Mike_Pence_&_Jeff_Sessions_(29299670541)My cannabis clients are all over the map with how they are reacting to Donald Trump’s election victory and his subsequent naming of Jeff Sessions as the presumptive nominee for Attorney General. Some of them are absolutely confident that marijuana legalization momentum cannot be slowed, much less halted. Others are much more cautious and are concerned that the political climate may have terrible effects on their cannabis businesses. The majority, however, are not really engaging directly with the issue. They are doing business as usual as they wait to see if major changes are in order on the federal policy side.

But even for those that aren’t sure yet what is going to happen, business is full of small gambles. We have clients right now that don’t know if they should move forward and buy another piece of equipment or expand into a larger facility because they don’t know if they will be able to get their money back. If Jeff Sessions is as scary to the cannabis industry as his prior public statements would support, then every dollar invested into a marijuana business right now is a dollar that may not be recouped. There is a real risk here.

But with that risk comes opportunity. One of the great fears for small marijuana entrepreneurs has been that large businesses will squeeze them out as soon as they get the chance. But big business will never make that move so long as the legal climate for marijuana remains as risky as it is. If Hillary Clinton had been elected, the long, slow march toward overall legalization may not have accelerated, but it also wasn’t going to slow down or stop. With Trump, I would be surprised to see any major moves into the marijuana industry by large businesses any time soon. Small businesses can be flexible in an uncertain landscape, but large businesses abhor uncertainty. They are simply too slow-moving and have too much internal inertia to be able to react well in a legal climate where it feels like policy changes by the week.

So, small businesses retain their advantage. This isn’t to say that marijuana businesses won’t or can’t grow. It is saying that, at least for the foreseeable future, most of the growth in marijuana businesses is likely to be organic — from businesses that started in the industry. The idea that Philip Morris or Pfizer or Monsanto are going to come in and throw money at the marijuana industry and run everyone else out of business is dead in the short term because those massive businesses have so much to lose. The Trump effect will keep them out, whereas they would probably have been more likely to get involved in different circumstances.

American-style capitalism has a way of quickly generating enterprises that fill whatever void is created by government policy, or lack thereof, and this holds true for cannabis as well. No matter what the administration does, cannabis businesses, both legal and illegal, will adapt. Any move that keeps big business away from marijuana will simply allow smaller state-legal actors and black market actors to play a stronger role. Federal cannabis policies moving forward will not determine whether there is a marijuana market — that is set in stone — but they will determine which players are most advantaged.