The Bay State cannabis market will likely reach around $1.8 billion and it will take years to develop the cultivation infrastructure necessary to meet the demand, according to a business executive in the emerging field. “It’s going to take time,” Tim Keogh, CEO of AmeriCann, said at a State House News Forum hosted with the Massachusetts Cannabis Business Association.
Extrapolating figures from Colorado’s robust legal marijuana market, Keogh projected that the cannabis market in Massachusetts could be around $1.8 billion.
“It’s going to take millions of square feet to meet the demand for cannabis in Massachusetts, and I think it’s going to take years to get that built out,” Keogh estimated.
The Cannabis Control Commission on Thursday could grant its first marijuana business license to Sira Naturals to grow 10,000 to 20,000 square feet worth of marijuana in Milford. Sira Naturals already produces marijuana for the medical market. The first medical dispensary opened in 2015, after voters legalized the intoxicant for doctor-approved therapeutic applications in 2012.
While the product remains illegal under federal law, Massachusetts voters in 2016 followed in the footsteps of Colorado and other states, legalizing a retail marijuana market for all adults over the age of 21. Whether the commission meets the July 1 target for marijuana shop openings is an open question.
Keith Cooper, an entrepreneur who leads Revolutionary Clinics, which has a medical marijuana dispensary in Somerville, noted that marijuana already has a customer base - those who purchase the dried flowers and other pot products on the illicit market.
If the state’s marijuana cultivation was 1 million square feet - which is about one third of a square mile - only about half of that would actually be devoted to “canopy” where the plants grow, according to Cooper, who told the News Service the amount of marijuana reaped from that acreage would vary widely depending on whether it is grown in greenhouses, with hydroponics or under lights indoors.
A roughly 1,000-square-foot room produces about 540 pounds of marijuana per year, according to Cooper, who said greenhouses would produce less than that.
Rob Hunt, co-founder of the marijuana consultancy Shingle Hill, warned that as producers ramp up to meet demand, they risk flooding the market and driving down prices.
“You could do the entire production for the state of Massachusetts in one town,” Hunt told the audience at Massachusetts Continuing Legal Education’s auditorium in Boston. Hunt said he thinks it is smart not to “immediately hand out licenses to everyone,” and said Massachusetts has a chance to grow the market in a managed fashion.
While Hunt said policymakers should focus first on driving illicit pot dealers out of business by not overly taxing the legal market, Sonia Espinosa, co-founder of the Massachusetts Recreational Consumer Council, said those dealers should be encouraged to transition into the legal marijuana sector.
“I like to think of it as a migration,” Hunt agreed. Hunt described himself as the “quintessential” example of someone migrating from the illicit world - “selling pounds on Dead tour” 25 years ago - to a key figure in regulated marijuana enterprises.
Cooper approached the marijuana business from the other perspective, joining Revolutionary after spending the first part of his career in other businesses, including founding Transnational Communications.
“I wasn’t a cannabis guy. Experimented like everybody else did, but since I’m CEO of a company I sorta have to understand what we’re doing in some aspects, so I’ve been doing a ton of experimenting,” Cooper said. “Let me tell you, it is awesome.”
Shaleen Title, who is a member of the Cannabis Control Commission, said she hopes the public stays engaged in the regulation of marijuana and public sentiment will play a role in how the commission proceeds with cannabis cafes and other forms of social consumption.
“I am very worried about the public losing interest,” Title said. She said she expects a final decision on social consumption by February.
Andrea Cabral, who formerly served as Suffolk County sheriff and as Gov. Deval Patrick’s secretary of public safety and security and is now chief executive of Ascend Cannabis, suggested the state could award grants to help companies provide the security required for their marijuana businesses.
“That would help more people get into market,” Cabral said.
Shawn Cooney, of Corner Stalk Farm, suggested the craft beer business in Massachusetts will give people an idea of how the marijuana business will grow in the state.
Jay Youmans, of the Massachusetts Cannabis Business Association, said there will be a job fair and marijuana crime expungement clinic at Roxbury Community College on July 25.
“We really want everyone to be part of this. So if you’re hiring, this is where you need to be,” Youmans said.