“That’s the clear opportunity. You really need the long view,” Kennedy said. “The real question is, is it financially viable for a company to make it through the next three or four years while they’re waiting for the market to open up?”
Since there will be only two permits granted, winning one will be more valuable than in Colorado, which has 1,400 licenses, Woloveck said. And if history in other states is any guide, the law will be relaxed.
Rep. Pat Garofalo, a member of the state task force on medical cannabis, said he worries that the law has created a set of unhealthy incentives for investors.
“What they’re banking on is that the law regarding the customers who have access to this will be expanded, but that the cap on the number of people allowed to provide this product will be maintained,” Garofalo said. “They’re betting on their ability to change future law, which is a softer way of saying crony capitalism.”
The shifting rules, legal complexity and long-term potential of marijuana are attracting lawyers to the industry.
Marijuana is still illegal by federal law, and banks are afraid to process debit and credit card payments for companies that sell marijuana, for fear of racketeering law.
Not only must companies navigate the contradiction between state and federal law, they will need guidance as regulators interpret Minnesota’s law.
Companies must understand a new set of criminal and civil penalties. They must observe rules covering, for instance, how to dispose of stems, seeds and roots and how many cameras to put up in the room where patients pick up cannabis. It’s possible they’ll need to come up with specific blends of cannabis oil for specific types of patients. The draft rules, which run to 40 pages, are expected to change dramatically over the next 30 days, and probably beyond.
“We’ve seen cleanup legislation happen in every single market,” Woloveck said. “Insomnia, chronic pain, post-traumatic stress disorder — that’s another one that we usually see added on.”
Eyeing the opportunity
The list of people and companies who are evaluating the market is diverse.
Members of the Bachman family, which owns the home and garden business, are interested, though not Bachman’s Inc. or any of its officers.
“There is a group of interested family members who are looking into the issue,” the company said in a statement.
Dave Haider, a founder of Urban Organics, an indoor farm in St. Paul, is looking at the business, since his firm already grows vegetables inside the old Hamm’s Brewery.
“We’re definitely evaluating the opportunity,” Haider said. “It’s not much different from our vision for providing quality natural food for the community.”
Brinton, the veterinarian in Willmar, doesn’t want to go solo in the marijuana business. But he thinks his warehouse and laboratory could play a part in the industry.
The Willmar City Council on Monday gave him the go-ahead to pursue it. He’s open to selling the property, or partnering with someone to make marijuana products there.