Cannabis legalization has evolved from a fringe issue to a national discussion in approximately two decades. In the 1990s, only five states permitted the medical use of marijuana. The number gradually increased to eight states, including Washington D.C. However, recreational use remained untouched.
The cannabis industry has grown exponentially due to expanding legalization in recent years. There’s also a flood of venture capital firms and other investors that have made it possible for the industry to break ground in legalizing recreational marijuana. This year, Virginia, New York, Connecticut, and New Mexico joined the states legalizing recreational use.
These changes and the growing sales of cannabis are rapidly advancing globally. Forecasts show that cannabis sales will likely increase from $13.4 billion to $33.6 billion by 2025. The growth opportunity opens up many opportunities for startups, IPOs, and several mergers and acquisitions by companies in real estate, production, distribution, and retail. However, while the industry has opportunities for direct and adjacent participants in cannabis, it’s also forcing changes to companies not involved in the industry.
Effect of the Changes on Large Companies
While possession of marijuana remains illegal under federal law, the landscape is rapidly changing. Some laws now prohibit companies from firing employees for failing a drug test. Courts seem to be siding with workers dismissed from work for off-duty use of cannabis for medical reasons.
Recent cases have left some employers facing discrimination charges against workers who fail the marijuana test.
This could be the basis of Apple’s move to change its policies in favor of cannabis. The company joined the ranks of Amazon as a global corporation in support of a legal, commercial cannabis industry in the country.
The situation is in sharp contrast to what has been the norm in the past. Large tech companies like Google and Facebook have in the past refused to acknowledge the legality of industrial, recreational, or medical cannabis.
Apple’s move to change that stance against marijuana was monumental. In its June statement, the company said it was reviewing its guidelines. Apps handling medical and recreational cannabis sales and delivery are now allowed on the App Store.
The company didn’t make big headlines, like Uber, Amazon, the NFL, or other institutional businesses. Still, the change comes at a time when the cannabis paradigm is shifting for policymakers, voters, and the average citizen.
Hong Kong China October 20 2011 People in the Apple Store at International Finance Center Central Hong Kong opened on the September 24 2011 With 15000 square feet and 300 employees it is one of the biggest apple stores in the world
In November 2021, Republicans, led by Nancy Mace of South Carolina. introduced legislation seeking to legalize marijuana at the federal level. Dubbed The States Reform Act‘, the bill seeks to remove legal hazards that cannabis-related businesses face while regulating cannabis use, just like alcohol use.
The legalization of marijuana presents a significant opportunity for economies on a local and national scale. The move could be the missing link in securing investors’ investment portfolios worldwide.
If marijuana remains illegal, it’ll be hard for investors to capitalize on the industry’s growth. The number of companies dealing with marijuana and trading on public stock is tiny compared to other industries with the same revenue potential.
If marijuana becomes legal at the national level, marijuana companies won’t be limited in listing their stocks on all U.S. exchanges. It will enhance their liquidity and open up access to more investors. If the growth rates for the cannabis space continue in the same trend, key investors are likely to show a keen interest in the industry. This will make the move by Apple, Google, Facebook and other companies seem absolutely visionary.
The cannabis industry is growing, and its legalization will have tremendous effects on some of the world’s largest companies in various industries. As the world waits to see what will happen, you may wonder how the changing policies will affect your company.
Don’t stay in the dark. Contact Navvee for a consultation to ensure your overall business strategy is up to date to reflect this trend.