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Medical marijuana sure to be a boon for Florida businesses

Rosie Yagielo runs a marijuana business at the southern edge of a state where medical pot isn't available.

Based in a small office in Key Largo, HempStaff doesn't grow the drug or sell it.

Yet it could profit if voters in November approve an amendment to expand the legal uses of medical marijuana. HempStaff is one of 15,000 businesses nationwide that provide services and technology to marijuana growers and dispensaries.

They see Florida as an opportunity. The state's budding marijuana market could be one of the largest in the country within a matter of years if 60 percent of voters approve Amendment 2.

If voters do, then by 2018, medical marijuana users will spend nearly $200 million in Florida, according to estimates by New Frontier, a financial analyst that focuses entirely on cannabis. It says that by 2020 the state will make up 14 percent of the nation's legal marijuana use.

"That trickles throughout the state," said Chris Walsh, editorial director of Marijuana Business Daily. "It could create thousands of jobs, lots of new business opportunities."

At $249 a person, Yagielo trains dispensary workers in states that have legalized marijuana. About 1,200 people in states like Colorado, California and Illinois have taken her four-hour class, which includes tutorials on state laws, the medical benefits of cannabis and how to help first-time patients find the right product.

"If I had my way, I would be the nationwide trainer for dispensary agents," Yagielo said. "Like whatever it's called that does the bartending classes, that would be me."

A legal marijuana market in Florida likely would boost businesses other than the nurseries and dispensaries most commonly associated with the marijuana industry.

Between 21,000 and 33,000 cannabis-related businesses currently exist in the United States, Marijuana Business Daily estimates. About two-thirds of them don't have direct contact with the drug itself.

Marketing firms, insurance agencies and packaging manufacturers all target the niche cannabis market. Investors have built their whole strategy around the growing industry. Software developers and agricultural wholesalers have created products specifically for growing and selling pot.

The state's first legal cannabis, expected late this summer, will be low in the euphoric chemical THC and available only to select patients, like children suffering from severe seizures or cancer.

Amendment 2 substantially increases the number of patients who would be eligible for medical marijuana. That means big bucks for companies like All Green Insurance, one of the only insurance agencies in the country taking a chance on marijuana. Policies would cover associated risks.

A medical marijuana market in the nation's third-largest state could increase All Green's business by as much as 25 percent, said Bill McKnight, an agent with the company.

Colorado-based Prince Insurance started the brand in 2009, sensing that few in the risk-averse insurance industry were willing to take a chance on the marijuana industry.

"It takes a long time and a lot of history for an insurance company to actually gravitate to a new industry … a new risk," McKnight said. "They really don't want it until it's tried and true and all the kinks are worked out, and then they'll come to the business."

As business prospects climb with the increased availability of medical marijuana, companies like BrandHigher, a Massachusetts marketing firm, could see its list of potential clients surge.

"We have a lot of experience with what not to do," said Tawney Pierce, BrandHigher director of sales and marketing.

For instance, don't put "cannabis" or "marijuana" in the business name. Don't decorate checks with a pot leaf. And don't use social media to advertise sales on the drug.

"Don't paint yourself a target," Pierce said. "You'll see a lot of companies that will do that. They're not thinking about it at all, and then their banks kick them out or Instagram kicks them off."

Pierce called the Florida market's potential "enormous."

The economic impact will be felt within Florida as well, said Walsh of Marijuana Business Daily.

"You might have a lot of small businesses that can begin to get involved with this industry," he said. "They don't need to abandon their client base or have to start from the ground up."

Opponents of the medical marijuana initiative say economic development isn't a big enough selling point. The Vote No on 2 campaign's message suggests a broader medical marijuana program would give teenagers access and increase drug addiction in the state.

"Florida's focus should be on creating more jobs and improving education, not on making pot legal and calling it 'medicine,' " Vote No on 2 spokeswoman Christina Johnson said in a statement.

Supporters of Florida's medical marijuana initiative rarely cite economic growth as a reason to legalize the drug. Their campaign is mostly focused around medical care. Still, they know companies elsewhere in the country stand to benefit if Florida expands medical marijuana.

At an industry conference this May in Kissimmee, lawyer John Morgan, the public face and benefactor of the medical marijuana campaign, told business owners from around the country that they should start putting up their own money.

That month, donations to the campaign from people other than Morgan increased. Still, he's the largest donor by far, even though state records show he hasn't spent a cent on the campaign since April.

"It's kind of like when I go to happy hour," he said. "Sometimes, I go to happy hour, have a drink and go home. Sometimes, I close down the bar and I end up at Waffle House at 3 in the morning. I don't know how this is going to end for me."

If the campaign succeeds in earning the 60 percent vote required, the advantage for marijuana companies already operating in Florida is clear.

"It's going to be great for me not to fly every time I go to work and to help people in my own community," Yagielo said. "There's a lot of things I can't do here that I do everywhere else."

Contact Michael Auslen at Follow @MichaelAuslen.

The amendment

Amendment 2 would expand medical marijuana in the state to include patients with conditions such as cancer, HIV, post-traumatic stress disorder and epilepsy. Under the amendment, doctors could recommend marijuana as treatment if they believe the medical benefits outweigh any health risks. Support from 60 percent of voters is required to amend the state constitution.

Medical marijuana sure to be a boon for Florida businesses 07/08/16 [Last modified: Monday, July 11, 2016 7:50pm]
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