Big Marijuana? Not Yet. Feds Still Block Corporate Pot.
Several would-be entrepreneurs have publicly voiced desires to be the "Starbucks of Marijuana," or the "Anheuser-Busch of marijuana," (with the undercover FBI agent who snared State Sen. Leland Yee using that same line, while posing as a pot businessman from Arizona).
Fears of a tobacco-industry-run legal marijuana market were also used -- by marijuana supporters, no less -- to defeat Prop. 19, California's most-recent legalization initiative, in 2010.
Yet capital and cannabis haven't quite sealed the deal. And they won't, not for some time, as Motley Fool points out.
Thank Uncle Sam for that.
Philip Morris is the "obvious candidate" to cash in from marijuana legalization. And rumors of tobacco companies buying up large swaths of the Midwest in order to start growing cannabis are rife. They're also nonsense, just as they were when the rumored Big Tobacco buy-out was in Humboldt and Mendocino counties.
Big Marijuana would require a lot of interstate commerce. And interstate commerce requires federal regulation -- which would require federal legalization. There's no way the feds would regulate conduct deemed to be in violation of federal law. So as long as the Controlled Substances Act remains, there will be no Big Marijuana.
That there is enough. But even if it wasn't, there's no proof that a big company can master the economy of scale on week, as Motley Fool reported last week.
A company needs a product to dominate the market. Right now, small-time growers and dispensaries producing powerful medical-grade cannabis on smaller scales. There is no proof yet that a corporate-controlled, government-regulated mega-weed would have the quality and consistency to steal the market away from dispensaries as well as the bad guys, the black market merchants.
So maybe we'll see Big Marijuana in our lifetimes. Not anytime soon. It'll be a few decades, and many more states legalizing, before it can happen.