Business

As More States Legalize Marijuana, Texans Consider Investment Opportunities

Support businesses, not directly tied to growing or selling, are luring funds.

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Photo Credit: flicker image by Ruby and Luan

 

To get a sense of what’s at stake for Texas in the debate over marijuana legalization, you only need to look past the state’s northern border and across the Oklahoma panhandle. Colorado’s law allowing recreational marijuana sales took effect on New Year’s Day.

CNN’s Ana Cabrera reported from Denver in late February.

“Marijuana sales are beating expectations on every level,” Cabrera said. “This is meaning huge money for the state of Colorado. We’re talking tens of millions of dollars just in taxes.”

Estimates of how much the legal U.S. market for marijuana is worth vary widely. A conservative projection, by ArcView Market Research, puts it at more than $2.5 billion a year. That’s enough to turn investors’ heads, even though the drug remains outlawed at the federal level.

“There are multimillion dollar funds,” says Tony Alfiere, a marijuana management consultant, “angel investors with very deep pockets, institutional investors stepping out of their comfort zones and reaching out into the cannabis industry, looking for accessory products and marketplace position that’s pretty unmatched. I haven’t seen anything like this since the dot-com times.”

Last year, Public Policy Polling took a survey of Texas voters, regarding the state’s marijuana laws. Nearly 60 percent of respondents favored allowing recreational sales of the drug to adults 21 and older. While the state is a long way from decriminalizing marijuana, the money to be made is already drawing interest from potential Texas investors.

Texas is one of 27 states where growing and selling marijuana remains illegal, even for medical uses. But if the plant itself is still banned, there are a whole host of related businesses that are not.

“The actual growing of marijuana is really only a small piece of the overall marijuana ecosystem,” says Mark Hayden, a spokesman for Marijuana Investment Conferences. The Houston-based organization hopes to match potential investors with companies involved in making everything from agricultural tools to commercial lighting.

But financial institutions are still wary of anything that could put them afoul of federal drug laws. Earlier this year, Houston-based Amegy Bank informed the organizer’s CEO Stuart Maudlin that it was closing his group’s account.

“I think right now that your major branches, [such as] Wells Fargo and Bank of America, are still a little bit more on the fence about this,” says Gold Hood is a financial analyst with Codexx Capital and coordinator of the conferences. “You’ll find some of the smaller banks and credit unions are more willing to give everything like this a go.”

The first conference was originally scheduled to take place in Houston today, but was postponed due to CEO Maudlin’s declining health. It’s now set to take place in October.

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Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media’s business reporter, covering the oil...

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