Weed. Pot. The Devil’s Lettuce. Whatever you want to call it, legal marijuana has become a billion-dollar industry in America. Farmers in areas where the plant is legal are cashing in on the fastest-growing crop. Although states are raking in millions in tax dollars, there are still a lot of gray areas surrounding the legality and long-term effects of marijuana. Let’s take a look at the pros and cons of this controversial new crop.
Marijuana was first made legal for medical purposes in 1996 in California. Over the years, states have slowly relaxed their laws surrounding the plant. Today, more than half of all U.S. states have legal marijuana in some form, and nine states have it legal for recreational use. Even in states where it is illegal, laws are softening. In Illinois, for example, the punishment for being caught with marijuana was reduced from jail time to a fine. The country seems to be making a push towards legalizing marijuana. But will changing laws benefit or hurt farmers?
Pro: Raking In Cash
States that have legalized marijuana are seeing green in more than one way. On medical cannabis, states are raking in anywhere from seven million to 633 million since changing their laws. Massachusetts made one million dollars in just one month on recreational cannabis.
Cannabis cash can help small time farmers, too. While there is a growing debate about the marijuana takeover by some big corporations, struggling areas found economic relief from the plant. After marijuana was legalized in Colorado in 2012, the cash-strapped region of Pueblo County made a small fortune off of growing legal marijuana. In fact, they received enough tax revenue to give local college scholarships to every Pueblo student who wanted one!
Pro: Cut Costs
Marijuana plants have a quick rejuvenation rate compared to other crops (especially timber). It’s ready to harvest after 65 to 70 days of flowering. The outdoor production cost of cannabis can range from 25 cents to 50 cents per gram. However, due to the unpredictability of forces such as nature and bugs, outdoor plants only allow around one harvest per year. Indoor plants costs significantly more (an average of $1.25 per gram), but you can harvest them up to five times every year.
Another benefit is that it requires little manpower. Cannabis requires one-tenth of the manpower of other crops, slashing labor costs.
Con: High Cost of Production
Growing marijuana indoors can be costly. It requires light and temperature-controlled climates, which can rack up huge energy bills. The installation costs of these lights alone can be more than many small-time farmers can afford. Marijuana is very sensitive to light and requires a lot of heat.
Marijuana plants are divas. The plant is very sensitive to light and heat, so you need to be ready to spend serious cash on climate control. Even when you are hanging them up to dry, the conditions should be around 68 degrees with 50 percent humidity. If it gets too dry, the product loses its signature taste. If it gets too humid, it can mold.
Con: Marijuana Is Federally Illegal
Cannabis, being federally illegal, has had some serious drawbacks for farmers. Banking is one of the biggest issues. Banks don’t want to break federal law, and often don’t accept money from marijuana businesses. This can leave farmers without a safe place to keep their money.
Con: So Little Knowledge
Marijuana has been around 500 BC in Asia, but our knowledge about its long-term effects is still limited. Not only do we know little about the effects of the plant, but the legal cannabis industry itself is brand spanking new. Laws still vary wildly state by state, so something that works for a farmer in California may not work for a farmer in North Carolina and many successes in the field are largely due to trial and error.
Overall, legal cannabis has a lot to offer the land industry. The tax money it brings to communities can help fund everything from scholarships to helping the homeless. However, there’s a lot we still need to learn about this crop. Only time will tell the long-term impacts legal marijuana will have on the land industry. For now, we hope you enjoyed learning about what legal marijuana has to offer the land industry. It is also important to keep in mind that while there are listing sites out there specifically for cannabis real estate, it is crucial to find a land consultant with expertise in the area before making any decisions.
Laura Barker is a Marketing Assistant Intern for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.