MJ News for 01/12/2015


Jul 25, 2008
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Marijuana Legalization in Colorado: Can Oklahoma and Nebraska Get It Reversed?

At the end of last month, seven Republican members of Oklahoma's legislature, including five of the most conservative, publicly criticized that state's Republican attorney general, Scott Pruitt, for trying to reverse marijuana legalization in Colorado. "Oklahoma has been a pioneer and a leader in standing up to federal usurpations of power on everything from gun control to Obamacare," they wrote in a letter to Pruitt, who last month joined Nebraska Attorney General Jon Bruning in asking the U.S. Supreme Court to stop Colorado from regulating marijuana businesses. "We believe this lawsuit against our sister state has the potential, if it were to be successful at the Supreme Court, to undermine all of those efforts to protect our own state's right to govern itself under the Tenth Amendment to the U.S. Constitution."

The letter, spearheaded by state Rep. Mike Ritze (R-Broken Arrow), was a striking illustration of the split that the ongoing collapse of marijuana prohibition has created among Republicans, pitting their anti-pot prejudices against their avowed devotion to federalism. For Ritze, the choice was clear. "This is not about marijuana at its core," he said in a press release. "It is about the U.S. Constitution, the Tenth Amendment, and the right of states to govern themselves as they see fit. If the Supreme Court can force Colorado to criminalize a substance or activity and commandeer state resources to enforce extra-constitutional federal statutes and UN agreements, then it can essentially do anything, and states become mere administrative units for Washington, D.C….If the people of Colorado want to end prohibition of marijuana, while I may personally disagree with the decision, constitutionally speaking, they are entitled to do so."

Pruitt and Bruning, by contrast, elevated their antipathy to marijuana above their fealty to the Constitution. "It is curious—and disappointing—to see a suit like this filed by two states that have taken the lead in defending state prerogatives in other policy areas," writes Case Western University law professor Jonathan Adler at The Volokh Conspiracy. "It is as if their arguments about federalism and state autonomy were not arguments of principle but rather an opportunistic effort to challenge federal policies they don't like on other grounds. It makes Oklahoma and Nebraska look like fair-weather federalists."

In their lawsuit, Pruitt and Bruning complain that Colorado marijuana ends up in neighboring Oklahoma and Nebraska, causing "the diversion of limited manpower and resources to arrest and process suspected and convicted felons involved in the increased illegal marijuana trafficking or transportation." Some might argue that Oklahoma and Nebraska's determination to stop people from getting high is the real cause of this strain on their law enforcement resources. But according to Pruitt and Bruning, "Colorado's actions amount to what would be casus belli if the states were fully sovereign nations." That is like saying Iran would be justified in waging war on Iraq or Turkey because the governments of those neighboring countries refuse to ban alcoholic beverages.

Oklahoma and Nebraska argue that the Supreme Court should overturn Amendment 64, the legalization measure that Colorado voters approved in 2012, because it "directly conflicts with federal law," which the Constitution makes "the supreme law of the land." Specifically, they maintain that Amendment 64 and the regulatory system it created are preempted by the Controlled Substances Act (CSA), which bans marijuana. Yet as the lawsuit concedes, the CSA itself expressly limits preemption to situations where there is "a positive conflict" between state and federal law "so that the two cannot consistently stand together."

In a 2012 Cato Institute paper, Vanderbilt University law professor Robert Mikos explains that "a positive conflict would seem to arise anytime a state engages in, or requires others to engage in, conduct or inaction that violates the CSA." If state officials grew medical marijuana or distributed it to patients, for example, they would be violating the CSA, and the law establishing that program would be preempted. But specifying the criteria for exemption from state penalties, which is essentially what the regulations mandated by Amendment 64 do, does not require anyone to violate the CSA. Mikos concludes that Congress "has left [states] free to regulate marijuana, so long as their regulations do not positively conflict with the CSA."

Oklahoma and Nebraska are asking the Supreme Court to overturn the provisions of Amendment 64 that authorize the state to regulate marijuana businesses, which would leave in place the provisions eliminating state penalties for possession, sharing, and home cultivation. The two states argue that Colorado's regulations "embed state and local government actors with private actors in a state-sanctioned and state-supervised industry which is intended to, and does, cultivate, package, and distribute marijuana for commercial and private possession and use in violation of the CSA." Yet with the possible exception of tax collection, which might be construed as money laundering, none of the actions that Amendment 64 requires state and local officials to perform violates federal law. They are instead focused on making sure that producers and retailers meet the conditions for avoiding prosecution under state law, an area where the Constitution leaves Colorado a lot of leeway.

Under our federal system, states have no obligation to punish every activity that Congress decides to treat as a crime. Colorado therefore could repeal all marijuana-related penalties, leaving people free to grow, possess, buy, and sell marijuana without restriction and without fear of prosecution under state law. Yet Oklahoma and Nebraska argue that a lesser step, repealing penalties with conditions, somehow violates the Constitution.

The states' lawsuit leans heavily on Gonzales v. Raich, the 2005 case in which the Supreme Court said the Commerce Clause gives the federal government the authority to prosecute people for growing and possessing marijuana, even if it is for their own medical use and they are permitted to do so under state law. According to Raich, the federal government's power to "regulate commerce…among the several states" encompasses the tiniest speck of marijuana in a cancer patient's bedstand, even if she grew it at home and it never left her property, let alone the state. As Justice Clarence Thomas noted in his dissent, "If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything—and the Federal Government is no longer one of limited and enumerated powers."

Even so, Raich cannot do the work that Pruitt and Bruning want it to do, as Randy Barnett, the Georgetown law professor who litigated the case, points out. To say that the federal government can enforce its own ban on marijuana even in states that have legalized it for medical or recreational use is not the same as saying the federal government can compel states to assist that effort. In fact, as Ritze and his colleagues note in their letter to Pruitt, the Supreme Court made it clear in the 1997 case Printz v. United States that Congress may not "commandeer" state and local officials to enforce its laws. The issue in Printz was a federal law requiring police chiefs to run background checks on gun buyers, a minor mandate compared to conscripting state officials in a war on marijuana they have rejected.

In light of Raich, Pruitt and Bruning claim, federal law clearly preempts Amendment 64, since "there is no doubt that Congress intended the CSA to serve the purpose of making all manufacture, sale, and possession of regulated drugs illegal, except to the extent explicitly authorized by the CSA." By legalizing marijuana, they argue, Colorado frustrates that intent. But regardless of what Congress may have wanted to do, it does not have the constitutional authority to make Colorado ban marijuana, and Raich does not change that fact.

Pruitt and Bruning's reliance on Raich, which was the Obama administration's chief crutch in defending the requirement that every American obtain government-approved medical coverage, dismayed many conservatives who admired their resistance to the Patient Protection and Affordable Care Act. Raich epitomizes the Court's willingness to find justification for nearly any congressional whim in the Commerce Clause, a tendency conservatives usually bemoan.

That complaint is reflected in the letter that Ritze and his colleagues sent to Pruitt. They not only defend the anti-commandeering doctrine enunciated in Printz but join Justice Thomas in questioning the super-elastic Commerce Clause described in Raich.

The legislators argue that the power to "regulate commerce…among the several states," properly understood, does not apply to purely intrastate activity. "For the same reason that alcohol prohibition required a constitutional amendment," they say, "we believe a strong argument can be made that criminalizing and prosecuting drug crimes must be decided at the state level, absent a properly ratified constitutional amendment. If the commerce clause could be interpreted so broadly, there is virtually nothing the federal government could not regulate or control under the guise of 'commerce.'" That is what consistent constitutionalists, as opposed to faux federalists like Pruitt and Bruning, sound like.


Jul 25, 2008
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Losing marijuana business, Mexican cartels push heroin and meth

SAN YSIDRO, Calif. — Mexican traffickers are sending a flood of cheap heroin and methamphetamine across the U.S. border, the latest drug seizure statistics show, in a new sign that America’s marijuana decriminalization trend is upending the North American narcotics trade.

The amount of cannabis seized by U.S. federal, state and local officers along the boundary with Mexico has fallen 37 percent since 2011, a period during which American marijuana consumers have increasingly turned to the more potent, higher-grade domestic varieties cultivated under legal and quasi-legal protections in more than two dozen U.S. states.

Made-in-the-USA marijuana is quickly displacing the cheap, seedy, hard-packed version harvested by the bushel in Mexico’s Sierra Madre mountains. That has prompted Mexican drug farmers to plant more opium poppies, and the sticky brown and black “tar” heroin they produce is channeled by traffickers into the U.S. communities hit hardest by prescription painkiller abuse, off*ering addicts a $10 alternative to $80-a-pill oxycodone.

“Legalization of marijuana for recreational use has given U.S. consumers access to high-quality marijuana, with genetically improved strains, grown in greenhouses,” said Raul Benitez-Manaut, a drug-war expert at Mexico’s National Autonomous University. “That’s why the Mexican cartels are switching to heroin and meth.”

U.S. law enforcement agents seized 2,181 kilograms of heroin last year coming from Mexico, nearly three times the amount confiscated in 2009.

Heroin seizures along the U.S.-Mexico border have nearly tripled since 2009, while seizures of meth have quintupled. VIEW GRAPHIC
Methamphetamine, too, has surged, mocking the Hollywood image of backwoods bayou labs and “Breaking Bad” chemists. The reality, according to Drug Enforcement Administration figures, is that 90 percent of the meth on U.S. streets is cooked in Mexico, where precursor chemicals are far easier to obtain.

“The days of the large-scale U.S. meth labs are pretty much gone, given how much the Mexicans have taken over production south of the border and distribution into the United States,” said Lawrence Payne, a DEA spokesman. “Their product is far superior, cheaper and more pure.”

Last year, 15,803 kilograms of the drug was seized along the border, up from 3,076 kilos in 2009.

“Criminal organizations are no longer going for bulk marijuana,” said Sidney Aki, the U.S. Customs and Border Protection port director here at the agency’s busiest crossing for pedestrians and passenger vehicles, just south of San Diego. “Hard drugs are the growing trend, and they’re profitable in small amounts.”

Voters in the District of Columbia and 23 U.S. states have approved marijuana for recreational or medical use, with Colorado, Washington state, Alaska and Oregon opting for full legalization. Estimates of the size of America’s marijuana harvest vary widely, and DEA officials say they do not know how quickly it may be increasing as a result of decriminalization.

Mexican cartels continue to deploy people as “mules” strapped with 50-pound marijuana backpacks to hike through the Arizona borderlands and send commercial trucks into Texas with bales of shrink-wrapped cannabis so big they need to be taken out on a forklift.

But the profitability of the marijuana trade has slumped on falling demand for Mexico’s “brick weed,” so called because it is crushed into airtight bundles for transport across the border. Drug farmers in the Sierra Madre say that they can barely make money planting mota anymore.

The cartels, and consumers, are turning away from cocaine, too. Last year, U.S. agents confiscated 11,917 kilograms of cocaine along the Mexico border, down from 27,444 kilos in 2011.

This reflects lower demand for the drug in the United States, experts say, as well as a cartel business preference for heroin and meth. Those two substances can be cheaply produced in Mexico, unlike cocaine, which is far pricier, and therefore riskier, because it must be smuggled from South America.

The Sinaloa cartel, considered Mexico’s most powerful drug trafficking organization despite the capture last February of leader Joaquin “El Chapo” Guzman, remains the dominant criminal power along Mexico’s Pacific Coast. Its territory spans the entire western half of the U.S.-Mexico boundary, from Ciudad Juarez, opposite El Paso, to Tijuana, on the Pacific Coast.

At harvest time, the cartel’s middlemen make their rounds to remote Sierra Madre stream valleys in pickup trucks and four-wheelers, armed with guns and cash. They buy sticky balls of raw opium from hardscrabble farmers and deliver them to crude heroin kitchens that prepare the drug for shipment. The U.S. interstate highway system is less than a day’s drive away.

Heroin and meth are far easier to transport and conceal than marijuana. Especially worrisome to U.S. officials is a growing trend of more border-crossing pedestrians carrying the drugs strapped under their clothing or hidden in body cavities.

“The criminals are trying to blend in among the legitimate travelers, who are 99 percent of the individuals crossing through here,” said Aki, the San Ysidro port director. “That’s the hard part for us.”

At the San Ysidro crossing, soon to expand to 35 lanes, U.S. agents with drug-sniffing dogs and foot-long screwdrivers weave among the lines of cars that back up into Mexico.

Agents say the screwdrivers, some so old their handles are worn to a nub, are their most valuable investigative tool. Agents knock them against tires and gas tanks for a quick sonic impression.

“If you tap a tank with something solid inside, there’s a thud,” one inspector said. “It’s like hitting concrete.”

Harder to detect are “deep-concealed” drugs buried in fake engine cylinders, dashboard panels, even acid-proof capsules inside car batteries. One vehicle seized here last year carried liquid meth in its windshield-wiper reservoir.

Finding small packages in the river of cars and trucks coming across is akin to a game of “Where’s Waldo?” for U.S. inspectors. Vehicles that arouse the suspicions of border agents or get their dogs barking and lunging are sent to a secondary inspection station with giant X-ray machines and larger teams of
screwdriver-wielding inspectors.

If drugs don’t appear, the agents may drive the vehicles into garages to open their engines, pry apart interior panels and search for any signs of suspicious alterations. Traffickers will sometimes mist decoy vehicles with marijuana oil or resin to provoke the dogs and draw agents into a fruitless search.

“It’s like a fish fry,” Aki said. “The fish is gone, but the scent is still there.”

With the dogs and agents tied up inspecting the decoys, the traffickers may try sneaking meth and heroin through.

In recent years, Mexican cartels also have begun producing higher-value “white” heroin, typically associated with traffickers from Colombia or Asia, according to DEA officials.

“The Mexicans are evolving in their production abilities and getting more sophisticated,” said Payne, the DEA spokesman. “It’s not just black tar anymore.”

Colombian and Caribbean traffickers once controlled heroin distribution east of the Mississippi River, but Mexican criminal groups now dominate the entire North American market, he said.

The United States has an estimated 600,000 heroin users, Payne said — a threefold increase in the past five years. But that number is dwarfed by the estimated 10 million Americans who abuse prescription painkillers.

Those addicts are the prime target for the booming heroin business. A U.S. crackdown on prescription opiates has driven up the price for drugs such as OxyContin and Percocet, enticing desperate addicts to switch to cheap heroin to fend off withdrawal symptoms.

The profile of U.S. heroin addiction is also changing, said Phil Herschman, chief clinical officer with the CRC Health Group, which operates 170 treatment centers in 30 U.S. states.

“Now, we’re seeing housewives coming in who had been addicted to Vicodin for two or three years before switching to heroin, or adolescents who got hooked by snorting it, thinking it was safe, only to end up injecting themselves,” he said.

“You can’t even begin to measure how it tears families apart,” he added. “It’s devastating.”


Jul 25, 2008
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Did NCAA Go Too Far with Oregon Marijuana Suspensions?

Oregon quarterback Marcus Mariota's receiving options will be limited in Monday night's national championship against Ohio State. That's been a shorthanded group all year. However, the latest attrition to the Ducks' wide receiver unit isn't because of injury or bad luck.

According to Aaron Fentress of CSNNW.com, second-leading receiver Darren Carrington failed an NCAA-administered drug test for marijuana and did not travel to Arlington for the title game. Pete Thamel of Sports Illustrated later reported that running back Ayele Forde will also miss the game because of a failed drug test for marijuana.

The Ducks will already be without Devon Allen, who led the team with seven receiving touchdowns, because of a knee injury.

"Darren's my friend," said Allen to Pat Forde of Yahoo! Sports. "I love that guy and it sucks that he can't play and the NCAA made an example out of him."

There's no debate that Carrington and Forde are in the wrong, even though Oregon, along with Alaska, is set to legalize marijuana for recreational use by this year. (Recreational use is already legal in Colorado and Washington.) They used it and got busted for it. As a result, they won't be able to help their team. That part is as black and white as it gets.

Where things get cloudier, so to speak, is whether the NCAA should re-examine its testing policy. (Additionally, each school has its own drug policy; Oregon specifically has a four-strike policy.) The NCAA's threshold for a positive marijuana test is five nanograms of THC, the primary ingredient in marijuana, an NCAA spokesperson told Thamel. That's far lower than the NFL and MLB:

The easiest way to quantify how strict the NCAA’s threshold is: Compare it to the threshold from other sports. The NFL increased its minimum threshold from 15 nanograms to 35 in September. The MLB's minimum is 50 nanograms, the same level as airline pilots. The World Anti-Doping Agency set its minimum at 150 nanograms, a level at which an expert contacted by USA Today was quoted as saying, “[one has to be a] pretty dedicated cannabis consumer” to test positive.

Is the NCAA being too strict when it comes to pot? Comparing it side-by-side to other major sports, amateur or professional, would indicate that it is. Easing up on the THC threshold for future tests feels like a logical next step.

The question is how long will it take for NCAA's stance on the matter to catch up with much of society's stance.

How marijuana is viewed is changing, both nationally and within the scope of college athletics. Specifically, it's not tied to enhancing on-field performance. If it doesn't affect the game in the way performance-enhancing drugs do, there's not a lot of incentive to care what someone does in their spare time.

In that way, marijuana use is joining the ranks of underage drinking and even impermissible benefits on the scale of "illegal" activity.

Doug Benc/Associated Press
There are roadblocks for actual change, however. NCAA legislation, even with upcoming voting autonomy for Power Five conferences, can take eons to pass, if it passes at all. Given that this would be a push to liberalize punishment for recreational drug use, widespread support from admins could be hard to garner.

Furthermore, there are front-burner issues that need to be addressed like player safety, well-being and compensation.

But at some point, the NCAA will no longer be able to delay changes in how it views and discourages marijuana use. Loosening the threshold for testing marijuana wouldn't be an admission that pot, or other harder drugs, is OK. It wouldn't be a stance from the Association that pot should be legal.

It would, however, be an admission that the testing policy was out-of-date—and it is. Change is something the NCAA needs if it's going to remain college athletics' governing body. Until then, there will be more and more guys like Darren Carrington who get suspended for an antiquated policy.


Jul 25, 2008
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Marijuana Is Still Illegal By Federal Law, But This Venture Capital Firm Doesn’t Care

One of the top venture capital firms in the world is taking advantage of the increasingly hazy realm of marijuana law.

Founders Fund is pouring money into Privateer Holdings, a private equity firm in Seattle, Wash. Privateer Holdings was first launched in 2010 and directs investments into medical and recreational sectors of the marijuana industry. The undisclosed investment from the fund run by Peter Thiel, a co-founder of PayPal, is listed as being in the millions.

“Founders Fund is known for making some of the most lucrative and radically transformational investments of the past decade,” said Privateer Holdings CEO Brendan Kennedy in a press release Jan. 8. “With this investment they are signaling that they, like us, believe that the end of prohibition and the social harms it causes is inevitable.”

The federal government classifies marijuana as a Schedule 1 drug, like of heroin and ecstasy, but is facing increasing pressure from states as they move to legalize medical and recreational marijuana. The large investment could represent a watershed moment for the growing marijuana industry, which many investors have deemed too risky in the past. Legal marijuana saw sales last year totaling up to $2.6 billion, according to The ArcView Group, a company that conducts research on the marijuana industry.

“This investment from Founders Fund is just another marker that we’ve probably reached a tipping point for the industry. From a historical perspective, there are a lot of similarities between the end of alcohol prohibition and our current trajectory with marijuana. We’re probably going down a similar path,” Leslie Bocskor, managing partner of Electrum Partners and founder of the Electrum Report, told The Daily Caller News Foundation.

“Yes, there were investors that have backed out the industry in the past and there will be more. This is still a battle. These next two years will be a battle. But we’ll also see many more investors come in. The positive news will outweigh any negative news. They’ll be following the Founders Fund.”

According to Bocskor, one of the best indicators that the federal government won’t start cracking down on marijuana is a recent memo from the Department of Justice regarding Native American reservations in the U.S. It stated that if they were to engage in cultivation or production of cannabis for recreational or medicinal purposes, the federal government wouldn’t seek enforcement action.

“I have not been able to find a single instance in the last 40 years where the federal government has given the Native American governments anything and then subsequently taken it back,” Bocskor said.

Terra Tech founder and CEO Derek Peterson reflected on the announcement and how much the cannabis industry has changed since he started his company in 2010, at a time when it was one of the first firms to enter the medical marijuana industry.

“The reality of waking up one morning and getting arrested for assisting to the cultivation of a Schedule 1 narcotic doesn’t seem to exist anymore. In 2010 that existed. Any one of us could have been picked up. A lot of people are still going to sit on the sidelines until federal regulations change. But now that name-brand people are putting money in, people are going to want to join the ball game. That’s Wall Street 101.

“Before, the only investors were people really willing to speculate. It’s transitioned from that into an environment where we’re seeing more institutional money. Now, we’re seeing a better risk appetite.

“It took us a year to raise a million dollars back in 2010. This year, we’ve raised close to 10 million dollars this year alone,” Peterson told TheDCNF.

Others, however, were skeptical of what large investment from top funds might mean for the drug moving forward.

“There is so much money now entering the field that has no interest in pot’s medicinal purposes and the well-being of the people who are consuming it. They are just looking at ways to make more money,” Anthony Franciosi, founder of Ant’s Organic marijuana, told TheDCNF. “That said, it is very important that the investing is done with finesse and with a focus on high quality cannabis and the consumers’ final well-being, not just on producing high yields of product to make more money.”


Jul 25, 2008
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(Australia) Labor's plan to abandon cannabis trials 'irresponsible', says health minister Jillian Skinner

NSW Health Minister Jillian Skinner has described Labor leader Luke Foley's suggestion to abandon clinical trials into medicinal cannabis as "irresponsible", saying police have been given every discretion to allow terminally ill patients to ease their pain.

Mr Foley said on Sunday that NSW needed a more ambitious medicinal cannabis program than the scheme being proposed by the Baird government.

The NSW government is planning a $9 million trial for medicinal cannabis that has the potential to treat children with severe epilepsy, terminally ill adults and those undergoing chemotherapy.

Under new guidelines, police will have the discretion not to charge terminally-ill cannabis users and carers who assist them for breaking drug laws.

Speaking in Sydney, Mr Foley said a "more ambitious" approach, involving changes to drug laws, was needed.

"The law should disappear from the statute books," Mr Foley told reporters in Strathfield.

"I'd like to see us cross party lines here and change the law so that the terminally ill and their loved ones need never fear prosecution.

"I want to ... give people experiencing terrible pain and suffering some hope."

Mr Foley said he wanted the Drug Misuse and Trafficking Act changed "as a matter of urgency" in the first sitting week of parliament after the March state election.

He said if a state trial on medicinal cannabis were to take place, "it should be far quicker than what's envisaged in NSW".

"I think we can go forward without a trial, personally," Mr Foley added.

Mrs Skinner said the government was happy to work in a bipartisan manner.

"But it would be simply irresponsible to abandon clinical trials into the role cannabis-derived medicinal products can play in improving health outcomes for people suffering chronic illness," she said in a statement.

"The clinical trials will proceed because they represent the most responsible way to explore how medicinal cannabis-derived products can provide relief for a range of patients, including children.

"The trials will bring together leading NSW clinicians and researchers and draw on international best practice.

"To abandon the trials would be to leave families who are already facing the greatest crisis of their lives without the guidance, confidence and support they need.

"In the interim, as far as terminally ill patients are concerned, we have given police every discretion to allow patients and their carers to alleviate their symptoms."

Mr Foley said he had not yet talked to NSW Premier Mike Baird about the issue.

Overseas trials, especially in Israel, showed that for some terminally ill people "cannabinoid treatments are the only effective measure of pain relief", Mr Foley said.

He pointed to a pharmaceutical product used to treat multiple sclerosis, saying it could possibly be used in NSW as part of a medicinal cannabis program.

"There has to be more work done on the supply side," Mr Foley added.

The trial, announced by the Baird government in December, will first have to overcome logistical hurdles in importing medical cannabis from Europe or the US.

If permission is denied, the government has indicated it could grow its own cannabis crop.

Mr Baird has previously stressed that the drug remains illegal.


Jul 25, 2008
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Investors Continue To Flock To Cannabis Companies In Green New Year

NEW YORK (MainStreet) - The smart and monied set with investment money to place in the market has decidedly moved - and with greater strength than ever - into the marijuana sector over the last quarter.

"The successful legislation in Oregon, Alaska, and the District of Columbia, along with the close result in Florida, will make 2015 a critical year for the cannabis industry," said Michael Swartz, an analyst at Viridian Capital and Research, a Manhattan based financial analyst-banker group focused on the sector. "These midterm results will offer law makers in other states the confidence to introduce new initiatives for action in 2015 and placement on 2016 ballots. We believe several states will see bills in 2015 to legalize recreational marijuana and that legalization could be on the ballot in seven to thirteen states -- most notably California -- during the 2016 elections."

His firm also identifies and tracks publicly traded companies in the cannabis sector and publishes a report and stock index which analyses stock performance, company announcements and valuations against important industry trends. That the public market would begin to see the impact of ongoing and increasingly large investments by increasingly well known investors, particularly over the last three to six months, is not a surprise, particularly given the backgrounds and focus of those now moving into the fray publicly.

Recently Paypal founder and early Facebook investor Peter Thiel announced his intention to invest in a Series B round of financing with Privateer Holdings, currently in the middle of a $75 million raise. Privateer has investments in Leafly, a dispensary listing service, testing labs, and is even developing branded products with the Bob Marley imprint.

In Colorado this year, Arcview Investments has committed money to CanopyBoulder, an organization that will invest $20,000 in 20 start-ups accepted in its accelerator this year.

Public companies that are already established in the market with good performance to date can also expect a good year, per Swartz.

"We see continued growth in the number of cannabis companies looking to access the capital markets to raise growth capital and/or execute M&A strategies," he said. "As valuations in the public cannabis companies continue to rationalize, we expect to see increasing interest on the part of investment funds to take equity stakes in cannabis enterprises, specifically sector specific cannabis enterprises versus the straight debt and convertible debt financing that has made up the bulk of financing in public cannabis companies to date."

Swartz also believes in line with most conventional analysis about the sector at the moment that three sectors will thrive in particular this year.

"The top three sectors that we believe are the most attractive in 2015 are software, biotech, and physical security," he said. "This seems to be the sentiment with investors as well, with those three sectors being the top performers in the Viridian Cannabis Stock Index."


Jul 25, 2008
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Silicon valley bets big on cannabis

Silicon Valley has given its seal of approval to America's burgeoning legal cannabis industry with investors who bankrolled Facebook giving millions of dollars to drug start-ups.

Supporters of cannabis legalisation called it a "Berlin Wall moment" and a "tipping point" as money was committed by Founders Fund, the venture capital firm started by Peter Thiel, the billionaire who gave Mark Zuckerberg his first $500,000 in funding.

"We don’t worry what people think about us," said Geoff Lewis, a partner at the firm, adding that cannabis would be a "massive industry within the next decade."

The money will help to fund Marley Natural, which will sell Bob Marley-branded strains of Jamaican cannabis for recreational users.

It will also fund a cannabis producer with a 60,000 sq ft facility in Canada and an online service called Leafly where users review strains and sellers of the drug. Leafly already has four million visitors a month.

Thiel and Founders Fund have previously helped to kickstart Elon Musk's space company SpaceX, and the holiday service Aribnb.

It is the first time a mainstream institutional investor has publicly put money into cannabis start-ups.

Other Silicon Valley money-men who had feared bad publicity, or that their money would go up in smoke, are now likely to follow suit.

The US states of Colorado and Washington became the first to legalise cannabis for recreational use in 2012, with the first shops opening there last year. Colorado is now selling $30 million worth of the drug a month, much of it to "drug tourists."

In 2014 Oregon and Alaska also voted to legalise cannabis for recreational use. Votes in six more states, including California, may take place in 2016.

There are 23 states that allow the use of cannabis for medical purposes.

However, a backlash is underway with Nebraska and Oklahoma suing their neighbour Colorado in the US Supreme Court, claiming they are being overrun with the drug from across their borders.

They claim legalisation violates the US Constitution and accuse Colroado of creating a ":dangerous gap in the federal drug control system," and of "placing stress on the criminal justice systems" of other states.

Last year Thiel caused a storm when he suggested that Twitter, Facebook's social media rival," was being mismanaged and there was "probably a lot of pot-smoking going on there."

He later said: "You could smoke a lot of pot and still have a great company if the business model is as robust as Twitter's."

Legalisation campaigners said his involvement marked a watershed in the emergence of cannabis from the black market to a bona fide multi-billion dollar industry.

The Silicon Valley cash injection is going to Privateer Holdings, which owns Marley Natural and Leafly.

Privateer chief executive Brendan Kennedy, who was educated at Yale, told the Los Angeles Times: "Six to 12 months from now there will be investment banks who will have analysts following cannabis like they follow healthcare or agricultural commodities.

“This announcement will give a lot of people in finance permission to look at this industry."

Taylor West, deputy director of the National Cannabis Industry Association, said: "This is a milestone. It shows the industry is solid enough that an investment firm like this is comfortable stepping in."


Jul 25, 2008
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Marijuana ‘green rush’: Cannabis Career Institute business seminar tells all

While lawmakers, health officials and law enforcement agencies ponder the greater implications of marijuana legalization, the entrepreneurs are busy. Underway in Los Angeles this weekend: a business seminar hosted by the Cannabis Career Institute, advising prospective students, “With law changes and endless opportunities in the industry coming to late there is no better time to invest in the green rush.” A dozen similar seminars are planned in the month of January alone.

The day-long event, priced at $299, covers business and marketing basics such as insurance, zoning, compliancy and licenses - along with such specialized concerns as operating a dispensary or delivery service, investing in the business plus the particulars of “edible” or “grow” operations.

“We will have one or more of the top industry master growers on hand to give you a three-hour demonstration on growing and an overview of the industry,” the organizers advise, adding ,”We will have a top cannabis industry chef on hand to show you how to make medical marijuana edibles. We will discuss, tinctures, concentrates, oils, candies, and alternative methods of delivery.”

The organization has 12 “state specific” seminars planned in seven states this month, with many more planned throughout the year, including one in Arlington, Virginia - just outside the nation’s capital. Students walk away with a how-to book and possibly some credentials.

“We offer certificates for the following programs,” the institute says. “Master Growing, Cannabis Business Management, Edibles Operation, Budtending and Dispensary Management.”

Policy wonks are taking notice.

“Supporters and opponents of such initiatives make numerous claims about state-level marijuana legalization. Advocates believe legalization reduces crime, raises revenue, lowers criminal justice expenditure, improves public health, improves traffic safety, and stimulates the economy. Critics believe legalization spurs marijuana use, increases crime, diminishes traffic safety, harms public health, and lowers teen educational achievement. Systematic evaluation of these claims, however, has been absent,” writes Jeffrey Miron, director of economic studies at the Cato Institute and a Harvard University economist, in a preliminary analysis of legalization in Colorado.

“The conclusion from this initial evaluation is that changes in Colorado’s marijuana policy have had minimal impact on marijuana use and the outcomes sometimes associated with use. Colorado has collected non-trivial tax revenue from legal marijuana, but so far less than anticipated by legalization advocates,” Mr. Miron stated.

According to the Colorado Department of Revenue, recreational sales of marijuana reached $34.1 in the month of August alone for example - with medical marijuana sales right behind at $33.4 million. The state took in $7.5 million in tax revenue during that month - and by year’s end, about $44 million. It’s complicated, though: revenue is based on retail and medical marijuana sales tax, excise tax, and retail or medical marijuana application and license fees.

Tracking the local impact of legalization through crime statistics is very complicated; a Washington Times analysis of recent numbers from the Denver police found that marijuana-related incidents have constituted 2 percent of crimes since 2012, primarily burglary and criminal mischief.

The data revealed 317 burglaries of marijuana retailers during 2012 and 2013 combined, and about 74 last year. The number of drivers cited for being under the influence of drugs has gone up, however - as have the number of emergency rooms visits from young people who have encountered marijuana edibles, “eating multiple times the recommended doses, such as an entire candy bar instead of just a single section,” a Denver-based FBI agent told The Times.