Two words from Washington, DC scorched James Lee’s pot payday.
With eight states now declaring marijuana legal for recreational use, Lee, a Virginia entrepreneur, launched plans to charter a cruise ship this October for a “cannabis cruise” that would help businesses learn how to cash in on the legal-marijuana industry, which by some estimates could mushroom from $6 billion in annual spending now to $50 billion by 2026. By mid-February, Lee had recruited sponsors and participants for the trip, lined up investors willing to commit $7.5 million to finance the venture, and outlined a contract with Royal Caribbean to charter a ship for the weeklong round-trip between Miami and Jamaica.
Then Sean Spicer spoke. On Feb. 23, the White House press secretary said the Trump Administration was considering “greater enforcement” of federal laws regarding marijuana than President Obama had pursued, portending a big change for the legal-weed industry. Weed is officially a controlled substance banned by federal law, which supercedes state law. As states such as Colorado, Washington and Massachusetts began to declare pot legal during the last few years, Obama signaled he’d look the other way and essentially decline to enforce federal law on the matter. But President Trump, who doesn’t smoke or drink, ran on a law-and-order theme, and his attorney general, Jeff Sessions, is firmly opposed to legal marijuana. They’d be legally justified in cracking down on growers, sellers and users in the so-called legal states.
Spicer’s comment spooked the cannabis cruisers. “The comments didn’t go into much detail,” Lee tells Yahoo Finance, “but it was enough to scare anybody. Companies and sponsors that were going to be participating didn’t want to put themselves out there any more.” With participants fleeing, Lee’s investors pulled out as well. That was enough to sink the cannabis cruise. Lee says it will cost him “millions” in forgone income.
Lee voted for Trump in November, hoping he’d apply the deregulatory bent he has expressed toward other businesses to the legal-marijuana industry, and yank the government out of the way of private-sector profits. “I definitely understood from the beginning that he is what we would call straight-edge,” says Lee. “I think they’re still going with the reefer-madness theory that was bred into them at a young age.”
After canceling the cruise, Lee sent a letter to Trump at the White House, arguing that legalizing marijuana would shift $40 billion in annual spending from criminal syndicates to the regulated economy, increasing tax revenue for governments. So far, no response. But Lee isn’t bitter. He plans to stay in the marijuana business, focusing on offshoot products such as hemp that are closer to becoming mainstream. He’s sticking with Trump too, saying he’d vote for him again.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman