Business

'I want to produce the world's best cannabis'

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Media captionMeet the farmer and retailer hoping to cash in on legal Californian cannabis.

In the blistering heat of the Coachella desert, armed security guards ensure there are no unwanted visitors at a gated industrial complex.

The smell is a giveaway before you step inside the nondescript buildings.

With dozens of fans whirring, and under bright lights, Lars Havens shows us thousands of cannabis plants being cultivated by his company, Del-Gro.

Most of the seven-acre (2.8ha) site is still being developed but several rooms are already operational.

Lars has been a nurse, a professional rugby player, mixed martial arts fighter, and a bar manager.

Now he's hoping to capitalise on the world's biggest legal marijuana industry.

Image caption One of the plants being grown on Del-Gro's cannabis farm

On 1 January this year, California began licensing local businesses to grow cannabis for sale within the state.

The total economic output from America's legal cannabis, worth $16bn (£12bn) last year, is forecast to grow 150% to $40bn by 2021, according to BDS Analytics and Arcview Market Research.

Last year, Aspen, Colorado, became the first US city to sell more marijuana than alcohol.

'Most taxed'

"I moved out here to California to put forward a product that connoisseurs are going to be interested in," says Lars. "I want to produce the world's best cannabis."

His product will have to be good, because legal producers will never be able to beat California's illegal dealers on price.

Image caption Del-Gro cannabis waiting to be taken away from the facility and marketed as 'Gentleman's Cut'

Lars claims cannabis is the "most heavily taxed product" in the whole state, taxed at close to 40% when all the various levies are taken into account, and that this might be unsustainable.

"I think you'll start to see some deregulation on taxes, because right now they're almost pricing themselves out of the market."

California's new laws also made it illegal to export the drug out of state, raising concerns about overproduction.

This has been a major problem in Oregon, where there's simply too much cannabis, and farmers have seen prices drop by 50%.

It shows the difficulty and unpredictability of creating a legal market for something which is already available on the black market.

'Mainstream America'

Three hours west of Coachella, the cannabis retailer MedMen has already opened five stores in and around Los Angeles.

It's as far from the stereotypical "head shop" as you can imagine, and has clearly been designed to replicate the Apple Store experience.

Image caption This is what buying cannabis looks like in Los Angeles in 2018

Teams of staff in matching T-shirts help customers browse product information on tablets, with edible cannabis products, oils, and creams on sale alongside the more recognisable "flower".

Daniel Yi from MedMen says it's hard to describe a typical customer: "Who's a typical chair buyer, or a typical soda buyer? they reflect mainstream America.

"We're at that point where it is normal to walk into a store like this, which looks like any other store.

"There are some people who were OK with buying cannabis from a corner drug dealer. There are other people who would never have done anything illegal," he says.

"If you come up with a new app or a new car, you may have to convince people they need this product. With cannabis there's already $50bn consumed in the US alone, and almost 90% of that is in the illegal market," says Daniel.

"So part of this is bringing those people into a safe legal market where they know where the product is coming from."

Legalisation's impact

The law change hasn't led to a dramatic behavioural shift on Californian streets, or in bars and restaurants, mainly because it's still illegal to consume the drug in public.

Image caption Daniel Yi from MedMen believes cannabis users can be persuaded to "go legal"

Possession of a small amount for personal use has been permitted since November 2016, and Californians have been able to use cannabis for medical reasons for more than 20 years.

It's too early to judge the impact on crime rates, but Colorado and Washington reported a drop in violent crime after legalising cannabis five years ago.

There is some evidence it has led to a rise in car crashes, and more marijuana-poisoning cases involving young children.

But it has definitely created a new market for entrepreneurs to exploit. The delivery app Eaze recently expanded into Los Angeles, offering a Deliveroo-type service for customers who want marijuana brought to their homes at the tap of a button.

Eaze also produce an annual survey on the state of cannabis consumption. The most recent report claims women are spending more on marijuana products, and that more people are choosing them in place of sleeping pills.

'More jobs'

"Freeway" Ricky Ross made millions as a cocaine dealer in LA in the 1990s. He was jailed for life but later had his sentence shortened on appeal and was freed in 2009.

Image caption Ricky Ross was jailed for dealing cocaine, but is now interested in the legal drugs market

He's now gone straight and insists he feels guilty for his past behaviour: "I saw it bring people down. Cocaine is highly addictive, I've seen people do $3-4,000 in one night."

He's now interested in getting a licence to work in the legal cannabis trade, but believes the high costs are prohibitive for many in the black community who have suffered due to illegal drugs in the past.

"We haven't been part of the money-making end - we have mostly been on the consumption end and we want to change that. I think the industry could definitely bring jobs back to the community.

"There are so many opportunities where you don't even have to touch marijuana - marketing, bookkeeping, clean-up, air conditioning, it just don't stop."

You can hear more on this story with Anna Foster on BBC Radio 5 live at 10:00 BST on Tuesday 29 May.

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