The Legalization of Marijuana Final (1)

The Legalization of Marijuana Final (1)

• 1.
  The Legalization ofMarijuana Justin and Will
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  Industry Overview  LegalCannabis is one of the fastest growing industries in the United States at a compounded annual rate of 30%. This industry comes with incredible opportunities, and significant risks.
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  Overview of LegalizationModels
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  Effective Medical Treatments UGA studyestimated the Medicare program would have saved $468 million on prescription medications if all states had medical marijuana Creates new demand from the medical community Improves overall quality of life for suffering patients  HIV/Aids  Insomnia  Glaucoma  Inflammation  Arthritis  Epilepsy  PTSD
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  Political Views andAge Gap  Presidential Election will have an impact  Clinton supports medical legalization and more research  Reclassification from schedule I to II  Trump supports medical legalization with state by state decisions  Against adult legalization and regulation
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  Global Perspective  Theglobal tide around legal marijuana is slowly turning  Canada -100%  Jamaica -100% Australia- Medical only
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  Top Trends ToWatch
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  High Growth Potential Only 4 States allow for Adult use of Marijuana recreationally  Key revenue-generating states like California are now voting on full legalization  Adult use only accounted for 8% of the $4.6B in sales made in 2014 but is predicted to account for 53% of the $22B predicted in 2020
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  Impact on GovernmentExpenditures  Legalization effect on prison spending is a misconception  Harvard Economist Jeffrey Miron estimates $7.7B saved  Could save Justice Dept. $3.2B on minor prosecutions  Issues with detection and driving
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  Tax Benefits  Majorargument behind legalizing Marijuana  $13.2 Million in Colorado state taxes collected in Aug. and Dec. 2015 setting record revenue highs and continuing growth.
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  Investment Flow &Performance Investment into cannabis companies continued to gain ground in 2015 on the private side despite major losses in public sector Private Investment Fundraising Hit New Heights  Peter Thiels Founder’s Fund  Snoop Dogg  Sean Parker  The ArcView Group
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  Opportunity for LargeCorporate Involvement  Looking at the long term future, approval by the federal government will open doors for large corporations  Agriculture, Tobacco, Pharma, and Alcohol companies are expected to be in the mix  Well entrenched, experienced Marijuana companies will be ideal acquisition targets  The complex nature of the market makes acquisitions the best business path for large corps
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  Microsoft’s Unprecedented BigMove  Offering “seed to sale” tracking software  Expanding cloud business  Partnering with Kind, a kiosk and software co.  Microsoft is partnering only with the “government solutions” department of Kind  Compliance play aimed to help keep tabs on sales and commerce
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  Major Risks andProblems  A growing divide between Federal and State legislation  Incredibly limited access to financial services and banking are hurting industry growth  Banks and large corporations are incredibly wary of coming under federal scrutiny/ prosecution  Social impact and fallout  The tax policy on marijuana is impeding business growth without COGS deducted  Most businesses pay 35% on their profits but with Marijuana tax can be up to 82% of profits
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  Personal Outlook &Conclusion  Growing enthusiasm has begun a national policy shift  Drug reclassification and Gov. research will be largest driver in market  Federal legislation reform is essential  Substitution effect and cheaper prices  Too immature to be true commodity market  Specialized private equity groups and funds are the best entry point currently
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  Sources  The ArcViewGroup  Marijuana Business Daily  New Frontier Research  Colorado Marijuana Enforcement Division  The Washington Post  The Tax Foundation  WebMD  Business Insider  Leafly.com  The Gale Group