A Trump presidency unnerves cannabis manufacturers. Is it time to change tactics?

By Bart Taylor | Nov 13, 2016

Speculation about the impact of a Trump presidency on U.S. manufacturing has developed along familiar lines, much in keeping with America's split-personality on the sector. Last week, media surmised that robots will thwart Trumps effort to reshore jobs at the same time his election may discourage the migration of businesses offshore. Midwest manufacturers are "wary of Trump's free-trade stance" even as the Wall Street Journal reports that manufacturers are mixed on the prospect of a Donald Trump presidency in part because of his 'protectionist' rhetoric. So it goes.

Uncertainty and Trump also seem to go together. But here's what we know: Candidate Trump ran on restoring U.S. manufacturing. And won. The prospects for American manufacturing appear bright.

Colorado's cannabis manufacturers are probably less assured. Uncertainty has been a constant companion and today, the industry faces the prospect of a Rudy Giuliani or Ted Cruz-led Department of Justice, both of whom have been outspoken in opposing legalization.

I reached out to several of Colorado's leading cannabis manufacturers to assess what steps industry and elected officials might take to insulate business here from a change-of-opinion at DOJ. The popular sentiment is to continue a 'wait-and-see' approach, that with all that's happening within a new administration, the difficulties involved with unwinding the current hands-off approach and the vote to legalize in four additional states, the rules of engagement shouldn't change.

Leaving the prospects of a billion-dollar Colorado industry to chance may be the right approach. It's reasonable to let things play out. But should cannabis leaders and officials elected by the same voters who legalized pot also set in motion a full-throated defense of the industry?

Advocates would do well to publicize the positive impact of legal marijuana on conventional business in the state. They could start with manufacturing.

As President-elect Trump probably understands, creating new manufacturing jobs will pivot on the development of a new domestic supply chain more than legislation that will penalize companies who locate elsewhere, favored Trump campaign rhetoric.

Technician at Boulder's CBDRx

It's no different here and in Colorado, cannabis farming and production is supporting a wave of new supply-chain companies whose products and services bleed into conventional economy: production supplies including organic soils, lighting hardware, and systems automation; packaging, labeling, and printing including plastic products and fabrication services. Architects and builders are contemplating new facilities. A transportation and logistics network today supports increasingly advanced solutions to bring the industry's products to market. It's a long list and getting longer.

Also important is the growing number of capital providers migrating to Colorado and other states with legal marijuana to fund the cannabis industry. Small business requires capital and business services that incubate early-stage companies. Cannabis manufacturing is driving money and expertise into the early-stage ecosystem here and alongside the influx of dollars funding Boulder's surge in natural food and statewide momentum in craft beverages and other specialized early-stage manufacturing, it's easy to envision Colorado becoming a financing hub for light manufacturing. Cannabis is a catalyst.

The impact on the labor supply is more mixed. Cannabis complicates efforts of conventional manufacturers in what is already a difficult labor market.

But the jobs paradox that afflicts manufacturing nationally is also at work here: Companies lament a lack of qualified workers, yet point to the loss of manufacturing jobs offshore, or to robots, as the real challenge. Colorado's manufacturing leaders seem hard at work fixing the workforce challenge. The 'cannabis contribution' to new job creation shouldn't be overlooked.

It still may be a bridge to far for some, but business and policy leaders looking closely will determine that Colorado's cannabis experiment is today an engine of conventional economic growth.

A rationale to which President-elect Trump can relate.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.


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