Is there a clear path for "going legit" once your state legalizes cannabis?

As I visit more and more states where medical and recreational cannabis are legal, I began to wonder what became of the folks who were growing and distributing prior to those occupations being legal. Is there a path to go from black market to a legal business growing cannabis or operating a dispensary?

If this does exist, I would love to pass that info along to some friends I have made over the years in the hopes that they could navigate the change smoothly once certain states get around to legalizing.

On the other hand, if there isn’t an existing playbook or path for making this transition, I would love to hear from any of you who have made the jump from “rogue entrepreneur” to “upstanding businessperson” regarding your experience.


As someone who has been more on the illeagal side. I can tell you there is almost zero chance for any of us to go legal. First off my family lost all land and assets years ago. Secondly the Local Taxs and regs make it almost impossible for us “Just trying to feed out family farmer types”
This is and always will be a very sore subject for me especially. Especially when i see these millionaire suit types, who just buy in because its the thing to invest in. Or what ever story is used. Its sad really. Ive seen whole communities crumble. And they will continue to do so. Till only the same rich follks who got the bills passed are left.
I was never for total legalization. I crack up at the activists who think they actually made a change. Hey buddy you didnt. The might dollar did. Dont fool yourself. Yes its cool and all that. but its not a life style now.its not a way of life. No more peace and love. Just greed greed greed.

CASH CROPPERS SUCK, if you grow strictly for profit and no resepct for the plant or its consumers. You are scum in my eyes.

TL;DR Nope. Dont even bother. Grow your own and dont support dispensaries.


So true, Tom. So true.


I would love to here the answer to this question.


Well I see no one wants to take a stab at this so I guess I will. I’m sure I will get heat for it, or maybe not. Who knows?

The chances of your old time grower friends getting into a legal grow are slim to none. I am sure there are some, but I don’t run into them often. The people I meet who have grows now would have a hard time growing a dandelion. Most don’t even smoke. Never have, never will. They wouldn’t know a good buzz if it kicked them in the head. The modern day grower was an accountant, a doctor, a real estate agent, a lawyer, a computer programmer or some other such thing. They got into it for one thing. Money. They thought it would be easy to throw some seeds in a pot and six months later they would be rich. They had no idea. Once they failed to turn a profit, instead of looking for an old time grower who knew how to grow to straighten them out they looked for more money to continue making the same mistakes. They brought in more accountants, doctors, real estate agents, lawyers, computer programmers or anyone else with money to invest. No experience necessary. They sold off equity for money. More failure followed and more equity got sold off to the highest bidder.
The people with experience were discriminated against. Usually because they were older and the new modern grower was a lot younger. They called the older growers “weeders” or other derogatory names.
It’s. getting tougher and tougher every day to turn a profit. Prices are tanking and inventories are piling up. There is blood in the streets. A few people are making money, but profits are slim. They have been at it for a while and they have learned. But, they learned the hard way rather than turning to the older experienced growers to teach them.
So, I would tell your friends to forget it. And, never buy into an operation. They will take your money and then ignore you. I would tell them to get into a value added part of the business. Edibles or alcohol extraction. Low investment and a decent profit.
That is my opinion and I am welcome to it.


There is a lot of truth to that, however I do find most growers to be egotistical and unyielding in their ways, which can lead to their own downfall. People need to remain coachable. Everyone can’t be the best grower around, even though everyone seems to think this way, right?

Scaling previous models doesn’t usually work, but knowing the plant is a huge benefit. I think a big business needs to pair a seasoned grower with someone who knows scale, like a hot house tomato grower or some sort of nursery manager, or in the field, someone who has grown acres of fruiting crops. New skill sets are needed on both sides. That ego problem does go both ways, people need to work together and find what works best, not fight for being right.

Investment is risky, I know plenty of guys who didn’t meet expectations in year 1 and were pushed out of their own business. If investment is your only source of capital, it could be worth the risk, everything is a risk. I avoided investment at all cost, which required a paradigm shit for me and 100% of the financial risk. Scaling was a huge learning curve and the first 2 years were rough. I certainly would have lost control of my startup had I taken investment. We had the property, I sold my house, my parents sold theirs and we bought this property with a loan in anticipation of going legal, We managed to convince a bank to give us a loan on normal farm merits, not cannabis (too late for them to say no now). It took 40% down payment to get the loan, we expected 30% and would have capital to start. My immediate family and I all cashed out everything we had (mostly retirement plans), I worked for 2.5 years for virtually no pay, just enough to cover bills and eat. Our startup cost $70,000. We made $240k the first year. I screwed up again the second year and got the same low yield, it cost $80k to grow and we made $84k (prices tanked). I nailed it in year 3 from having 2 years of mistakes (learning experiences) under my belt. Cost was $90k and we are set to make $350k-$380k (with 500lbs of loses, prices were stable, but still low). This year I expect costs to be about the same, though we have captial expenditure plans to prevent loses (keeping those costs at half of what we lost so we are sure to get a 1 year ROI). I am shooting for no loses and a slightly higher yield (15%) and hoping the price to continue being steady. We run super lean here, aside from planting and harvest, I do everything else by myself. Those 2 years of adversity taught me to be frugal, I don’t really desire anything I don’t have, which makes life easier. I would sooner buy a bigger tractor and a warehouse than a sportscar and a new residence, at least I can make money off of the tractor and warehouse.

I did hire my neighbor part time to ease the burden this year as we are approved to grow 3 acres of hemp for trimmed flower. I didn’t want to lose my neighbor to another job, he is probably the best worker I have ever met. We pay him well on half-time salary so he has steady income, but can still do his own thing raising sheep. He is so good that I trained him to do clones recently, 20 minutes of explanation and 1 correction and his clones are out pacing mine to rooting and will be transplanted first.


I remember I was at Cannacon [2016]. I was at a booth representing the operation [at the time] and facing with people. This young man comes up to the table. He must have been in his early 20’s. He had kind of a strange look on his face. He looked concerned for some reason. He didn’t say anything for a minute and I finished a conversation with someone else at the booth. As soon as we were alone he asked me about the company, what we were doing, etc. I told him that we were wrapping up the license and the facility.

He asked me, “but aren’t you worried?” - He went on to explain to me that he had been in accounting [if I recall correctly] but now he is the “Master Grower” [lol. A conversation for a different day but that is not a job title in my view]. He asked me how I do what I do, telling me about their struggles, and some of his personal journey in trying to figure things out, asked me a series of questions looking for free advice [they were pretty simple questions so I was kind enough to point him in the right direction]. He had no experience at all growing [anything at all as far as I could tell] and the last “Master Grower” umm… “Went back to sales.” - I mean, why hire some “hippy loser” - one of the, I don’t know how many, professionals and cultivators in the industry that had just been completely screwed out of participation… “How hard can it be?”

My answer was simple, with a smile and a small laugh, “No. I am not concerned.”

You see, they, with their big operation in Eastern Washington, their big investors, with all of their mighty minds and degrees, previous job titles, a full team of experts and ‘industry advisors’, had modelled their performa expecting something like $7.00 per gram wholesale…

Now, my answer to this was pretty simple. “I modeled the company to expect $2.00 per gram with a cost efficiency that would allow far less. I am capable of producing results that may bring a greater price but I will not count on it.” I explained to him that as someone that was opposed to the passage of I-502 in defense of patients medical rights, it’s horrid financial structure and licensing scheme, etc, and had done the math and reviewed the potential [as a result] one and a half years before voting took place, I was well prepared. This gave him an even stranger look on his face because he had followed up his, “We thought we would get 7” with “and now we only get 4.” Sometimes, it pays to have a heart, and not believe you are the smartest people on the plant [because this “stupid stoner” could have done a better job than your ‘business degree’ with the money you just likely lost and promises to people with diamonds in their eyes you cannot keep. Good luck with that. Sure hope none of those investors make concrete shoes in their spare time].

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I went from underground to above ground. One of the first applications submitted.

Don’t fight it and jump straight in. Everyone I know who tried to hold on to their black market all have non-cannabis jobs now. Don’t let your ego get in the way, and take off the rose colored glasses. You either need money to meet the requirements, need to join forces, accept investors, apply for a job in the industry, or start looking for a new job. Those are the options.

Be creative and find a niche, or be prepared for serious marketing expenses. Find buyers as soon as possible. Establish relationships, be realistic and honest. I found my niche in outdoor for extraction while everyone was focusing on retail. I am well established with the extractors that I supply and get special treatment that money cannot buy.


Mad props for looking beyond the obvious “Primrose Path” and finding a healthy niche.


No matter what anyone tells me, the clear reason why so many people are excluded from the market, going from one system to another, or from the black market to a licensed facility, is not a lack of skill, knowledge, or professionalism, it is a reflection of big money forcing terrible measures through the willing ignorance of the public - at the advantage of immoral government agents [that use everything from prison, small arms, and nuclear weapons to assure their extortion and control is not questioned - nor are their ‘stakeholders’ offended]. There is a very big difference between regulation and government reinforced monopoly [See ‘Mao’ for historical data]. As well as a lack of legalization and instead the act of ‘decriminalization’ [whatever that means].

The answer is no. There is no current clear path. It will be case-by-case. There are somewhat easier states and easier paths, it will always depend on the actions of that state, but without proof of concept and an above ground resume, the odds are increasingly less as each day passes [that they will achieve a license, investment, or employment]. I would say the most clear method to advancement at this point is to be overly prepared, humble, or quit.

In Washington State for example they stated that they would ‘look the other way’. They did. They allowed people to bring in their plants over the course of two weeks after inspection without traceability. All kinds of things that made the medical growers and underground growers feel warm fuzzies that things would work out for them. They held a fictional lottery for Retail licenses [selling to the public] but had an open policy for a short window for Wholesale licenses [growing]. The requirements were not to bad at a glance - but the fine print and ‘emergency rulemaking’, in the end, excluded most people without solid financial backing and most of the black market dealers failed because they could not source their income / savings [no seasoned funds with a history]. This included, importantly, the dispensary owners in the state [whoa, right? But they had a legal operation, right?]. This was possible because of the financial requirement put forth you had to meet. Why can’t you have a small operation that is just a small family owned business? That is easy forensics to pass. They also acted as financial planners - deciding who they thought had a good business plan and who didn’t. That is just one mild example of what took place - the list goes on so long it hurts my head. So they need to plan to fight and they need to plan to have lawyers, above board investors or lots of money from their day job, etc. There is a lot to it. If even possible - look at Florida…

Further, the statements people make that this is a ‘new and exciting industry’ are offensive. That is the equivalent of the state legalizing prostitution and since it is now taxed and condoms are required under regulatory guidelines - this must be a ‘new and exciting career opportunity in a brand new unknown world that is learning to have sex as it goes’. “Want a career as a stripper? Come and join our team. No stripping experience required. Minimum two years in tap dance and a degree in underwater pottery required. Be able to lift 50 lbs and file my taxes for me. $10,000 a year and dental.” As though decades of others succeeding in this business has somehow been deleted from the matrix and they hold the keys to reinventing the wheel [in to a square in most cases].

I find it disrespectful to those that came before them. Last week the government was ready to put me in prison for my ‘industry experience’ and now I am just lucky to be underpaid by you or to follow your poor regulations? Oh, please… So I think a lot more respect is due to the history, bravery, and survival of those that ignored the law when the law was immoral. However, the government and a lot of investors see them as dangerous and usually, leading up to and just post passage, demonize them [and everyone else not in the newly forming boyband] as much as possible [and the local news will love to ignore the good voices and join in the pro monopoly chorus]. “Applicants may not have any prior drug convictions.”

I personally was able to go from the black market [sort of], to ‘lawfully’ growing with medical recommendations, to ‘lawfully’ growing under ‘new regulations’. At no point was I not considered a criminal regardless [to this day]. The only people that will have escaped that insanity will be those that now enter industrial hemp. It isn’t as comfy as one might imagine. In a sense, we are all black market just sort of shifted to gray. These regulations are terrible. Beyond the damage of poor regulation I detect no difference in the skill set required to perform a role or to profit from experience. There is nothing unique about the Cannabis community as a whole that is more or less equipped, will succeed or fail [naturally] more or less, than any other community. The Cannabis community is the world’s largest subculture and reflects the population as a whole [every style and sector]. The same people that would fail in the Cannabis industry to make correct decisions and form proper planning are the same people that would likely fail with any other startup for the exact same reasons. Some if it is just luck. Everyone deserves the opportunity to fail. I, for one, will not disrespect history or people and assume that ‘black market’ would somehow mean ‘incapable’. If anything, without such experience, good luck when the budget gets really tight, “Harvard.” Ever fix a ballast? No, you will recommend to your employer more people with more special titles are hired to make up for your lack of knowledge [in actually running the operation].

So, if someone comes to me, and tells me that they are a black market grower, or extractor, or whatever the case may be, I am all ears, and will make the best judgement that I can based on my own experience. Their resilience alone might be valuable to me [as well as their ability to read situations, spot a liar, and hustle]. The problem is that a lot of the people that run these companies and do the hiring do not know how to detect fact from fiction or even what the correct questions to ask might be. They also do not have any street smarts in most cases and cannot determine if this person is a ‘criminal’ or if they will ‘jeopardize the operation’ with their ‘old ways’. ‘Where do you see yourself in 10 years’ does not compare to, ‘I saw a Russet Mite. What is your response?’ or ‘the crop suffered a botrytis infection. What is your process to remediate and what changes do you expect to see in the lab results?’ - The other problem is how many people got burned at the start by the claims made by people that ‘looked and dressed the part’ but had no experience or business acumen when the rubber hit the road [“but he looked like a stoner!”]. They cannot ask the right questions - because they do not know the answers themselves to confirm. Most of the time I am in a job interview, with someone in charge, at current, I easily recognize that I must attempt to educate them in general, let alone on anything complex, for them to even start to understand my value, which they may never be able to understand [maybe a decade from now]. Some of my latest interviews though went very differently - oddly, it wasn’t that either of these two potential employers were more experienced than the others - flat out, they were just wiser people that had really done their research and had very clear and defined [detailed] goals.

So they will have a tough time, at this point, on all fronts.

It can be done though. It has been done many times. It is just a matter of planning, playing the game, and putting the right team [and money] in place to get through the licensing process.

Also, I like to remind people that turning your passions or hobbies into a job is not always the best idea. It sounds great on paper. I just so happen to love what I am doing but for reasons beyond the passion for the plant or end user. If that were not the case I would not participate. When I look out at a canopy I do not think to myself that I am impressed, or happy to help people, or anything like that, that is a forgone conclusion, so my mind is instead focused on the concept that if that nice person I met in accounting is going to put food on the table for their children, this week, next year, ten years from now, that is on me, and my job is to defend these assets and ensure that is possible. That is amplified the more ownership you have. I might bring all kinds of things to the table, that is good, that helps me survive and be useful to others, but at the end of the day I am an insurance policy that costs a small percentage of the operations goals, and fills enough responsibility to reduce the necessity for additional employees. So yes, an underground grower can get in to the industry, just consider how far you want to go, and how willing you are [I had to suffer a lot to go from one end to the other and that includes impacts on my family]. There is nothing wrong with making enough money per year for you and your family, serving up good products, and staying small [if the government will let you] - So remind them of that, and what really matters, that they do not need to shoot for the moon or become the ‘Bill Gates of Cannabis’. Also, note that the ‘thrill’ will be gone and replaced with “TPS Reports” and “I cannot seem to get this label to print right in…”

  • David

Well spoken, Dave. You have obviously been around the block a few times. This is not a business for the faint of heart. I miss the relative simplicity of the good old days.


Me too. I mean I love the challenge and what not, I enjoy my work, but there is a lot to miss. I often think about those moments when I was just… Sitting there in my 8x12 shed thinking, “wow…”

We will get back there one of these days [retirement? lol].

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