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By Patrick Moran
While marijuana is currently prohibited in Texas, it is only a matter of time before medical and recreational use is legalized, as the last Viewpoint series produced by the Baker Institute Drug Policy Program argued. When this happens, it will make the cannabis industry open for business in Texas.
As we can see from the experiences of states that have legalized recreational and/or medical cannabis, the industry has strong potential for growth. It also faces significant challenges. The future direction for the marijuana industry is important to consider for entrepreneurs, investors, policymakers and the public. In this Baker Institute Viewpoints series, which runs through Friday, five experts on the marijuana industry examine the question, “What does the future hold for the cannabis industry, in Texas and beyond?” The second commentary follows. Click here for Monday’s entry on industry growing pains.
I believe the Texas marijuana industry faces a series of challenges, which I present in four progressive categories: 1) immediate legislative, 2) short-term regulatory, 3) mid-term rollout, and 4) ongoing.
1) The industry’s immediate challenge is legislative. We must successfully communicate two facts to Texas law enforcement and legislators: First, we are all on the same team. Second, there is a solution that directly and substantially weakens the cartels while strengthening Texas law enforcement. What do I mean?
Marijuana is a gateway drug. Just as that gate can swing negative, it also swings in a positive and life-benefitting direction. Science from some of the U.S.’s closest allies (e.g., Israel and England) has proven the medicinal benefits of this plant, especially regarding seizure disorders in children and PTSD in veterans.
The core question before us is this: Who shall be the gatekeepers in Texas? Until now, the cartels have controlled the gate. They consciously, purposefully harm us and our children. The only entity that can assign a more responsible and accountable guardian is the Texas legislature.
It is estimated that 30 percent of the cartels’ total revenue comes from marijuana sales. Nationally, marijuana generates $50 billion dollars (that’s billion with a “B”) per year, translating into large potential profit for the cartels. Greed is their weakness. By ending Texas prohibition through legislation and regulation, we not only detach our enemy from the gate, we eliminate one-third of his revenue source.
By establishing taxes that encourage rapid industry growth, the legislature can direct those funds towards law enforcement efforts against both the now-weakened cartels and the growing problem of human trafficking.
Texas law enforcement, the marijuana industry and the legislature are allies. The more we embrace that fact, the bigger the opportunity for us to restore and protect this great state.
2) Once legislation passes, the industry’s challenge will be to help establish regulations. We must all work together to draft and install the regulatory framework. Licenses must only be granted to the very best providers to ensure a safe market. Wellness-education and abuse prevention (especially among youth) must be real and effective while still ensuring access to those legally permitted to use.
We must make maximum use of the lessons coming out of Colorado and other pioneering states. For example: sales data proves there is an immediate and permanent shift from smoking marijuana to ingesting through concentrates and edibles as soon as people have the legal ability to do so. Therefore, we must work closely with established entrepreneurs like Tripp Keber (Dixie Elixirs), Ralph Morgan (O.pen Vape) and others who lead the industry in servings-demarcation, product-labeling and transparent corporate practices.
Now is the time. The marijuana industry is leaving its infancy and growing fast. As difficult as this seems at the moment, it is much easier to raise a healthy child than to heal a broken adult. As a nation, we have one shot at getting this right. Texas must engage.
3) The industry’s mid-term challenge will be to actually break ground and begin growing, processing and distributing. Growers, landowners, scientists, producers, entrepreneurs, investors and an army of ancillary-service providers are already establishing a Texas-based network to grow all forms of cannabis from seed-to-sale — by Texans, for Texans.
Texans know the business of agriculture and are masters of adaptation. For example, literally 90 percent of the tools used for growing and harvesting corn can be used for growing industrial hemp. Many existing commercial greenhouses can be used for growing marijuana. However, they need legal access to the seeds/strains and the expertise to bring out each plant’s commercial potential.
Processing and testing facilities can be established in almost any industrial building. Like any other commodity, distribution requires administration, warehouse space and means of transportation. In fact, once we remove the criminal stigma from the plant, ramping up to full production can be expedited by adapting other industries’ best practices.
4) The Texas marijuana industry’s ongoing challenge is, and will continue to be, to live up to our collective ideals. In the long-term, not only will we be stewards of a powerful medicine, we will have the privilege of providing it to our fellow Texans and eventually to others (perhaps around the globe) who trust our brands. I have heard that national-level industry leaders are already working on a code of ethics. This sort of formalized code is one of the keys to developing a successful, accountable and trustworthy industry.
Patrick Moran is CEO and managing partner of AquiFlow. His legal background includes work at a private real estate/oil & gas practice, as well as on Capitol Hill for then-Sen. John F. Kerry. He gained experience as a prosecutorial screener in the Maryland state attorney’s office and has worked on estate, probate and conservatorship issues at a Washington, D.C., boutique law firm. Later, he specialized in creditor’s rights representing national banks.
This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s), and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.
