These five businesses reflect the changing face of marijuana
When California passed Prop 64 last November, effectively legalizing recreational marijuana in the state, savvy small business owners began gearing up for 2018's oncoming gold or, in this case, 'green' rush. To understand the buzz, you have to first consider the numbers: By 2026, California's marijuana market is expected to be valued at around $6 billion; will generate around $1 billion in taxes; and create over 100,000 jobs.
So it's no surprise that The Profit'sMarcus Lemonis, a newbie when it comes to pot, traveled to the Golden State to educate himself about an industry projected to generate $50 billion on the national level by 2026 and spend some face time with the entrepreneurs eager to dominate this impending marijuana boom.
Below, we take a look at five burgeoning businesses hoping to make their mark on California's newly minted recreational marijuana market.
Adrian Sedlin and his company Canndescent represent the new face of legal marijuana in California. Canndescent is one of many indoor, industrial-sized pot growing operations in the works in Desert Hot Springs, California, a financially challenged community hoping to be saved by cannabis-generated tax revenue.
By mid-2019, Sedlin hopes his company will be earning between $70 and $75 million in gross revenue. He's also trying to rid marijuana of its stoner image, branding his product as the cannabis equivalent of premium wine, with corresponding prices. Canndescent is charging about $3k per pound for its product—from $1,000 to $1500 more than most competitors, hoping to appeal to Californians who might be trying pot for the first time once it becomes legal recreationally.
Cindy Pinzon and Leone Posod are best friends who run a pot edibles company, Treat Yourself. They're striving to market a new and uniquely California product: vegan, gluten-free, marijuana-infused tarts. Cindy used to be an actress and Leone was a police dispatcher – avoiding pot used to be part of her job.
Now they're both all in. They started Treat Yourself in 2015 and haven't looked back. Cindy and Leone are still working out of a tiny home kitchen and have put $15,000 into their business – everything they have – hoping to make their tarts the next big thing.
With the coming legalization of recreational pot in California, many cannabis entrepreneurs typically focus on a single dimension of the marijuana world: growing it, making edibles, or getting a license to operate a dispensary. MedMen is different because it covers several bases at once. It has an investment fund, a cultivation facility, and an expanding chain of fashionable, high-tech dispensaries that look more like Apple stores than stereotypical headshops.
Out front, MedMen has patented display cases, gizmos to see and smell pot, and a whole "look" they will share with other dispensaries – for a price. The approach is aimed far beyond California – the company is positioning itself for the day recreational pot is legalized nationwide, when they want to be your go-to pot shop in every state. Behind the scenes, MedMen also grows its own weed, cutting out the middlemen where possible. While a pound costs roughly $1,000 to grow, it can eventually be sold retail for $8,000.
Stashtwist is a female-operated, delivery-only medicinal cannabis dispensary in the Bay Area. It's run and was founded in 2014 by Andrea Unsworth, a former financial analyst for Moody's. Most customers order products online and are able to get their cannabis within an hour. Stashtwist averages around 15 deliveries of medicinal pot, cannabis concentrates and cannabis edibles each day in and around Berkeley.
Dan Osborne, a grandfather, former minister, and computer specialist, may be an unlikely marijuana mogul, but his company, CLC Brand Labs, is a rapidly expanding indoor marijuana production operation in Desert Hot Springs, California. In five years, Osborne expects his company will net $29 million a year on gross sales of $76 million.
Osborne has several deep-pocketed investors backing CLC Brand Labs and has sound reason to believe legalization will propel his company forward. He also knows it comes at a tremendous cost – Osborne says he can't see his grandkids because his disapproving son-in-law (a pharmacist) is opposed to his profession.