What Does Prop 19 Mean for Small-Time Growers?

Proposition 19, the initiative that would legalize up to an ounce of marijuana, has attracted a lot of surprising supporters in its journey to the ballot. Billionaires, like George Soros and Facebook’s Dustin Moskovitz have spoken out in favor of it as have unlikely interest groups like Parents for Addiction Treatment and Healing. One group that’s not singing the praises of the measure, which will be voted on today, are marijuana growers in Mendocino and Humboldt counties. While growers would seem unlikely candidates for opposition, many fear that legalization has the potential to eradicate small operations and replace them with larger ones that are more cost effective.

Whether their anxiety that Northern California’s marijuana growth business will shift to Central Valley’s larger, more productive compound is legitimate is still in question. Even if Proposition 19 does go through today, clashing Federal and local law would still serve as a threat for massive grow operations.

Tom Angell, a spokesman for the Yes on 19 campaign believes that will be reason enough for companies to avoid establishing large operations for the time being.

"There won't be a big Phillip Morris-type organization setting up shop until federal policy changes," he says and maybe he’s right.

But there’s also a chance that he’s wrong or at least has never heard of USCANNABIS INC. (LLUX). The company is essentially a more multi-faceted Phillip Morris enterprise that has plans to manage marijuana distribution from all angles, and that includes growing.

USCannabis Inc. intends to supervise their product, marijuana, very literally from the ground up, but the company is no mom and pop operation. CannaGrow Inc., one section of their eight pronged operation, plans to grow 5,000 plants at every single one of the 80 centers they hope to build by 2013. What’s more is that they plan to develop the most sophisticated grow rooms in the United States, and since acquiring weedmaps.com, a pot YELP of sorts, which is slated to bring in $4 million in gross revenue by the close of the year, they are building the capital to do that.

Of course there’s still the threate of Federal persecution at hand, but to ignore the possibility of huge corporate operations usurping smaller growers on a longer time-line would be an oversight for those considering the effects of Prop 19.