Though US states are legalizing marijuana, individual municipalities are severely limiting the number of shops that can be set up within their city limits. Seattle, for example, has received several hundred applications for vendor permits, but it only allows twenty-one shops within city limits. 
The entire state only allows two million square feet –approximately forty-six acres– for commercial marijuana farming.
In short, there are more sellers than there is space to sell, and a limited supply those sellers that have set up shop. Therein lies the opportunity: home growing.
Colorado’s Amendment 64 allows home-grown marijuana to the tune of six plants per adult. Each individual over 21 years of age may have three mature and three immature plants kept in a privately owned, locked, enclosed space. This appeals to a wide variety of people: consumers who live in areas without dispensaries, users who wish to keep their consumption private, or those who wish to create their own blends.
The demand for indoor growing equipment can only be expected to increase as more states legalize the drug. Of particular interest is the demographic that wishes to grow their own style of plant. People will be interested in blending sativas and indicas, using exotic soil additives, and experimenting with styles of grow lighting.
Flavors, smells, and potencies will become an art to “craft growers.”
Home-brewing as a template for success.
If home-brewed beer is any indicator, there is money to be made from the do-it-yourself crowd. The American Homebrewers Association estimates that over 1 million Americans brew their own beer every year. The number of home brewers is growing at a reported rate of twenty percent every year, for the past five years, with pronounced growth in the “Generation Y” age group. Brewers invest in equipment and spend their time blending different flavors and ratios of ingredients.
There are few publicly traded suppliers of home brew gear, but the Craft Brewer’s Alliance (BREW) stock has been steadily going up for the past five years. The most popular kits are either independently manufactured and distributed, or owned by retail chains such as Bed, Bath, and Beyond.
The demand is there for decentralized, do it yourself intoxicants, and marijuana-specific companies are letting you participate.
Investment Opportunities
The same Generation Y that does the majority of home brewing of beer is also the largest demographic of adult frequent marijuana users. Twenty- and thirty-somethings are the most likely to create their own custom blends as legalization spreads across the country.
There are a handful of tiny companies that provide hydroponic equipment, grow lights, and fertilizer for home grow operations. The largest recreational marijuana companies are growing and acquiring more territories as laws become friendlier to their businesses.
- Fusion Pharm Inc. (OTC: FSPM) owns PharmPods, which are hydroponic growing kits with the slogan “just plug-n-grow.” They offer systems to the public, as well as to retailers and other groups.
- GreenGro Technologies, Inc. (OTC: GRNH) is a leading supplier of hydroponics and indoor grow systems for home use. Their vertical systems are particularly of interest to those who wish to grow in very small spaces.
- Growlife Inc. (OTC: PHOT) has a hand in many aspects of the growing marijuana industry. They own Rocky Mountain Hydroponics and Organics; a hydroponic outlet store, Phototron; an established producer of home grow kits, and Stealth Grow; producer of LEDs for indoor growing. They also own cannabis.org, which they use as a “lifestyle company” to promote their physical products.
Colorado and Washington are only the beginning. Portland, Maine has legalized recreational usage, but not opened up shops. Alaska is well on it’s way to becoming the third full state to legalize the recreational use of marijuana, with a signed initiative that will put the issue to vote in the next election. Oregon, Arizona, Maine, Massachusetts, Montana, and Nevada all have plans to vote on recreational usage for 2016.
Home-grow technology will continue to expand and make gains as legalization spreads across the country.
