To Teach the Business of Marijuana, One Professor Faces the Challenges of a New Industry
By Tom Hesse
April 17, 2017
Think it’s tough to get into the marijuana business? Teaching it might be an even taller task.
In addition to volumes of state rules and regulations, marijuana shops face significant hurdles to using federally insured banks and can’t take business deductions on their federal taxes, which they must pay by mailing cash to the government. That’s why students in a new business-of-marijuana course at the University of Denver are getting schooled in tax law, zoning regulations, and even divination.
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Think it’s tough to get into the marijuana business? Teaching it might be an even taller task.
In addition to volumes of state rules and regulations, marijuana shops face significant hurdles to using federally insured banks and can’t take business deductions on their federal taxes, which they must pay by mailing cash to the government. That’s why students in a new business-of-marijuana course at the University of Denver are getting schooled in tax law, zoning regulations, and even divination.
Adding to the confusion, the new U.S. attorney general, Jeff Sessions, “is obviously not a fan of marijuana in any capacity,” said Michael Elliott, an industry lawyer specializing in marijuana who served as a guest speaker in the class. “We’re all sort of reading the tea leaves of what exactly is going to happen.”
Mr. Elliott is one of a number of guest speakers whom Paul Seaborn, a professor of business at the university, is leaning on for the course, which made its debut at the end of March. Mr. Seaborn has done his own research into marijuana in Colorado, where retail sale of the drug became legal in 2013.
The class is important, he said, because even students with no interest in the industry are likely to cross paths with it. After all, marijuana shops need accountants and electricians, too. But to teach a course on the complex nature of the marijuana business, he said, he needed input from business owners and industry experts with firsthand knowledge.
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“They’re the ones who know what the current challenges and opportunities are,” Mr. Seaborn said.
Mr. Elliott, the first member of the industry to address the class, was an early advocate of legal marijuana in Colorado. He now runs his own business providing legal help on marijuana retail. Pot has become a big business in Colorado, surpassing $1 billion in sales last year, so it’s clear why there’s demand for a course on the industry.
But educating students on the business aspects of marijuana is hard, Mr. Elliott said, because the rules are changing and achieving success in the industry takes far more than students ever realize. It’s not just about growing the product and selling it to customers. Mr. Elliott said the rules and regulations, though challenging, have legitimized the industry and taken it a long way from the unregulated “black market” days of selling “weed.”
“There’s this perception that selling weed is something that’s easy to do,” Mr. Elliott said. “But here in Colorado we’re not really ‘selling weed’ anymore.”
‘People Can’t Keep Up’
Maximilian Jiminez, who is allowed to use medical marijuana for his chronic shoulder pain, hopes someday to start a medical-marijuana shop in Colorado. He is not taking Mr. Seaborn’s course, but he took another one, on marijuana law, a little over a year ago. Even after that class, Mr. Jiminez doesn’t know the regulations well enough to open a business. It’s wise, he said, for colleges to expand what they teach about marijuana.
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Some of what he learned a year ago has already changed, and may change again as Colorado explores new rules. In 2015, for instance, Colorado shifted the number of plants a medical-marijuana user was allowed to possess, only to propose changing the number again a year later. Mr. Jiminez doesn’t think anyone is entirely sure yet how the industry works.
“Oh, hell no,” he said. “People can’t keep up with what’s going on in this industry at all.”
Exploring that fluidity is a goal of Mr. Seaborn’s course. It’s not just a matter of figuring out which area of a town is zoned for retail operations and which is zoned for a growing operation, but also how to advertise, how to bank, and how to avoid the stigma associated with the long-illegal drug.
He said the marijuana industry, though challenging, is not the first to face growing pains derived from ignorance. So his class builds on past lessons drawn from the alcohol and tobacco industries. Even businesses that don’t struggle with stigmas can be helpful. In fact, Mr. Seaborn said, many of the early marijuana leaders in Colorado are parlaying what they learned in banking or in consumer packaged goods.
“The value that business schools can add is not by being marijuana experts,” Mr. Seaborn said, “but by having expertise in entrepreneurship strategy and industry evolution.”
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Two dozen students are enrolled in Mr. Seaborn’s course. The mix of graduate and undergraduate students includes those who are interested in getting into cannabis sales and those who are “there really out of curiosity and an academic interest,” Mr. Seaborn said.
Much of the class is drawn from the experiences of pioneers in the business. Mr. Seaborn said “it took a broader search than I normally do when I teach a strategy class or a policy class” just to find sufficient reading material for the syllabus.
For the Public Good
Mr. Seaborn is quick to point out that his course does not endorse the marijuana industry. He views the educator’s role as a “neutral” but important party.
Our university motto is that we’re a private university for the public good, and we do see an important role here as that convening place and a source of knowledge.
“Our university motto is that we’re a private university for the public good, and we do see an important role here as that convening place and a source of knowledge,” Mr. Seaborn said.
Bringing the industry into the classroom will only help the case for legitimacy in retail marijuana, Mr. Elliott said. Just as all the rules and regulations have “weeded out” the black-market sellers from legalized pot businesses, Mr. Elliott said formal instruction in the field will be “kind of a wake-up call to the realities from the perceptions that this is easy.”
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Many issues that Mr. Seaborn’s class covers are ones that Mr. Jiminez, the would-be business owner, cited as essential, such as the “giant gray zone” created by the clash of federal, state, and local laws.
Still, Mr. Jiminez wishes universities would expand the cannabis curriculum to include more-thorough courses on law, policy, and horticulture. To do that, he said, professors will probably have to continue relying on experts in the industry, who have learned through trial and error.
“A lot of the information that’s even coming out now,” he said, “is coming out essentially through people that are at the heart of the marijuana industry.”