Big Weed (2 page)

I call it the world of Big Weed because it's a whole new way of thinking about a product that was once the scourge of the nation. Marijuana is an ancient plant whose cultivation by humans stretches back at least ten thousand years. But for our purposes, the “Old
World” of marijuana only reaches back to the 1930s, when propaganda films such as
Reefer Madness
tried to scare Americans away from a plant whose use, it was said, would drive them insane and turn them into murderers, prostitutes, or worse. The Old World was the age of President Richard Nixon, who ignored the scientific consensus on this relatively benign plant and instituted a wrongful drug policy that would doom millions of Americans to prison for possession—and is still in effect today. With the stroke of a pen, millions more non-Americans were sentenced to die as a result of drug cartel violence that sprang up to circumvent the American war on drugs. The Old World, then, was a mix of good and bad. On one hand, it was hippies and stoners, psychedelic art, Woodstock, marijuana-leaf posters, and getting high in your parents' basement. On the other, it was also the beginning of untold violence and lost opportunities for the American underclass.

The “New World” of weed is a far cry from all that. It's a world in which private equity firms carefully study the historical financials and business plans of marijuana start-ups to see if they would like to invest a few million dollars of their money on this hot new industry. It's a world in which law-abiding citizens check into pricy bed and breakfasts for the weekend in the Rocky Mountains and legally smoke a joint while relaxing naked in a hot tub. It's a more compassionate world, where chronically or terminally ill patients have access to a natural product that can help safely ameliorate some of the symptoms of their diseases. It's a world where the company that wins the public relations challenge, and sells America its favorite marijuana, has a very real shot at being a lifestyle brand, as big and as warmly embraced as Sam Adams, Apple, or Starbucks.

The industry is about two years away from beginning to see record profits. Imagine if you had been about to buy into the world of gourmet coffee (Starbucks), online retail (Amazon), or personal computers (Apple) two years before these businesses revolutionized the world. Would you have done so? Would you have sat up and
listened to what Howard Schultz, Jeff Bezos, or Steve Jobs had to say?

The New World of marijuana has some monster players too. After all, if marijuana is legal, Big Tobacco will want a piece of the action. So will Big Pharma and Big Agra, companies that will want to study and quantify and possibly patent various elements of this precious plant's genome. In fact, it's already happening.

As I write this, I'm forty-five years old. For years, I went to work in a suit and tie, but these days it's mostly cargo shorts, a comfortable shirt, flip-flops, and my mala beads. And yeah, I smoked marijuana as a kid, and I smoke it now. I'm sorry if that's a problem for you, but it's integral to what I'm about to tell you.

But that's not the whole of my story. In college I got hooked on a different rush—greed, status, and ego—and I ended up channeling it all into business. I did well in whatever businesses I started, like a lot of people who are driven by the same things. I didn't implode the way some folks do, but I came close.

Eventually, my eyes were opened and I saw my greed for what it was: the empty, vain pursuit of a hollow man. These days, after two decades of running different types of businesses, I like to tell people that marijuana has been my salvation. I mean that. The cannabis business appeared on my horizon when I needed it most, when I was at a difficult crossroads in my career, and the business has given me nothing but joy.

What success I had in my earlier businesses was probably due to the fact that I am restlessly creative. Following other people's direction has never worked well for me. I had to find my own way, my own path in business. They call people like me entrepreneurs. Entrepreneurship is what I know, what I do, what I breathe. In fact, it's all I've ever known since the day I graduated college and opened my first company, a string of ice cream shops. I don't make music, paint, or tell stories—my creativity is expressed through business, through
making deals, through working with other people. Entrepreneurship is my creative expression and my passion.

Today, my indoor grow facilities are brimming with tall, beautiful plants. Some of our marijuana strains are seven times more potent than what the hippies smoked in the 1960s. I sell our harvest at our two medical dispensaries in Denver. Green Man Cannabis has twice won the Cannabis Cup, the highest award for excellence in the legal marijuana industry. These days I've gotten comfortable with potential investors asking me if I can send them a business plan. If you think it's strange that a “drug dealer” would be handing out prospectuses, then you've got a lot to learn about the world of legal weed.

As I go about my business every day, a lot of honest, law-abiding people can't help asking me a ton of questions.

“You're in the legal marijuana business?” they say with a grin on their faces. “What's that like?”

This book is my attempt to answer that question.

Because it was one of the first states to legalize marijuana, Colorado makes a nice case study for what will or could be soon happening in a state near you and around the globe in places like Uruguay—which just became the first country in the world to make marijuana completely legal within its borders—and Israel, which is funding serious research into the healing properties of marijuana. I'm going to share how I got into the business and how I turned Green Man Cannabis into the success it is. You'll watch my ups and downs, my outright failures, and you'll get a feel for the pros and cons of the new world.

I hope this book speaks to a lot of different people. But those who'll get the most out of it are people like these:

• entrepreneurs of all stripes who are considering starting any new venture, or who are considering entering the cannabis industry in particular
  
• investors who have heard from their friends, attorneys, and accountants that cannabis is the hot new thing but who are hesitant about parting with their money until they learn more about the industry
  
• middle managers and small business owners who are interested in seeing how someone made the transition from a small business to a multimillion-dollar corporation
  
• employers who are interested in motivating or educating staffers with stories of success
  
• longtime marijuana lovers (and haters) who are intrigued by the big business that has literally grown around this strange little plant
  
• observers who are fascinated by the shift in American society and who are eager to learn more
  

For all its seeming sophistication, the industry is also in a bit of a Wild West phase right now. On one hand, you've got entrepreneurs like me who are racing to establish market share. On the other hand, you've got cops, judges, and state regulators who are trying to figure out what legal marijuana means for their hallowed institutions. How do we decide case law? How do we regulate it? And the fact that it's still a federal crime to grow and sell marijuana has huge implications beyond my inability to carry a corporate checkbook.

Though most of my business dealings are privileged information, I will take you inside some of my meetings and conference calls to show you how it all goes down. You will meet a bizarre cast of characters in this book. For every Wall Street suit who's dreaming of a piece of the big old marijuana brownie, there's a colorful millionaire—a captain of industry or hip-hop star or an athlete—who is ringing my phone off the hook, wanting to invest in this burgeoning trade.

But the way I see it, the real heroes of this story are
money
and the American public.

Why do I say that? Look at it this way: When I was a kid, you could gamble legally in only two places in the United States: Atlantic City and the state of Nevada. Today you can enjoy a casino experience in twenty states in the country, and some form of gambling—racetracks, lotteries, scratch-off cards—are found in forty-eight U.S. states. Why? Money. As much as the powers that be hated vice, they hated losing potential tax revenue more.

Here's where the American public comes in. Consumers changed the history in the past simply by broadening their minds. In the 1930s, Americans toppled Prohibition. And they gradually let their lawmakers know that they were open to the idea of legalized gambling. The legislators listened. They
had
to.

Well, today we're in the same position with marijuana. The citizens of the United States were once content to believe what the federal government told them about the evils of marijuana. Now that they're older, wiser, and have a few tokes under their belts, voters are less likely to be snowed. They know in their guts that the drug policies of the past forty years have failed massively and that it just might be time for their nation to try something new. Every time a voter hears someone—a politician, an activist, or some other naysayer—rail against marijuana, the voter is likely to think “Well, I smoked marijuana a couple of times, and nothing bad happened. I didn't get hooked on cocaine. I hold down a decent job. I make decent money. I have a house, a mortgage, and kids. Ergo, methinks you're full of shit.”

Think about that: The thing that was once so evil is now being regarded as something responsible adults can enjoy, just the way they occasionally smoke, drink, or gamble.

For decades, marijuana was in the hands of an underground culture—stereotyped as hippies and stoners—but it's now shifting into the hands of mainstream America.

What's that mean? For one thing, it means that the
story
of marijuana in the twenty-first century will be told by people like me.

Sit down, light up a joint, and let me tell you about my world.

1

Brave New World

It all started the way a lot of businesses begin—on the golf course.

The year was 2009, and I was between jobs. My attorney and good friend thought it might be a good idea for me to meet a client of his. He invited us to come play at the Red Rocks Country Club, one of the nicer country clubs in Denver, nestled in the same geologic formation as the iconic Red Rocks Amphitheatre.

The guy I met, Jake, was a stocky Latino, with the build of a boxer.

“What kind of business are you in?” I said.

“You'll like this,” my lawyer said, with a smile on his face.

“Marijuana,” Jake said. “Legal, medical marijuana.”

Oh yeah, I thought. I'd heard something about it, only in the vaguest way. I was a citizen of Colorado. I read the papers. I watched TV. And I knew what the average citizen knew: Voters had approved a law allowing medical marijuana back in 2000. Since then, the cannabis industry had risen from home growers cultivating a few plants on behalf of a few patients to a small number of professional dispensaries scattered throughout the state. But that was about all I knew. I had never set foot in one of those places. I knew nothing about the
business. I was a businessman with a wife and three kids. And when medical marijuana was in its infancy, I was busy running a real estate enterprise.

That said, I also was no angel. When I wanted to get high—and I did, from time to time—I bought my weed the old-fashioned way. From a buddy.

“As a matter of fact, gentlemen,” I said, rooting around in one of the pockets of my golf bag, “I have some on me right now.”

With a flourish, I whipped out a wooden “one-hitter,” a small wooden box that had both a small metal pipe and a small storage area that contained some ancient street weed. I had no idea when I'd bought this marijuana or how long it had lain hidden in the confines of my bag. I was just foolishly proud of the fact that I had it. Like I was some cool businessman living on the edge. Counterculture and proud.

Well, Jake took one look at that shit and shook his head. “Check
this
out.”

He produced his own Ziploc bag and handed it over.

My God, there was no comparison. My weed was nearly black with age and smelled like the ass of a mummified skunk.

Jake's weed consisted of plump, sticky buds that were bright green and shot through with fine tendrils of floral color. They looked exactly like what they were: the flowers of a beautiful, generous plant.

“Where did you get this?” I said.
I needed to know his guy!

Jake just laughed.

I looked over my shoulder to be sure we were alone. On a weekday in summer, a golf course can be one of the most deserted places on the planet.

“Can we smoke this here?” Jake asked my attorney.

Well, we did, and we were still smoking when we got to the seventeenth hole, and let me tell you: Oh, wow. The beautiful view from the seventeenth hole at Red Rocks County Club just became that much more spectacular. Looking down the fairway as it disappeared
out of sight, the tall buildings of downtown Denver seemed to be just beyond the hole.

Holy shit.

The second I took that first puff, my mind expanded. And I don't mean that in the woo-woo, New Agey sense. I mean it in the practical sense.

One puff, and I knew.

I could smell, feel, and taste the difference between the street weed I'd smoked as a kid and the prime stuff lovingly created by someone who knew what he was doing.

It was like night and day.

Like the difference between that $8.99 cabernet sauvignon you tossed in your shopping cart at the supermarket because you needed some wine, any wine, tonight with dinner and that amazing bottle the sommelier brought to your table last year when you wanted something special for your anniversary.

Like the difference between a hastily gobbled Snickers bar and a nibble of an artisanal bar of hand-crafted chocolate with 70 percent cocoa content.

Like the difference between Coors Light on a hot summer's day and a microbrew crafted with the freshest hops possible and a few other things you didn't even know you could put in beer.

Like that.

Holy shit, I thought. I've been smoking ditch weed all my life.

“You should stop by,” Jake said. “We can help you get your red card.”

I didn't even know what that meant.

Maybe you're like me. When I get excited, I start thinking about possibilities. Opportunities. Implications. It took me all of ten minutes to go from a guy falling in love with what was getting him high to a business guy with some pretty obvious questions.

“What's it cost to grow?”

Jake squinted as he lined up his shot. “Um, it varies.”

“Well, what's your margin?” He looked quizzical. “Your profit,” I said, trying to make myself clearer. “The difference between what it costs you to grow and what you sell it for. That tells you how much profit you're gonna make.”

“Well . . . I don't know exactly, but the business has been great so far.”

I looked at my attorney.

He smiled.

Jake was a nice guy. Medical weed was only his most recent endeavor. He had started a franchise restaurant, made it successful and sold it off, so he knew a good bit about business. And he knew a lot about weed. He had learned how to run somebody else's business, but was he up to the challenge of creating something out of nothing? That is an entirely different skill set. It also happened to be
my
skill set.

Jake, incidentally, has come a long way. As I write this, he and I are the respective chief executive officers of two of Colorado's largest legal marijuana companies. We see each other occasionally at industry events and recently we met with the governor of Colorado together. But that day on the golf course, he needed some help, so I agreed to do a brief consulting gig with his firm.

In that moment, though, before my buzz dissipated, I saw an entirely different business in my mind's eye. I saw it as if it had already been built. They say that Michelangelo saw David inside that marble slab and only had to help the statue find its full expression. That's how I felt when I realized what a great marijuana company could be like.

A few days later, I was sitting in the office of a physician who worked in Colorado's growing medical marijuana trade.

If you wanted to buy medical marijuana in the state of Colorado, you needed to have a red card—official proof that you had jumped through all the hoops. Doctors didn't write “prescriptions” for the stuff, they wrote “recommendations.”

The doctor Jake hooked me up with was in his eighties. Kind eyes. Fuzzy gray hair loping over the tops of his ears. “So what's troubling you?”

Where do I start? The poor doc didn't have enough time in the day to hear it all. Did he really want to hear how I'd lost my company more than a year ago when the market crashed? Did he really want to hear how I'd almost brought home a seven-figure payday—and then didn't?

“Anxiety,” I said, hitting upon a diagnosis he could probably use. “I have trouble sleeping. Been through a tough time lately. Does anxiety work?”

“No,” he said. “It has to be one of the six qualifying conditions approved by the state, a
physical
ailment that the marijuana can help you treat.”

That was marijuana's gift to the world, its raison d'être in the new medical marketplace. While the rest of us prized it for its ability to get us high, there were people living with chronic illness—cancer patients, AIDS patients, to name a few—who wanted marijuana for its ability to extinguish pain, stimulate appetite, and banish nausea.

Wait. Back in my youth I'd suffered an injury in a snowboarding accident and compressed a thoracic vertebrae in my back. The injury still bugged me. So much so that I used an inversion table to hang myself upside down from time to time. Stretching myself out was one of the only ways I'd found to chase the pain and numbness away.

“That'll do,” the doctor said.

He initiated the paperwork and helped me fill out the state application. I stepped outside to get it notarized by someone in his office. Next, I needed to stop by the post office and mail it in to the state via
registered mail. But I could walk out of the doctor's office right now and buy up to 2 ounces of weed per visit.

It sounded too good to be true. In fact, a lot of habitual marijuana users thought so, too. That's why they stuck with buying their weed off the street.

As I was about to leave, I lingered in the doctor's office. I have a soft spot in my heart for docs. My dad was a former U.S. Navy flight surgeon. In December 1968, he soloed for the first time, earning his wings. The very next day, he delivered me at the hospital at the Naval Air Station in Pensacola, Florida. I grew up all over the United States—North Carolina, Washington, California, and finally Colorado. Ours was an interesting childhood, to say the least, but a distinctly middle-class one. The thought of an elderly doctor willing to write recommendations for marijuana struck me as odd.

“If you don't mind my asking,” I said, “why do you do this?”

He shrugged and gave me another smile. “I always thought marijuana was harmless. I'm glad I'm able to finally do this for people.”