Legalization is bringing money and innovation into the cannabis business in Colorado.

DENVER — The legalization of recreational marijuana sales in Colorado is turning an underground industry into a big business — and ushering in innovations in everything from genetics to growing methods.

The burgeoning cannabis industry is coming out of illegal basement grow rooms and into sprawling warehouses befitting ravenous consumer demand. The result is that industry leaders are experimenting with new setups, lighting and growing methods more commonly seen in commercial agriculture. Longtime growers are even pulling in new talent with résumés featuring university professorships and stints at NASA.

"Every single day, someone is reinventing the wheel, so to speak," said Scott Reach, a cannabis breeder and owner of the Colorado-based seed company Rare Dankness.

This 4/20 weekend, businessmen like Reach will be setting up shop in downtown Denver for the Official 420 Rally, a celebration of all things weed that's expected to be the largest in the city's history. [Trippy Tales: The History of 8 Hallucinogens]

The emergence of legal weed

Medicinal use of marijuana has been legal under Colorado state law since 2000, when voters approved an amendment to the state constitution allowing cannabis possession and use with a doctor's order. In 2012, state voters again loosened the prohibition on marijuana with Amendment 64, which allows personal use of marijuana for adults age 21 and older. Smoking or other methods of consuming marijuana in public are not allowed under the law.

Marijuana is still illegal under federal law, which makes banking and investments a challenge for "ganjapreneurs" in Colorado. Nevertheless, the money and interest are flowing in.

In Denver alone, 4.5 million square feet (41,800 square meters) of warehouse space is devoted to growing pot, said Kayvan Khalatbari, co-founder of Denver Relief Consulting, a medical marijuana center. All those indoor growing facilities need lighting. Denver Relief just hired a former NASA scientist, Neil Yorio, who worked on lighting technology for long-duration space missions, to develop new options for marijuana growers.

The company has been experimenting with LED lighting, Khalatbari told Live Science. Traditional LED lights lack the ultraviolet rays plants need to thrive, he said, but new bulbs do a better job of mimicking the sun. The lights use less electricity and put out less heat than traditional grow lamps, which saves on cooling costs.

"We're using 40 percent less electricity to get the same results," Khalatbari said.

Lights are a major area of change in the new legal growing operations, said Denver Relief co-founder Nick Hice. And experimentation is common.

"If you go to six warehouses downtown, you might find six different growing set-ups," Hice told Live Science.

Legal innovation

Hice expects the innovation surrounding marijuana to translate to other cash crops, given the interest in urban, indoor growing. But Colorado pot farmers are looking to move out of warehouses. The next trend, industry insiders agree, will be pot greenhouses.

"A lot of growers are going to be moving to greenhouses in this industry in the next few years," Hice said.

And that switch will challenge growers to come up with new innovations once again. Greenhouses will still need supplemental light, Khalatbari said, and LEDs, with their direct beams, have never been well suited for greenhouse growing. However, research suggests that LEDs can be adapted to provide the more diffuse light needed in greenhouses, Khalatbari said.

Meanwhile, other researchers are digging into the cannabis genome. Canadian researchers mapped the genome of the common strain Cannabis sativa in 2011. Now, the Cannabis Genomic Research Initiative, led by ecologist Nolan Kane of the University of Colorado at Boulder, seeks to sample DNA from multiple cannabis species.

Pot's future

This genetic innovation has some cannabis users and growers concerned. As big business moves in, they worry that agricultural companies will create genetically modified plants and patent them, perhaps pushing out smaller growers. Patented seeds represent a hot topic in agriculture, because they are sold under the agreement that farmers will not save and replant seeds from the resulting plants. Companies like seed producer Monsanto sometimes sue farmers who violate these agreements. Growers also worry that if their plants unintentionally cross-pollinate with a patented plant, they'll be held responsible and sued.

Anti-GMO activists also raise concerns about the potential health dangers of consuming genetically modified organisms. [5 Pot Facts for 4/20]

"I hear that all the time," Reach said. "People come to me and say, 'Are you guys ever going to go GMO?'"

(Scientific agencies, including the American Association for the Advancement of Science, have found no evidence of danger from consuming GMO foods, but these reassurances have not quelled the controversy.)

Reach said he suspects GMO pot will happen, though "how readily or how fast that is going to occur, who knows." Nonetheless, companies such as Monsanto are unlikely to get into the pot business while the drug is still federally illegal.

A more immediate issue is the sale and regulation of marijuana concentrates, which extract the active ingredients of the plant with solvents such as butane. The most potent plants top out at a concentration of 29 percent THC, or tetrahydrocannabinol, the mind-altering compound in marijuana, Khalatbari said. Concentrates can have levels of 85 percent to 95 percent THC.

"It's essentially like smoking a joint without smoking, in one hit," Khalatbari said.

In multiple cases, at-home wanna-be chemists have blown up their homes trying to extract cannabis concentrates themselves. It's not legal to make concentrates at home in Colorado, but businesses can set up licensed labs to extract the concentrated oils for retail sale, Reach said.

These extracts may be a new horizon, given that smoking a joint still holds some stigma. Developers are coming up with pot patches, marijuana e-cigarettes, oral strips, tinctures and topical creams, Khalatbari said.

"We're seeing a huge increase in different consumption methods," he said.

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