AUBURN, Wash. — Steve DeAngelo, a California businessman, had a clear message for the crowd of fellow marijuana entrepreneurs gathered at a racetrack outside Seattle. Up to 700 of them had come together this week for a convention to network, workshop and talk about the current state of America's "cannabusiness," and DeAngelo was triumphant. "We've just begun to win," he told the rapt crowd of those working in America's now booming market for a plant whose use was illegal for decades and associated more with students, hippies and stoners than business plans, bank loans and branding. It is hard to argue with DeAngelo's prognosis. The National Marijuana Business Conference & Expo was completely sold out. Medical marijuana is now legal in 20 states and the District of Columbia, and an entire industry has sprung up to supply and support patients in those regions. Now, with Washington state and Colorado poised to sell legal marijuana to adult recreational users in 2014, the opportunity for business growth is akin to the California gold rush, advocates say. More than $1.4 billion of legal marijuana will be sold this year in the U.S. — with predictions of $2.3 billion next year. Yet those numbers don't even include the business-to-business industries that were gathered at the conference. "In one year, cannabis has gone from alleys and illicit sales to become the fastest-growing industry in the nation," DeAngelo said.

'Magnifying glass on us'

DeAngelo, a pioneer and national leader in the industry, whose Harborside Health Centers in California have influenced cannabusiness worldwide, preached a business model of squeaky-clean practices, ethical responsibility, political involvement and community building. He suggested that marijuana owners live their lives as if they could be on the front page of their local newspaper. "We are going to have a magnifying glass on us for the foreseeable future," he said. The conference sessions echoed that sentiment, with speakers touching on regulation and legislation, building relationships with lawmakers, responsible business practices and avoiding raids, audits and injunctions. In addition to big-picture topics facing the industry, instructional sessions on running or selling to dispensaries rounded out the schedule. The possibility to establish marijuana businesses’ legitimacy has attracted a variety of seemingly buttoned-up industries that attendees said were largely absent from the inaugural event in Colorado last year. CannaBusiness Media, the organization hosting the event, said this year's conference is double the size of last year's, and it expects the gathering to double again for next year's event, to be held in America’s glitzy capital of the convention circuit: Las Vegas.

Marijuana laws have been liberalized in many states. David McNew/Getty Images The expo floor resembled a melting pot of above-ground business far from the illicit roots of the marijuana industry. Accountants jockeyed for position between inventory tracking systems, container manufacturers and companies that produce software for encrypting and storing patient data at clinics. MJ Freeway, marketed as "business solutions from seed to sale," offered a suite of tracking software for marijuana producers, processors and product manufacturers, as well as dispensaries and retailers. Unlike some attendees who have adapted existing businesses to work for the marijuana market, MJ Freeway created its products specifically for the industry. Amy Poinsett, MJ Freeway’s chief executive, said she and her co-founder, Jessica Billingsley, saw a space in the industry for inventory control and point-of-sale systems. Neither previously worked with cannabis; Poinsett had a Web development business, and Billingsley had an IT business. The duo formed a new company to tap into the booming marijuana industry and help people struggling with its plethora of red tape. "I really believe in cannabis as a medicine," said Poinsett. "There is a need to bring technology to meet the highly regulated requirements of this business. Most people in this business have not been in a highly regulated industry before." Billingsley said their biggest challenge has been keeping up with the regulatory requirements for each state. She said the industry is seeing a controlled expansion while states are added to the legalization roster. "It's very good for people to see the industry being run conservatively and aboveboard," she said. The attendees appeared to have taken this suggestion to heart. The vast majority of those milling around the expo were in suits or casual business attire. There was little sign of any tie-dyed, counterculture feel. Also, most attendees were male and white.

It's very good for people to see the industry being run conservatively and aboveboard.

"We're one of the few women-owned businesses in this industry," said Poinsett, explaining her theory that "women are more risk-averse and this industry has come from a black market background." But she said more professional women are joining in as they see a stable regulatory model. Risk-averse customers are also expected to join in as legal recreational use expands and retail locations open. As the industry moves mainstream, the demands from consumers have grown and will continue to grow, according to DeAngelo. He said customers now want childproof containers, quality and safety control, and clear labeling of potency from brands they can trust.

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