.S. is a really unique case. Unlike Canada and Mexico, marijuana firmly remains an illicit substance at the federal level. As a Schedule I drug, as defined by the Controlled Substances Act, it's deemed as being wholly illegal, highly prone to abuse, and has no recognized medical benefits. In fact, it's on par with LSD and heroin, based on its current classification. This makes state-level legalizations somewhat precarious, and is why most investors have chosen to put their money behind Canadian pot stocks rather than U.S.-based weed businesses.

But regardless of marijuana's legality, one constant remains throughout North America: Big business wants its share.

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