By Julie Makinen
What do a robotics engineer, safe maker, handbag designer and the former mayor of Beverly Hills have in common?
Cannabis will become legal for recreational use in California on Jan. 1, and entrepreneurs from an incredible diversity of industries are figuring out how to get a piece of the pie. And it’s no small pie: University of California researchers say it could be a $5 billion business in 2018 alone, and bring the state and local governments $1 billion in tax revenue.
Pot farms and dispensaries are the main types of enterprises many people associate with marijuana. But the logistics related to growing, selling, consuming and regulating cannabis have created surprising new opportunities in industries from insurance to industrial printing.
Just ask Barry Brucker, a former two-time mayor of Beverly Hills who is president of Independent Ink, a company in Gardena that’s been making specialty inks for aerospace, food and other applications since 1939.
Since Colorado legalized marijuana and began requiring purveyors of cannabis-infused foods to mark them with a symbol indicating they contain pot, Independent Ink has seen a surge in demand not just for their Kosher-approved, USDA-certified edible inks, but also their custom $60,000 printers that can label 3,000 cookies an hour, or 800 candies in three minutes. They can even print on gummy bears.
Although Brucker has competitors in his business, few have entered the marijuana space. “Their boards of directors are very shy to get into the cannabis world, thinking there’s something sinister about it. So that’s good for us. The competition is out there, but they are slow to the race,” Brucker said.
“Cannabis is around 3% to 4%, of our business now, but the legalization in California, long overdue, I think will be a gold rush,” he added. “All the other states where marijuana has been legalized are wonderful… but California will eclipse them tenfold just based on our population.”
According to the Marijuana Business Daily, at least 165,000 people nationwide are employed in jobs directly related to cannabis— that means there are now more marijuana industry workers than there are bakers or massage therapists in the United States. University of California researchers say more than 1,200 jobs will be created in California just for testing and handling cannabis in the legal market — but that’s not all.
Jeanine Moss had her ah-ha moment about the business opportunities of marijuana when she went out one night with some girlfriends to a comedy club and some of them decided to light up (illegally) before going into the show.
“Everyone pulling out baggies and tea tins and nobody can find lighters. Everyone smells like cannabis. Everyone looking for mints and perfume. I thought, there’s got to be a better way,” said Moss, who lives in Marina del Rey. “I went out to try to find something but there was nothing, there was nothing for women. Nothing with high quality, good design and utility.”
In a matter of months, Moss had launched her own line of odor-controlled handbags and accessories, Annabis, that allows people to “carry their cannabis in style.”
“I never dreamed that cannabis would ever be an industry. Who even thought of that? So no, I never thought I’d be in this cannabis business,” said Moss, who used to be a New York-based marketing manager for what she calls “some of the most conservative companies on the planet.”
“But I’ve always watched the development of trends and I knew this was going to be huge. I knew how many people were out there consuming discreetly,” she said. “I think this is going to shoot up over the next 10 years.”
Moss launched Annabis in late 2015, and immediately sold out of all the products she brought to her first conference. Since then she’s come out with three new iterations of handbags based on customer feedback.
“Men have been demanding our products,” she said. “Turns out everyone wants something nice to carry cannabis. Accessories is a $12 billion business in the U.S.”
Legalization, Moss said, “works for us because people will consume in more places – you’ll take it with you to go to girls’ nights out, or parties.” But there will still be demand in prohibition states, she added; her bags feature secret pockets that can conceal cannabis. “You still have millions of women consuming cannabis and want to be discreet. The more legalization the better, but it’s a multi-purpose product.”
California grew approximately 13.5 million pounds of weed in 2016 — 650,000 pounds of medical cannabis, 1.85 million pounds of cultivation for in-state non-medical use, and 11 million pounds of cultivation for export outside of the state, according to a state government report. Overall production isn’t expected to change in 2018, but more consumption will shift away from medical use, state experts predict.
Many of those growers are concerned about keeping their product out of the hands of thieves. So they are turning to businesses like NXT Robotics in San Diego and Socal Safe in Montebello for solutions.
Jeff Debrosse, founder of NXT Robotics, launched his company in 2014, making patrol robots that cover large areas, such as data centers, parking garages or commercial buildings that would be difficult, time-consuming and costly for a security guard to patrol. He didn’t anticipate interest from the cannabis industry, until someone pointed out to him that growers needed a way to protect their high-value crop from being plucked in the fields.
NXT’s Scorpion model is a six-wheeled, multi-terrain autonomous ATV. It is equipped with lighting, a bullhorn, cameras that rotate, fire-detection equipment and thermal imaging that can detect the presence of humans. A security guard controlling the robot can use a microphone to listen to the robot’s surroundings and speak to whomever it encounters. (And no, the Scorpion is not weaponized.)
“Legalization is a really large boon to our business,” said Debrosse. “Now you will have more facilities producing product, and they’ll need more security than other similar ag businesses. We can save growers 50% to 70% on security costs.”
But security concerns don’t end once the product is harvested – in many ways, they are just beginning. Tiffany Havens of Socal Safe, a company founded by her grandfather in 1915, said she’s installing outdoor vaults for growers to protect their crops until they get to market.
“We just did our first outside grow vault in Humboldt County, in the gorgeous wilderness,” Havens said. “It’s out where they grow. They harvest the product and put it right in there. It was a 350 square-foot room out in the middle of the mountains.”
Such vaults can be more than 1,500 square feet, and cost upwards of $200,000, depending on their features. Socal Safe also provides safes for dispensaries, which operate almost entirely on a cash basis due to federal regulations restricting their access to banks.
“We’ve been doing dispensaries 10 years – even prior to when medical marijuana was legalized; we served the underground places,” Havens said. “But now there are [insurance] requirements for safes, so I’m getting people into better safes … tool-rated safes that you can’t break into even in 30 minutes with common tools including a blow torch.”
As marijuana emerges from the legal shadows, at the state level at least, Socal Safe has expanded into developing solutions to help dispensaries transport cash safely, with armored-car type solutions that feature GPS-enabled locks.
Havens said that at first, it wasn’t easy to convince her father, who at 69 still serves as CEO of the company, to expand into serving the cannabis industry.
“With that generation, there’s a stigma when they think about cannabis. I’m from Laguna Beach; everyone got high in the ’70s. He didn’t look at it as a medicine,” she said.
But after her father got cancer and had to have his femur bone removed, he used products containing the non-psychoactive cannabis compound cannabidiol, or CBD, to manage his pain. He started coming around to seeing the medicinal benefits.
“It has helped him out a lot,” Havens said. “It’s nice to know that old dogs can change their minds and learn new tricks.”