Recently, the President tried to defend the recent crackdown on the medical marijuana industry, including raids of legitimate businesses without explanation. While medical marijuana-sympathetic voters generally choose a democratic candidate, voters are now conflicted over who to vote for. Romney has strongly opposed legalization, and the only candidate who supports legalization is Ron Paul, who is trailing Romney badly in the polls. Meanwhile, state governments are dealing with their own legislation debates:

Colorado Asks Obama to Protect Jobs

Last week, President Obama visited the University of Colorado to reach out to younger voters, and cannabis activists took the opportunity to speak out against the recent government intervention in the MMJ industry.  In a press release, it was stated that the U.S. Attorney’s plan to target nearly 200 medical marijuana businesses would result in over 1,000 jobs being lost in the wake of a recession. Meanwhile, three Boulder dispensaries are shutting down this week after the government gave them an ultimatum of moving locations by May 7 or closing.

Hawaii Sees a Spike in MMJ Patients

Since last summer, the number of Hawaii residents with medical marijuana cards has grown by about 7,600 patients – 27% lift in nine months. Hawaiians with MMJ cards are allowed to use, possess, and grow limited amounts of cannabis, but dispensaries are not allowed to operate. This boost in numbers could help pass legislation allowing dispensary operation and in the meantime it will help the businesses of doctors, lawyers, and those who sell cultivation equipment.

New Hampshire and Connecticut Pass MMJ Legislation

The New England states still face opposition to the bills. New Hampshire’s governor stated that he would veto the bill, but there’s still hope for it yet – only 3 of the 11 Senators opposed the bill, and it is rumored that at least two would change their votes, effectively overriding the veto.  In Connecticut, however, the bill is moving to the Senate and their governor has already stated that he supports MMJ and is more likely to not veto the bill.

Connecticut Passes MMJ Bill

A Connecticut bill allowing medical marijuana use has been passed by Congress and is in the hands of state Governor Malloy, who says he plans to pass the bill. The bill contains some of the country’s strictest regulations for the cultivation and distribution of medical marijuana to try to bypass some of the problems the other 16 states face in legalization. A registry of patients will be established as well as a list of diseases approved to use the drug.

Be sure to find out what the status of legalization is in your state as well as which candidates support medical marijuana use and dispensaries.

weGrow Phoenix will be holding a Dispensary Permits Seminar on May 16th from 12:00 – 3:00 PM. This complimentary seminar will cover more information on the financial aspects of owning a dispensary as well as the legalities and process of applying for a dispensary permit.  The seminar will feature Ryan Hurley of Rose Law Group and Dhar Mann the founder and CEO of weGrow Store.

weGrow Phoenix’s Farmers Market on Sunday was a huge success! We had over 350 attendees and 30 vendors join us.  AZ Family, CBS 5, and ABC 15 covered the event Sunday night. Check out this video from AZ Family:

The event was made possible by a wide selection of vendors and services. Here’s just a few who came out:

• 420Patients.com
• BNB – Better New Breed Smoke Shop
• Craig’s Alternative Remedies Services
• Healing Marizona
• The Healing Phoenix
• Miss Edibles
• Herbal Kush
• NORML
• Camp 420
• BuzznBeez Good Food Truck

Stay tuned to the weGrow Blog to find out when we’ll be holding our next weGrow Phoenix Farmer’s Market!

weGrow Founder and CEO Dhar Mann via MMJ Business Daily:

This is the second column in a three-part series.

Once you have carefully considered the unique challenges involved in opening a medical marijuana dispensary and the various ways to mitigate risk, the next step is to identify the right opportunity.

If you’re looking to capitalize on the “Green Rush” in a state that allows medical marijuana dispensaries, you likely have three choices: 1) invest in (or buy) an existing dispensary; 2) apply for a dispensary permit during an open registration process; or 3) launch a dispensary in a jurisdiction where no moratorium is in place.

Whichever approach applies to your situation, it’s prudent to assess the market opportunity before you start to invest a lot of money. In the second part of this series, I’d like to examine the important factors to consider when assessing the financial opportunity of owning a dispensary.

Before I dive into the details, I’d like to make one point of clarification. I will use the term “financial opportunities” frequently. With the exception of Colorado, each medical marijuana state requires you to be a not-for-profit entity. So the term financial opportunities refers to sales potential, not profit potential.

Artificial Scarcity

Why were dispensaries in Los Angeles, the second most populous city in the U.S., closing doors while a dispensary in Oakland reported tens of millions of dollars in sales? A large contributing factor is scarcity (or, in economic terms, artificial scarcity).

In cities and states where medical marijuana distribution centers are heavily regulated, there’s usually a larger financial opportunity.

Oakland, for instance, placed a moratorium on medical marijuana dispensaries to limit the number to four (although it recently increased this number to eight), effectively legislating an oligopoly. Los Angeles, on the other hand, did not cap the number of dispensaries. As a result, medical marijuana centers sprouted up in L.A. at a rapid pace, and in some cases two or three opened within one city block.

Which city offers the better opportunity? Oakland.

The same principle is at work when taxi medallions in major metropolitan cities sell for hundreds of thousands of dollars: Restricting the number of licenses limits the competition, resulting in a larger economic opportunity.

Read more at Medical Marijuana Business Daily.

weGrow Founder and CEO Dhar Mann via MMJ Business Daily:

This is the first column in a three-part series.

On Jan. 24, 1848, when James W. Marshall found gold in Coloma, California, word spread throughout the broader United States about mining opportunities. The news attracted hundreds of thousands of gold-seekers enticed by the idea of cultivating endless fortunes and establishing a new prosperous livelihood in the Golden State.

The sequence of events is what is commonly referred to as the “Gold Rush.” A similar trend was sparked, albeit unintentionally, in October 2009 when David Ogden, the former deputy attorney general, sent a memo advising U.S. attorneys to “not focus federal resources” on “individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.”

This created what is commonly referred to as the “Green Rush,” where myriad businesses are looking to cash in on the seemingly endless opportunities within the medical marijuana industry.

However, like most of the gold-miners left with only the “rush” rather than the gold, an extremely high majority of businesses that decide to chase after the MMJ industry don’t make any money at all, especially when considering this industry’s unique risk-to-reward factor.

But, if you’re like many people seduced by the buzz of the marijuana industry, no lawyer, family member or angel-on-your shoulder is going to convince you otherwise. And you can indeed make money in this industry – if you approach it the right way.

For those fearless entrepreneurs interested in wholesale marijuana cultivation and/or retail distribution, I’d like to guide you through the process of monetizing marijuana opportunities.

In this column I’ll focus on the first step, which is mitigating risk.

While all investment opportunities carry risk, wholesale marijuana cultivation and retail distribution have a very unique one: criminal prosecution.No entrepreneur should ever begin discussing any medical marijuana opportunity without considering the legal risks at the very beginning of the process.

Even if you’re already determined to enter the medical marijuana business no matter the risks, you must understand the discrepancies between state and federal laws and be aware that all preparations of the cannabis plant (whether recreational or medicinal) are classified under Schedule 1 of the Controlled Substances Act.

Furthermore, you must be cognizant of various risk mitigation methods.

Here are five ways to lower your chances of running into trouble with local, state or federal officials by mitigating risk:

#1. Choose the Right Location – This is probably the most important decision you will make. At any given time there are only a few states even issuing medical marijuana dispensary permits. Obviously you should never open a medical marijuana dispensary, delivery service or grow in a non-medical marijuana state.

In states where there has traditionally been less risk of opening a medical marijuana business, such as California and Colorado, there has been increasing pressure from the federal government. In those two states, U.S. attorneys are targeting dispensaries within 1,000 feet of where children gather, such as public schools, so stay away from these areas even if your state allows you to be closer (in California, for instance, you can set up shop within 600 feet of a school, while in Washington DC it’s 400 feet).

And give preference to states with clearer and less ambiguous (if such a thing exists) state-regulated medical marijuana programs, such as Arizona or New Jersey, rather than states with a very weak centralized structure, such as California. I would suggest choosing a state that has passed medical marijuana through the legislature rather than through a voter referendum.

#2. Focus on Transparency – The federal government also has been targeting businesses that operate under the guise of a non-profit organization but are really multi-million dollar back-door operations. It should go without saying that you should be as above board and as transparent as possible. Don’t blatantly lie on your zoning and business application (“patient care” or “plant nursery” may be acceptable descriptions, but don’t use anything egregious ).

Be honest with your landlord about your intentions. Even though it will make the real estate selection process much more difficult and escalate your rent, it’s much better than investing hundreds of thousands of dollars into a building only to see the landlord try to evict you. Have a tight inventory control system to track all products, whether starter plants or finished cannabis, to prevent diversion. Develop a comprehensive business plan and patient handbook. Track patient purchases and perform constant inventory. Use an experienced security company. Always follow best business practices.

#3. Track Pending Cases and Comply With All Laws – Look into whether there are any significant pending legal cases that can alter medical marijuana policy, such as in Michigan, where the Court of Appeals in August 2011 ruled that the state’s MMJ law does not legalize the sale of marijuana for profit. That court decision left 100,000 patients without medicine and forced hundreds of businesses to shut down overnight.

If in an election year, consider if there are any front-runners that are strongly for or against medical marijuana that can affect your marijuana business. And then weigh how the situation would change if each candidate was elected. At the same time, even if inevitably you will be breaking federal law, make sure you are 100% compliant with every local and state MMJ law and regulation.

Read more at Medical Marijuana Business Daily.