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Editorial: Potential pot fortunes lie in equipment, legal suppliers

As anyone wearing a pair of Levi’s should know, the durable fortunes made in the California gold rush of the mid-1800s were pocketed by the men who provided the jeans, shovels and other supplies the Forty-Niners needed to peck nuggets out of the hillsides and streambeds.

Cornelius Vanderbilt of railroading fame first built his fortune with steamships carrying the gold-struck from places like New York down to Nicaragua, where others ships ferried them up to California.

So it may well be with the green rush; the seeming riches possible from the cultivation and sale of marijuana in Washington. More than 1,100 would-be growers have filed applications with the state. Hundreds more want to process or retail the stuff. Although the Washington Liquor Control Board, which oversees the emerging industry, has weighted the system to favor small operators, many of these entrepreneurs will not have everything they need to set up shop or a growing operation.

Enter companies like Arbormain and its parent company, Privateer Holdings, which are the budding Levis and Vanderbilts of today.

Arbormain plans to make three empty West Plains warehouses into a home for small growers. Arbormain could supply lights, water and security, and the growers sign a lease and take care of cultivation.

Arbormain and similar businesses can also identify the communities that will accept large growing operations, and the windfall tax revenue that will come with them. Airway Heights could benefit substantially if Arbormain invests a potential $5 million in improvements, and hosts as many as 40 workers.

But the outcome of Washington’s experiment with legalized marijuana, as well as the one in Colorado, where the wraps come off Wednesday, still depends on the forbearance of the U.S. Department of Justice, and the finessing of proscriptions against financial institutions’ handling of funds with known connections to drugs.

The two states may be willing domiciles for the marijuana business, but federal law supersedes state, and everyone growing, processing or selling the stuff may run the risk of a post-2017 administration that will not tolerate the sale of a drug the law foolishly equates with heroin.

Privateer Holdings, its subsidiaries, and other such companies are doing something else for their clients: aggregating and assuming risk.

By taking responsibility for warehousing grower operations, or offering online services – whatever these new business men and women would not have the scale to do themselves – they will have invested the millions of dollars potentially subject to seizure. Losing a room full of plants would be painful, losing the room much worse.

As the dawn of legalization approaches, and those chosen to participate prepare, the pretenders will be separated from the Privateers. We have supported legalization, but wonder if the industry will look as it was envisioned in five years.

With all that will be at stake, there will be nothing laid-back about it.

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