MJ News for 01/08/2015

[7greeneyes]

http://www.cbsnews.com/news/founders-fund-to-invest-multimillions-in-marijuana/

$2 billion company betting big on marijuana​

Until now, it's been a few rich individuals who secretly funded burgeoning pot companies, but for the first time, a major investment firm is going to put multimillion dollars behind marijuana.

It's a partnership between two investors and the first institutional investments in pot, reports CBS News correspondent Anthony Mason.

Geoff Lewis's firm, Founders Fund, a $2 billion company, made its name investing early in new companies like Facebook, Spotify and SpaceX. But now it's betting on pot.

"We discuss all our investments for a long time. ...So particularly in this case, we did an extra, extra deep dive on the business," Lewis said.

The business is recreational marijuana, now legal in four states. Medicinal marijuana is legal in more than 20.

Privateers Holdings CEO Brendan Kennedy said it is a watershed moment.

"It's important for our company, but it's also important for the entire industry," Kennedy said.

Privateers Holdings is the parent company of three cannabis brands: Tilray, which grows marijuana in Canada; Leafly, an online database of different pot strains and stores; and Marley Natural, from the family of reggae star Bob Marley, which aims to become the "Marlboro of marijuana."

Kennedy faced challenges along the way.

"Raising money is always difficult, but raising money in this particular industry is the hardest thing I've ever done," he said. But Founders Fund is backing Kennedy's companies because it sees a future in what they says is already a $40 billion business in the U.S.

"One of our fundamental beliefs is anyone who wants to consume cannabis is already consuming it," Kennedy said.

"We will see it transition, transform from being a market that's based on prohibition and an illicit market to being a fully open, fully transparent market. And that's the opportunity," Kennedy added.

"The surest way of doubling your money investing in cannabis stocks is to fold it back over and put it in your pocket," UCLA professor Mark Klieman warned.

Klieman studies the cannabis marketplace and cautions: investors beware.

"A lot of people are crowding into the marijuana industry because they think they are going to be able to sell a legal good at illegal prices," Klieman said. "Competition's not going to allow that. Legal cannabis is going to be dirt cheap, and I think a lot of people are going to lose their shirts trying to sell it."

That is, if they don't get arrested first. Under federal law, marijuana is still illegal. While the Justice Department has said it won't prosecute cannabis companies following state laws, that could change.

Kennedy said he doesn't see a risk, however.

"Over 80 percent of Americans believe the medical cannabis should be legal, 8 out of 10; you can't get 8 out of 10 American's to agree on anything," Kennedy said.

Lewis said this isn't a politically motivated investment.

"We're investing because we think it's a great business," he noted.

Both Lewis and Kennedy believe marijuana will be fully legal in the U.S. within a decade. As of now, there are no numbers on how many businesses have already started, or how many jobs have been created, but many experts agree the marijuana market could become a $150 billion to $200 billion market worldwide.

 

[7greeneyes]

http://www.denverpost.com/news/ci_2...question-marijuana-hash-oil-legality-colorado

Judge weighs question of marijuana hash oil legality in Colorado​

A court hearing Wednesday to determine the legal status of marijuana hash oil in post-legalization Colorado resulted in the judge turning up his hands and shrugging his shoulders in exasperation.

The hearing in Denver District Court was to decide whether a man named Paul Mannaioni, who was one of three people charged after an explosion at a southwest Denver warehouse, can be prosecuted for the crime of manufacturing marijuana concentrate. The man's attorney, Rob Corry, who helped write Colorado's marijuana-legalization law, said Mannaioni can't be charged because Colorado's constitution now protects the personal possession of marijuana and the processing of marijuana plants.

"The court system is not to be used for marijuana regulation anymore," Corry said.

The Colorado attorney general argues Mannaioni can be charged because — by virtue of a curiously placed comma in Amendment 64, the legalization measure — the protection for marijuana does not cover cannabis "oil," like hash oil. The measure says its definition for marijuana, "does not include industrial hemp, nor does it include fiber produced from the stalks, oil, or cake made from the seeds of the plant. ... "

The attorney general's office, which weighed in on Mannaioni's case even though it is not prosecuting the case, has made a similar argument in a case in Mesa County.

By the end of Wednesday's hearing, Denver District Judge A. Bruce Jones had concluded both sides were wrong, although it was still unclear how he ultimately would rule. Jones said he plans to deny Corry's motion to drop the charge, meaning the case against Mannaioni can proceed.

Hash oil is the potent goop left over after marijuana's active chemicals are dissolved from the underlying plant material. A popular amateur production method uses compressed butane gas, which can lead to dangerous explosions, such as the one that rocked the 1200 block of South Lipan Street in April. Mannaioni also is charged with arson in connection with the blast.

During Wednesday's hearing, Corry argued that home hash oil explosions are mistakes but not illegal.

"I compare it to frying a turkey," Corry said. "Accidents don't mean a crime has occurred."

Jones didn't seem impressed, calling some of Corry's arguments "circular." But Jones also criticized the attorney general's position.

"I'm going to tell him he's wrong. I'm going to tell him he's way wrong," Jones said.

Caught almost on the sidelines was the Denver district attorney's office, which is actually prosecuting the case.

A deputy district attorney said that hash oil qualifies as pot.

But he said there's a difference between Amendment 64's protection for "processing" marijuana and the state law's criminalizing of "manufacturing" concentrated marijuana.

Jones is expected to issue his ruling in the coming weeks.

 

[7greeneyes]

http://www.usatoday.com/story/news/nation/2015/01/07/arizona-legalizing-marijuana-proposal/21413261/

Arizona lawmaker proposes legalizing marijuana​

PHOENIX — Recreational marijuana use could be legal in Arizona by this summer if the Legislature and new Gov. Doug Ducey approve a plan introduced by a Phoenix lawmaker.

The legislation will be a long shot under the conservative-led Legislature. But state Rep. Mark Cardenas, D-Phoenix, said he has some strong arguments. Among them is the possibility of nearly $50 million in potential tax revenue that could offset a looming $1 billion budget shortfall.

Proponents of legalizing marijuana are expected to try to get a measure on the 2016 Arizona ballot, following similar successful efforts in Colorado, Washington and Oregon. Cardenas said polling in Arizona shows such a ballot measure would probably pass, as medical-marijuana legalization did in 2010.

For a variety of reasons, Cardenas said, it would be better if the Legislature passed its own version of the law first.

"We've seen issues with our medical-marijuana system ... but it's nearly impossible to come back at the Legislature and adjust it because we need 75% of the Legislature (to approve any changes to a voter-approved measure)," he said. "This would give us more leeway. If there were unforeseen consequences, we could easily come back and adjust it the next year."

He said going through the Legislature makes sense given the likelihood of voters passing it.

"We have to be smart about governing," he said. "If it's going to happen, let's get ahead of it and make sure we have the conversations to come up with the best program possible."

House Bill 2007 would legalize the purchase, possession and consumption of up to 1 ounce of marijuana for adults age 21 and older. It would expand the current medical-marijuana system under the Arizona Department of Health Services, and create a process for dispensaries to serve the general public. It also would allow adults age 21 and older to grow up to five plants for personal consumption.

"We have a rough framework to work off of, which would be Colorado," Cardenas said. "We would like to start with a discussion and work towards creating the same system here. They've gained a lot of revenue from that."

HB 2007 would levy a new tax against marijuana, at $50 an ounce. Thirty percent of the revenue would go to education; 10% to treatment programs for alcohol, tobacco and marijuana abuse; 10% for public-education campaigns educating youth and adults about the risks of alcohol, tobacco and marijuana; and the rest would go into the general fund.

"One of the things that isn't addressed in Colorado that is addressed here is that some of the revenue would be required to fund treatment programs for substance abuse," Cardenas said.

An analysis last year by the Joint Legislative Budget Committee estimated marijuana taxed at this level could bring about $48 million a year into the state.

The proposed tax rate is lower than that in Colorado, but higher than in Oregon. Oregon taxes marijuana at $35 an ounce. Colorado has a 15% excise tax, plus a 10% sales tax on marijuana, plus regular state and local sales taxes.

HB 2007 will need several legislative committee hearings and votes before it could become law. Even getting a first committee hearing could prove challenging.

A similar bill introduced last session by former Rep. Ruben Gallego, D-Phoenix, now a U.S. congressman, was never assigned to a committee. Without that assignment, it got no hearings or votes.

Cardenas introduced a bill last year that would have lowered the penalties for marijuana possession. It was assigned to the House Judiciary Committee, but it was never scheduled for a hearing.

"The possibility of it passing is not good, but we need to start looking at new and exciting ways to fill our budget gap if the governor is taking a 'no new taxes' stance."

 

[7greeneyes]

http://dcist.com/2015/01/anti-pot_legalization_advocates_vio.php

Anti-Marijuana Legalization Advocates Violated Campaign Finance Laws​

When Initiative 71—the ballot initiative to legalize the possession of small amounts of marijuana in the District—was overwhelmingly approved by D.C. voters, it seemed as if there weren't too many opponents.

In fact, up until the end of the summer, no one had really voiced their opposition of legalizing marijuana in D.C. But in August, a group called TIE D.C., which stands for "Two Is Enough, D.C." (meaning that alcohol and tobacco are enough legal substances in the District), formally launched their campaign to dissuade local voters from voting to legalize marijuana in the District. But, as it turns out, their campaign wasn't entirely legal.

According to documents from the Office of Campaign Finance obtained by DCist, TIE. D.C. was in violation of several campaign finance laws, including failure to officially register as a political committee, failure to file a financial report, and failure to include proper language on its campaign literature.

In response to the allegations against TIE D.C., head William Jones testified in a recent hearing with the OCF that "TIE D.C. was nothing more than a blog that he started to inform the public about the proposed initiative by voting against it." Jones also stated that he was the chairperson for the "No On 71" initiative, which he argued was the political committee he started to officially campaign against marijuana legalization.

But on September 17, 2014, TIE D.C. officially launched what was perceived to be a bona fide campaign. They even held a press conference outside of the Bible Way Church to announce their campaign. "T.I.E. D.C. is committed to protecting these communities and the rest of the city from the consequences of legalizing a third recreational drug," Jones said at the presser in September.

According to the OCF's allegations, TIE D.C. "may have begun as a blog, but it eventually became a full scale political movement, which was required to register with the OCF," but it never did. Moreover, the OCF says that TIE D.C. never filed a receipt and expenditure report, which any organization or committee raising funds for campaigning are supposed to do.

In the OCF's report, Jones says that TIE D.C. never collected any "therefore they were not obligated to file a financial report." But the OCF says the TIE D.C. website explicitly solicited donations through a PayPay "donate" button (that's since been removed from the website), and thus "raises the presumptions that it is more likely than not that [it] collected contributions.

In an email, Adam Eidinger, head of the Cannabis Campaign, the group responsible for Initiative 71, tells DCist that " I appreciate the OCF agreeing with our concerns that TIE DC was not playing by the rules," adding that, despite their campaign "it had little impact convincing voters to oppose ending arrests for growing and giving marijuana for adults."

The OCF recommended that Jones receive a fine of $2,000 for violating campaign finance laws with his TIE D.C. campaign. DCist reached out to Jones for a request to comment but has not yet heard back. We'll update when we do. You can view the full report from the OCF below:

https://www.scribd.com/doc/251963590/OCF-TIEDC2

 

[7greeneyes]

http://www.ft.com/cms/s/0/77906fa0-96c5-11e4-a83c-00144feabdc0.html#axzz3OFlyXQmL

Founders Fund puts its money in cannabis pot​

Just a year after Colorado legalised sales of recreational marijuana, the fledgling US cannabis industry has secured its first big institutional investor.

Peter Thiel’s Founders Fund, a venture capital firm best known for backing tech companies including Facebook, SpaceX, Airbnb and Spotify, has made a multimillion-dollar investment in Privateer Holdings, a Seattle-based private equity firm focused on cannabis.

Founders Fund is Privateer’s first investor that is not an extremely wealthy individual or family group, marking a significant step for efforts to establish the legal marijuana sector as a legitimate market.

“This is an important milestone in the transition of this industry from a state of prohibition to a state of legalisation,” said Brendan Kennedy, chief executive of Privateer, which he co-founded in 2011. Privateer is in discussions with other institutional investors, he added.

The Founders Fund investment is part of a $60m Series B funding round that Privateer is near to closing. It would not disclose the valuation that the round places on the business.

Combined with the $7m it raised previously and a $15m convertible bridge loan, the firm will have $82m in funding. Its businesses include Tilray, a Canadian medical marijuana producer, Leafly, an online cannabis ratings site, and Marley Natural, a consumer brand of marijuana products and accessories launching this year.

Privateer plans to establish “professional companies and brands” in a US market that it says is worth between $40bn and $50bn in annual sales, including the black market, Mr Kennedy said.

“What will happen is that entire market over the next five to 10 years will transition from prohibition to legalisation,” he said. “When consumers have the choice between professionally produced, professionally packaged, safe, secure, consistent quality products, they are going to pick that every time over something sold in a ziplock baggie.”

The total US legal marijuana market — medical and recreational — was forecast to reach $2.6bn in 2014 and $10.2bn by 2018, according to ArcView Group, a cannabis investor network.

“The macro frame for any of our investments are companies that we believe will be the dominant companies in their industry, and industries we believe will grow into the most important industries in the world,” said Geoff Lewis, the Founders Fund partner leading the firm’s investment in Privateer. “We think there is a really big market opportunity in cannabis. Privateer’s existing businesses are market leaders and scaling fast.”

The pot boom kicked off in earnest on January 1 2014, when Colorado became the first US state to allow cannabis sales to non-medical patients.

Washington state followed in July, and voters in Oregon, Alaska and the District of Columbia in November voted to legalise recreational use. Medical cannabis is allowed in 23 US states and the District of Columbia. Uruguay has legalised production, sale and consumption, and several European countries are moving to decriminalise the drug.

The liberalisation of US marijuana laws has sparked the interest of entrepreneurs and investors, despite the fact that the drug remains illegal under US federal law and many banks still refuse to do business with companies linked to the cannabis industry.

“There is somewhat of a regulatory risk with this business,” Mr Lewis acknowledged. “But I don’t think it’s an order of magnitude greater of regulatory risk as something like Airbnb, where when we invested a few years back, the regulatory environment was unclear and it was even illegal in many cities. [Cannabis] is obviously a more controversial space, but not dissimilar from others we’ve invested in.”

 

[7greeneyes]

http://www.reuters.com/article/2015/01/08/us-gw-pharma-epilepsy-idUSKBN0KH13U20150108

GW Pharma's cannabis drug fails in cancer pain study, shares fall​

An experimental cannabis drug failed to alleviate pain in cancer patients as hoped in a clinical study, sending shares in its British maker GW Pharmaceuticals as much as 21 percent lower on Thursday.

GW, which is developing the drug Sativex for pain in collaboration with Japan's Otsuka, said the first of three late-stage trials found no statistically significant difference between subjects using its product and those given a placebo.

GW Chief Executive Justin Gover said the findings were both disappointing and surprising, given encouraging results in earlier tests, but the company's scientists had not given up hope.

Results from two further Phase III trials are due later this year and, if positive, could still allow the drug to be submitted for treating pain in patients with advanced cancer, where it is designed to be given on top of opioids.

"Although we missed the primary endpoint in this trial, based upon the positive data seen in the Phase II programme, we remain confident in the ability for Sativex to relieve cancer pain in this patient population,” Gover said.

Shares in GW, which have been on a roll on hopes for its so-called cannabinoid medicines since the firm listed on Nasdaq in 2013, fell as much as 21 percent before paring losses to stand 5 percent lower by 1350 GMT.

Sativex, which is given as an under-the-tongue spray, is already approved for treating spasticity caused by multiple sclerosis in 27 countries, although not yet in the United States.

In addition to trying to expand Sativex's use into pain relief, GW is also developing other cannabis-derived drugs. One of these, Epidiolex, has produced promising results in children with hard-to-treat epilepsy and GW said work on this programme was on track or ahead of schedule.

Phase III data on Epidiolex in treatment-resistant epilepsy is now expected by the end of 2015.

Interest in the medical effects of cannabis has been spurred recently by the legalisation of recreational marijuana shops in Colorado and Canada's move to create a federally regulated medical marijuana industry.

But GW, which grows cannabis under licence at a secret location in Britain, distances itself from this by emphasising its ability to extract key ingredients for medical use, in the same way that painkillers have been developed from opium.

 

[7greeneyes]

http://news.nationalpost.com/2015/0...versial-husband-and-justin-trudeau-get-along/

Cannabis queen Jodie Emery hopes to run for Liberals, but can her controversial husband and Justin Trudeau get along?​

The old building at 307 West Hastings Street is like a marijuana super store, without any marijuana for sale. There’s a large retail shop on the ground level that offers old-school pipes and papers and bongs, and pricey high-tech vaporizers for the modern, more health-conscious crowd. Upstairs there’s a comfortable if malodorous lounge where bring-your-own cannabis products are openly consumed. Tobacco smoking is not allowed.

Everywhere there are illustrations and pictures of this town’s patron saint of marijuana, the so-called Prince of Pot, Marc Emery. This is his joint, and on most days since his release last summer from a U.S. prison, where he served a five-year sentence for selling marijuana seeds, he can be found inside his store or in the lounge, getting high and handing out free samples of potent hash oils and what he calls his “8-bud blend.”

Mr. Emery is as cantankerous as ever, directing written and verbal jabs at anyone whom he considers an enemy of the marijuana freedom and legalization movement, and to those whom he perceives as threats to himself and his wife, Jodie. His targets include Stephen Harper, whom both Emerys despise.

They have also included Liberal Leader Justin Trudeau. Which is a problem for Jodie.

She’s a politician. She once ran as a provincial Green Party candidate in B.C.. She’s now a member of Mr. Trudeau’s Liberal party, and hopes to be his candidate in the riding of Vancouver East in the coming election. Vancouver East is NDP territory, long held by MP Libby Davies, who recently announced that she won’t seek re-election.

It’s hard to tell if Ms. Emery’s intentions are a lark, perhaps a publicity stunt to benefit her and her husband’s mini-business empire, or if she’s serious.

“What if some radical managed to get a position and ran for the party and caused a massive headache and caused them to lose the election?” she asked, during an interview this week inside her third floor office at 307 West Hastings. “Some people might say that would be me,” Ms. Emery added with a laugh. “I’m just joking.”

A large bong sat on a desk inside the office. On another desk lay a back-issue of Cannabis Culture magazine, which the Emerys used to publish. I picked up the magazine and a sprinkling of medium-grind marijuana slid from the front cover and fell onto the floor.

Ms. Emery, 30, doesn’t like being called a one-issue candidate, but marijuana and marijuana legalization seem the most important things to her, after her husband. She smokes marijuana recreationally, she advocates for it, she wants it to be made accessible to every adult in Canada.

Two years ago, after Mr. Trudeau became Liberal leader and declared his party in favour of marijuana legalization, the Emerys decided they could endorse the Grits. Last year, a pair of Vancouver East riding executives asked Ms. Emery if she would put her name forward as the Liberal candidate. She thought it over for a couple of months and then decided she would do it.

Not every Liberal was thrilled. The Emerys are controversial. And Mr. Emery and Mr. Trudeau have a history, of sorts. In 2009, before he went to prison, Mr. Emery made a fiery speech attacking Mr. Trudeau, who was then just an ordinary Liberal MP. Mr. Trudeau had voted in favour of a Conservative government bill supporting mandatory minimum sentences for lawbreakers, such as unlicensed marijuana cultivators.

“[Mr. Trudeau] has smoked with me four or five times,” fumed Mr. Emery, “so it really pisses me off when I see Justin Trudeau, who took big gaggers with me, is in Parliament actually voting for Bill C-15. What a f—ing hypocrite.”

Mr. Trudeau later accused Mr. Emery of “flat out lying” and said he had never smoked marijuana with him.

Her husband has mellowed, Ms. Emery claims. “Since Marc’s been out of prison, a lot of people were waiting to see how outrageous he would be, what kind of crazy statement he would make, how he would humiliate Trudeau,” she says. “But a lot of people forget that prison kind of calms one down, and as time goes by, you have a chance to stop and think and strategize.”

The strategy for securing the Vancouver East nomination? Sign up as many pot smokers as possible. Ms. Emery has been door-knocking and signing up new party members, and running a nomination campaign from her office at 307 West Hastings, where the walls are festooned with in-house posters that encourage patrons to join the federal Liberals. Because, the posters read, “The Liberal Party wants to Legalize Marijuana.”

Meanwhile, her husband takes shots at the three other Liberals hoping to secure the nomination. They include Joanne Griffiths, a local volunteer and former wife of Arthur Griffiths, the once wealthy, now down-on-his-luck Vancouver businessman.

Her “entire life has been giving away money and [she] has never had to struggle a single day in her life,” Mr. Emery recently posted on Facebook. Ms. Griffiths counters that for years she has “worked hard to help people in need.”

To date, none of the four hopefuls have had their nomination papers approved by party headquarters, and a nomination meeting has not yet been scheduled. The fix is in, Mr. Emery suggests. He claims that Mr. Trudeau favours someone other than his wife.

Given everything, that seems plausible.

 

[7greeneyes]

http://www.prnewswire.com/news-rele...seed-to-sale-tracking-platform-300017766.html

Surna Inc. Acquires Majority Interest in Agrisoft Development Group, a Leading Cannabis Seed-to-Sale Tracking Platform​

BOULDER, Colo., Jan. 8, 2015 /PRNewswire/ -- Surna, Inc. (OTCQB:SRNA) has signed a definitive agreement to acquire a controlling interest in Agrisoft Development Group, a privately-held company that is one of the leading software developers of seed-to-sale tracking systems for state regulated cannabis cultivation and distribution companies. The deal will provide Surna with additional technology and capabilities to complement its current technology portfolio.

Agrisoft is led by Charles Ramsey, CEO, and Matt Cook, COO. Cook authored and implemented Colorado's medical marijuana regulatory structure, led the Medical Marijuana Enforcement Division and is widely regarded as the leading regulatory and implementation expert for cannabis. Cook has personally assisted with drafting and implementing state regulated cannabis models in numerous states across the country. His expertise insures that Agrisoft provides one of the most effective tracking solutions for strict compliance with state regulated cannabis models while also exceeding the most stringent regulatory requirements.

"We are convinced that this highly-sought acquisition will enable us to substantially increase our strength and impact in the cannabis industry," said Tom Bollich, CEO of Surna. "Because of my background in software development this particular acquisition is nothing short of a perfect storm in regards to Surna's diversification and rapid growth. Coupled with one of the strongest management teams in the sector, Agrisoft is the ideal platform to expand upon and develop the most robust, comprehensive, system to seamlessly integrate with Surna's existing and future technology. This is a game changer for us."

David Traylor, Surna's CBO stated, "The addition of a software point-of-sale tracking system fits ideally with our strategic direction of providing a complete solution for process control and monitoring that is mandated by state regulated cannabis models."

"Surna's proprietary technology improves cannabis grow operating margins by significantly increasing energy efficiency. Agrisoft's management and capabilities provides regulators, legislators, and banks with greater confidence in regards to the required decision making that will expand the cannabis industry. Surna and Agrisoft make the cannabis industry a more common sense, economically sound option for businesses and states," said Agrisoft COO Cook.

"Once we recognized the economic efficiency of Surna's cultivation technologies, and the even greater potential of their technology under development, we immediately knew joining the Surna organization was the best possible decision," said Agrisoft CEO Ramsay. "We are exceptionally enthusiastic about creating an even broader array of quality products that provide tracking solutions and satisfy the requirements of regulators and consumers."

The deal is expected to close in the first half of 2015.