1. The Legalization of Marijuana
Justin and Will

2. Industry Overview
 Legal Cannabis 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.

3. Overview of Legalization Models

4. Effective Medical
Treatments
UGA study estimated 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

5. Political Views and Age 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

6. Global Perspective
 The global tide around legal marijuana is slowly turning
 Canada -100%
 Jamaica -100%
Australia- Medical only

7. Top Trends To Watch

8. 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

9. Impact on Government Expenditures
 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

10. Tax Benefits
 Major argument behind legalizing Marijuana
 $13.2 Million in Colorado state taxes collected in Aug. and Dec. 2015 setting
record revenue highs and continuing growth.

11. 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

12. Opportunity for Large Corporate
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

13. Microsoft’s Unprecedented Big Move
 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

14. Major Risks and Problems
 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

15. 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

16. Sources
 The ArcView Group
 Marijuana Business Daily
 New Frontier Research
 Colorado Marijuana Enforcement Division
 The Washington Post
 The Tax Foundation
 WebMD
 Business Insider
 Leafly.com
 The Gale Group