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What's next for the legal cannabis sector?

NCIA conference in Denver, 2015. Bruce Kennedy, WeedWorthy
Bruce Kennedy ~ WeedWorthy ~
 
A veteran industry observer looks back on 2014, ahead to next year, and at the growing national acceptance of legal cannabis.
NCIA conference in Denver, 2015. Bruce Kennedy, WeedWorthy
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It’s getting near the end of the National Cannabis Industry Association (NCIA)’s second annual Cannabis Business Summit and Expo in Denver, and Troy Dayton looks exhausted but elated.
 
Dayton is CEO of the ArcView Group, a California-based firm that is one of the legal marijuana sector’s leaders when it comes to bringing together cannabis businesses and investors.
 
ArcView had its own event in Denver several days earlier, and there’s been a lot of overlap in the people attending both conferences. Dayton says he’s been taken at how much more sophisticated, serious and well-funded the  participants appear to be compared to last year.
 
“I think it’s because people recognize that there really is a real opportunity here,” he tells WeedWorthy, “and it’s going to start taking off.”
 
In comparison, Dayton says, 2014 took place during a feeding-frenzy of interest and investment; as both Colorado and Washington State began their experiments with legalized recreational cannabis.
 
“It was a lot of hype and excitement,” he remembers, “and I think there was a little bit of a hangover from that.”
 
Part of that hangover came from the SEC’s crackdown on promoters of some marijuana-related penny stocks, and from federal warnings to potential cannabis industry investors about the possibility of fraud.
 
Dayton thinks the market has not only calmed down in the ensuing months, but has also “smartened-up a little bit to these penny stock pumpers,” he says.  “And also the private market, the quality entrepreneurs, have really shown up, and that is opening up the investors’ check books in a big way.”
 
That being said, the legal cannabis sector is still a business with its own set of risks.
 
“Look at the dot-com boom, look at the social networking boom,” Dayton says. “Not everybody’s going to be successful.”
 
“But one thing I think that makes this different (compared to) those other booms is that we’re not talking about innovation or customer adoption driving things,” he adds. “We’re talking about removing barriers to a market that already, boldly exists underground. I mean, if people are willing to break the law to get this product, that’s what we call a product/market fit, right?”
 
Another sign of how much has changed over the past 12 months are the cultural changes underway nationally.
 
“There’s been a remarkable shift, because cannabis prohibition does not withstand the light of day,” Dayton adds. “If you shine a light on this thing, any reasonable person is going to come to the exact same conclusion: which is that prohibition is a terrible idea, and that people that consume cannabis are just like anybody else.”
 
He also agrees with the media parallels being drawn between the issues of legal cannabis and gay marriage, when it comes to social tolerance and acceptance. 
‘In fact what’s happened over the last week on gay marriage has really given me a sense of hope,” he says. “We know that things that seemed impossible just moments before become possible.”
 
Dayton is predicting some form of federal cannabis legalization will start taking place within the next four or five years.
 
“It’s going to come in the form of the federal government letting the states decide what they want to do,” he says.  “So it won’t be legal everywhere, but many states will follow suit.”
 
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