Cannabis Law Prof Blog

Editor: Franklin G. Snyder
Texas A&M University
School of Law

Friday, June 17, 2016

Microsoft To Launch Marijuana Business Program

ALove it or hate it, you've got to agree that nobody's better at chasing a buck than Microsoft.  The tech giant announced today that it is partnering with KIND Financial -- already a leading player in the cannabis business -- to develop a full seed-to-sale system for tracking marijuana plants:  

Three days after investing in LinkedIn Corp. LNKD, -0.14% in a record-setting $26 billion deal, the company announced its first venture into the world of marijuana, striking a partnership with KIND Financial to provide seed-to-sale software to state and local governments for the management of cannabis commerce and distribution.


The deal makes Microsoft one of the first major technology companies—and one of the first major publicly traded companies -- to acknowledge the rapid legalization of marijuana, with recreational use already legalized in Alaska, Colorado, Oregon, Washington and Washington D.C., and up for vote soon in five other major states, including California.


Major brands have been mute on the controversial topic, but more have started to show their support as acceptance has spread. Last month, Walgreens Boots Alliance posted a blog touting research showing the benefits of medical marijuana, which is now legal in 24 states.


The legal marijuana industry is expected to balloon in coming years. Sales of legalized marijuana are projected to hit $6.7 billion this year, compared with $5.4 billion a year ago, according to industry tracker ArcView Market Research.


KIND Financial is using Microsoft’s cloud platform to build out its services for government agencies. According to, a team at Microsoft will help clients navigate regulations and laws, while tracking legal cannabis commerce and helping to stop product from reaching the black market.


In a statement, a Microsoft spokesperson said the company “supports government missions to regulate and monitor controlled substances and items, from the Justice Department regulating tobacco and firearms to a state regulating legal cannabis.”


June 17, 2016 in Business, News, Stocks | Permalink | Comments (0)

Tuesday, January 12, 2016

Seattle Relaxes Buffer Zones Around Cannabis Dispensaries

ASome new neighborhoods may be getting marijuana dispensaries in Seattle, thanks to a decision by the City Council to reduce buffer zones around cannabis-related businesses.  A combination of zoning rules and the state's default 1,000-foot buffer zone rules meant that large chunks of the city had no such businesses.  That's changed, as of yesterday:

On Monday, the City Council unanimously set buffer zones for producers and processors at 250 feet.

For retailers, the new buffer will be 250 feet downtown and 500 feet elsewhere in the city.

No more than two pot businesses can be within 1,000 feet of each other.

The 1,000-foot buffer had led to vast areas of the city without marijuana businesses and clusters in areas like SODO, where James Lathrop runs Cannabis City, the first legal marijuana store to open in Seattle.

"We're a block away from the dump. We're here because of this crazy zoning," Lathrop said.

Lathrop was among the marijuana business people who advocated for smaller buffer zones.

Supporters said loosening the buffer zones will help the state's legal marijuana system succeed by competing with the illicit market, and make it more available to visitors.

Some in the industry are also opposed to smaller buffer zones.

They urged the council to slow down, arguing that pot shops in more neighborhoods could lead to public backlash and businesses failing under competition.


January 12, 2016 in Business, Local Regulation | Permalink | Comments (0)

OTC Company Buys California Dispensary

AMarketWatch:  Marijuana moves from the black market to the stock market:

Terra Tech [ticker TRTC],  a cannabis-focused agriculture company, announced its acquisition of the California-based Blum Oakland dispensary on Tuesday.

The dispensary — which brought in slightly less than $15 million in revenue in 2015 — has about 48,000 registered patients and sees nearly 1,000 patients a day, according to Terra Tech chief executive Derek Peterson. The acquisition of the storefront includes a "seed-to-sale" fully integrated facility where cannabis is cultivated, processed and sold to patients.


January 12, 2016 in Business, Stocks | Permalink | Comments (0)

Sunday, January 10, 2016

New York MMJ Rollout is Slow. Really, Really Slow.

ABack in the 1820s it took can-do New Yorkers only 8 years to dig the Erie Canal.  That was an immense 363-mile waterway from Albany to Buffalo, dug with shovels, fitted with 36 ship locks, that tied the Great Lakes to the Atlantic Ocean and ensured that New York would become the commercial capital of the young nation.

With any luck, the rollout of New York's extremely modest medical marijuana program will take less time than that.  But given the events of this week, it's possible I'm wrong about that.  Here's a cringe-inducing story about the official non-opening of two Syracuse locations which were slated to open this week.  This is my favorite part :

Even if the two dispensaries here did open today, it's unlikely they would have many customers. That's because the drug will only be available to patients with 10 serious conditions such as cancer, multiple sclerosis and HIV/AIDs.  And patients cannot get the drug unless they are approved by a doctor registered with the state. The health department says about 150 doctors statewide have registered with the medical marijuana program, but it has not released their names.

Read the italicized part.  Really?  I mean, seriously, really?  After 18 months, a state with 20 million people and a $1 trillion economy has managed to authorize 150 doctors -- and you can't get their names without a FOIA request?

The CEO of one of the new dispensaries is putting a game face on.  "If there is a registered patient in Syracuse," she said, "we will be ready to serve them.

Sorry, I'm making fun of this because otherwise I'd be throwing stuff at the office wall.


January 10, 2016 in Business, Medical Marijuana, State Regulation | Permalink | Comments (0)

Saturday, January 9, 2016

No Trademark for “THC Tea” . . . Because It Does Not Contain THC

AIt’s well known that applicants have stuck out repeatedly with the U.S. Patent & Trademark Office in trying to register trademarks for cannabis products.  The PTO reasons that because marijuana is illegal under federal law, that same federal law shouldn't be use to protect band names in an illegal product.  (Think of it like getting an actual trademark on "Murder, Inc.")

But marijuana culture is cool and edgy, so what about applicants who sell legal products but want to capitalize on the coolness of marijuana?

Well, they lost a round last fall in front of the Trademark Trial & Appeals Board, in a case involving something called "THCTea." The product itself had no THC in it, and therefore didn’t run afoul of the rules prohibiting trademarks for illegal substance. But because (again) it had no THC in it, the product ran afoul of the rules banning deceptive trademarks. The net result seems to be that you can’t get a trademark for a cannabis product, and you also can’t get a trademark for a non-cannabis product that pretends to be one.

Trademarks in this area are confusing, but Chicago lawyer Scott Slavick of Brinks Gilson & Lione has a very nice piece in Inside Counsel (free registration required) on the nuances of the THCTea case and the problems of deception in this area.  Recommended.

January 9, 2016 in Advertising, Business, Commercial Law | Permalink | Comments (0)

Thursday, January 7, 2016

New York Has First MMJ Dispensary; Patients Still to Come

AThe first medical marijuana dispensary in New York opened, as promised, with a ribbon-cutting this morning.  The Gothamist web site has the story, and a very nice photo essay on what the place looks like.  Check it out.

    New York City's first medical marijuana dispensary opened in Manhattan today at 212 East 14th Street, though it's unclear when it will actually start serving patients, as none had an appointment today. Thus far there are 150 doctors registered to provide patient certification in the state's medical marijuana program, and 51 patients have been certified, according to the Department of Health. There's no word yet on how many of those doctors or patients are in the New York City area.

    A registry ID card is required to get past the entryway of Columbia Care, located just off Union Square, and spokespersons at the opening this morning could not speak to whether any patients have successfully made appointments.

    The dispensary is cash-only and does not take insurance, as no plan currently covers medical marijuana. According to Columbia Care reps, patients will pay between $100-$300 in cash each time they pick up a new monthly prescription of tinctures, oil for vaporizing, or capsules. Smokable and edible forms of marijuana are prohibited under New York's law.

    Manhattan Borough President Gale Brewer, who attended the dispensary's ribbon cutting, said she hopes the state's dispensaries will eventually take insurance:

    “I’ve known many people who have been ill with HIV/AIDS, and over the years, they have — illegally at the time — have used marijuana that they purchased illegally. It solved their pain problems. I saw it with my own eyes, with very, very close friends.  We all look forward to having more dispensaries in the state, and insurance, because people have to pay now. But this is a very good beginning."

    There are security cameras in nearly every corner of the dispensary, as well as outside. The exterior security cameras are equipped with image-recognition and loudspeaker capabilities, meaning they can identify when someone standing outside the storefront is not an employee and ask them to stop loitering.

    But conducting any sort of heist would be quite a feat: Columbia Care is comprised of a series of rooms, each of which requires the presentation of a registry ID card to enter, and the THC products are locked up in staff-only restricted areas (and were not on view during the opening today).

    The dispensary is by appointment only, but will likely not be able to announce when it serves its first patient, due to privacy concerns. Columbia Care is currently the only medical marijuana dispensary in the city, but more are expected to open in Queens and the Bronx.

January 7, 2016 in Business, Medical Marijuana, News | Permalink | Comments (0)

Tuesday, January 5, 2016

Investigative Shocker: Big Tobacco Looking at Marijuana Biz

Marlboro MarijuanaWell, it's not exactly man-bites-dog, I suppose.  But an "investigation" by the Daily Caller suggests that tobacco companies -- who already sell paper tubes of dried plant material that provide a drug to users -- are indeed looking to capitalize when cannabis goes legal nationally.  The piece does have some interesting background.  Some highlights:

    Big tobacco, despite its conservative image since the 1970s, has been closely eyeing the marijuana market which venture capitalists regard to be worth $50 billion in annual revenues.

    Tobacco companies are now on a buying spree of e-cigarette companies which produce vaporizers, a smoking device marijuana users prefer because it can offer a higher high.

    . . .

    "We are in the business of relaxing people who are tense and providing a pick up for people who are bored or depressed," [said a 1970 Philip Morris memo]. . . . "The human needs that our product fills will not go away. Thus, the only real threat to our business is that society will find other means of satisfying these needs."

    . . .

    [Keith Humphreys, a professor of psychiatry and behavioral sciences at Stanford School of Medicine,] said big tobacco has a distinct advantage in marijuana production. "On marijuana, who knows better how to grow a plant that you dry up, wrap up in paper and smoke," he told TheDCNF. "They’re the masters of that worldwide and have wide brand recognition."

    Jonathan Caulkins, a professor at Carnegie Mellon University’s Heinz Center and co-director of RAND’s Drug Policy Center, told TheDCNF he believes the tobacco industry is privately looking at the legalization movement.

    "If you’re specifically in the tobacco industry, of course you should be paying great attention," Caulkins said. "It would be unfair to your shareholders if you didn’t at least watch with interest and probably should have several analysts working full time trying to think of different scenarios of how this could play out."

    Dr. Stanton Glantz of the UCSF School of Medicine and the American Legacy Foundation Distinguished Professor of Tobacco Control told TheDCNF, "They certainly would deny it if you asked them, but the reality is that tobacco firms are very well positioned."

    "They know how to make the product very well and very efficiently," Glantz said. "More important, they know how to engineer the product to maximize the addictive potential, which is something that the current marijuana enterprises probably aren’t as good at."

    . . .

    "Since at least 1970, despite fervent denials, three multinational tobacco companies, Phillip Morris (PM), British American Tobacco (BAT, including its US subsidiary Brown & Williamson [B&W]), and RJ Reynolds (RJR), all have considered manufacturing cigarettes containing cannabis," the UCSF researchers concluded.

    Glantz asserted tobacco companies "have the financial resources, product design technology to optimize puff-by-puff delivery of a psychoactive drug (nicotine), marketing muscle, and political clout to transform the marijuana market."

    As noted previously, big tobacco is buying up American e-cigarette companies with fervor.

. . .

    "For e-cigarettes, there is a huge crossover in e-cigarette use between marijuana and tobacco," Glantz told TheDCNF.

I suspect that a lot of non-tobacco businesses are also interested.  Do we think that Frito-Lay and Kraft, for example, haven't at least thought about the potential of cannabis-infused edibles"? 

January 5, 2016 in Business, Decriminalization, Drug Policy, News, Recreational Marijuana, Stocks | Permalink | Comments (0)

Monday, January 4, 2016

Maryland City Takes Equity Stake in Cannabis Dispensary

Kayla Brown 2by Kayla Brown

An Arizona company in November won approval from a town in Maryland to open a cultivation in exchange for offering the city a 5% equity stake in the company.  Residents of Hancock, Maryland (pop. 1,545) were split between excitement over the increased funding and feeling bribed into gaining an advantage for one of the limited number of Maryland licenses.  Lawyers reviewed and addressed the legality of this type of agreement and city officials signed the agreement with Harvest, Inc., in early October.

The State of Maryland is offering 15 growing licenses to the entire state and over 400 applications have been received. The CEO and president Harvest, Steve White said the agreement with the town is not a bribe because it is the state and not the city that determines who gets the 15 growing licensees for all of Maryland. While the agreement with the town does not necessarily seal the deal, they will more than likely be granted a license based heavily on the agreement.

Because marijuana is still federally illegal, states like Colorado and Washington have had to be very careful with cities that do not want legalization in order to sidestep the preemption issue. To have a city that is not only willing, but also invested in a certain company obtaining a license illustrates to officials that there is one less city for them to worry about. It also starts a trend that gets cities on board one way or the other. Currently, Colorado applicants are restricted to a mere 33% of the state allowing operations in their city. In Washington there are zoning disputes left and right because the state law does not expressly prohibit cities from opting out of the state law, and thus cities are finding every way they can to keep these licensees out. If cities were able to bargain reasonably and not extort licensees I could imagine those currently suffering through zoning disputes would gladly offer up 5% equity in exchange for operating under the support of the City.

But how conscionable it is for cities to receive tax benefits from the State from sales generated by retail sales as well as a 5% equity on a cultivation company, just for the ability of the company to operate as normally as any other business would?  The facility White anticipates for his cultivation is gated and all operations take place inside of a large manufacturing plant. There is no eyesore, noise, or other operating conditions which would even merit an additional permit from the city, and yet the company still felt the need to ensure a harmonious relationship by way of a 5% equity. That is unsettling for owners of cannabis businesses, most of whom are mom and pop start-ups with limited start-up capital. The tax revenue generated by retail sales alone should be enough to encourage cities to be supportive, and welcoming to these new highly profitable businesses.

Kayla Brown is a 3L student at Texas A&M Law School and is the Executive Director of the Texas Cannabis Industry Association.

January 4, 2016 in Business, Local Regulation, Medical Marijuana, News | Permalink | Comments (0)

Wednesday, July 1, 2015

"I Got A Marijuana Prescription And Pot In Minutes Without Leaving My Couch"

Following up on yesterday's note about California's new diagnose-and-deliver marijuana operation, known as Eaze, Forbes has a story on how it seems to be working.  Short version:

    Within an hour I used Eaze to video conference with a doctor, receive a marijuana recommendation and purchase an eighth of an ounce of “Sour Diesel” for delivery. The cannabis arrived shortly after the sausage and pepperoni pizza I had ordered to accompany it.

July 1, 2015 in Business | Permalink | Comments (0)

Tuesday, June 30, 2015

Adam Smith Predicted This Would Happen

People often like to mock Adam Smith’s "invisible hand," by which answers to people’s urgent needs appear almost magically as a result of other people’s urgent quest for more money.  If you’ve found it time-consuming to go to a physician to get your medical marijuana card, found it outrageous to pay up to $100 for the privilege, and boring to have to go to a dispensary to get your weed, the miracle of capitalism is right around the corner with a solution:

    Marijuana delivery startup Eaze will now let you get a medical marijuana card via smartphone.

    Rival service Meadow claims to Uber over a doctor (mine actually came on a skateboard), but Eaze seems to be the first dooby delivery startup able to hand out a legal cannabis card through EazeMD, its new video phone conference service.

    "You need to actually send a driver to deliver consumer goods, but there’s no reason you should have to actually dispatch a doctor and it really just streamlines the process," founder Keith McCarty said.

    Indeed, it does. California state law has traditionally required those wanting to get a state-issued cannabis card to travel to a designated clinic, pay $100 or more and then wait a few days for their card. EazeMD replaces that process with technology that finds the next available weed doctor from a third-party service.

    EazeMD has also lowered the cost to $25 and reduced the time it takes to minutes so those without a marijuana card, but "in need" of "medicine" at, say, a friend’s house on Saturday night around 11, can dial up a selection of available doctors on EazeMD and start chatting.

    EazeMD issues the new card electronically to the "patients" smartphone and then moves them to the Eaze platform where they can order and get "medication" delivered right to wherever they are in less than 15 minutes, according to McCarty.

    Weed-as-a-service startups like Eaze, Meadow and more than half a dozen others that have popped up in the last year face numerous legal barriers to operation. Getting a card that fast doesn’t seem legit.

    Maybe it is?

Better, faster, cheaper.  That's capitalism.

June 30, 2015 in Business | Permalink | Comments (0)

Tuesday, June 16, 2015

Colorado Employers Can Fire Workers for Medical Marijuana Use

Colorado employees who demand drug-free workplaces can fire employees who test positive for marijuana, even if the employees have a medical marijuana authorization and consume the weed in their off-duty hours.

That's the ruling in Coats v. Dish Network, a much-watched decision, in which the Centennial State's highest court upheld an earlier decision by the state's court of appeals.  The unanimous opinion (Justice Monica Márquez did not participate) was written by Justice Allison Eid, a former law professor.

At issue in the case was a state law prohibiting employers from terminating employees for engaging in "lawful" activities in their off-hours.  The plaintiff argued that using marijuana was "lawful" under Colorado law.

The decision is a pretty straightforward application of statutory construction.  The court finds that the word "lawful" means "not . . . prohibited by law."  Marijuana possession is explicitly prohibited by federal law --  the Controlled Substances Act -- and so would generally not be considered "lawful."  The court went on to consider whether the legislature, in using the word "lawful," meant only things prohibited by Colorado law.  But the language, the court found, is not restricted.  Ordinarily, something is not lawful if it is prohibited by any level of government.  Thus, employers presumably can fire employees for engaging in federal crimes (such as tampering with the U.S. mail or violating customs laws) that are not expressly illegal under state law.

The case is a blow to MMJ patients whose employers have drug-free workplaces.  They will have to decide whether to use their medication or find alternate employment.  It's a win for employers who face pressure from the feds to be drug-free and faced the possibility of being whipsawed between state and federal law.

Because the court's opinion involved interpreting a statute, the Colorado legislature could reverse the decision simply by passing a new law saying that Coloradoans cannot be fired for using medical marijuana on their own time. 

June 16, 2015 in Business, Legislation, Medical Marijuana, State Regulation, Workplace | Permalink | Comments (1)

Tuesday, June 9, 2015

Marijuana Investing Still in Wild West Mode

A lot of people are going to make a lot of money in the marijuana industry.  The trick is, of course, fis separating the winners from the losers.  The Wall Street Journal, in a new piece, Buying Legal-Marijuana Stocks: Just Say No?, highlights the extreme riskiness of many marijuana investments, including some that are little more than scams.  But money is slowly but inexorably moving into the industry: 

    Author Bruce Barcott says interest from wealthy individuals in investing in  cannabis  has shot up.

    There are funds, open only to wealthy investors, that specialize in marijuana-related securities, though they won’t speak publicly, for fear of violating accredited-investor solicitation rules and rules about marijuana. High Times Growth Fund, for one, linked to the High Times media brand, has a website with little information other than email addresses and a cannabis leaf.

    Marijuana Investment Co., also open only to accredited investors, focuses on providing investment access to an ETF-like portfolio of marijuana-related assets, says  Alan Brochstein, a financial adviser who runs the newsletter 420 Investor and designs marijuana-based model-portfolios for his subscribers. The company says it is planning to file for an initial public offering, and has invested in the Marijuana Index, which tracks listed companies in the sector. The index launched by tracking six stocks just two years ago, but now tracks 200 with a combined market value of $6.9 billion.

    Mr. Brochstein’s own model portfolio of marijuana stocks provides a look at the many subsectors: a 19% allocation to Canadian licensed producers; 18% to vaporizer smoking devices; 14% to  GW Pharmaceuticals,  a listed British biopharmaceutical company that makes cannabis-based medication; 14% to grower supplies; 9% to cannabis concentrates; 7.5% to air-control and lighting for indoor cannabis growers; 4% to cannabis-based biotech; and the remainder in cash and technology.

    Inevitably, mutual funds and exchange-traded funds will look at opportunities in marijuana-related businesses. When that happens, investors who object to such businesses may want to look closely at the holdings of any funds they invest in, as investors do who don’t want to own liquor or conventional-tobacco stocks.

    "I don’t think there will be funds and ETFs in the cannabis sector for at least a couple of years," says Mr. Brochstein. "Liquidity in this space is poor, so mostly you have over-the-counter stocks trading publicly."

    Despite the lack of liquidity, investors are curious. Mr. Barcott says companies that help wealthy individuals invest in cannabis have gone from holding small seminars to "renting out hotel ballrooms."

    Legal sales of marijuana are expected to quintuple to as much as $8 billion in 2019 from $1.6 billion in 2013, according to forecasts from trade publication Marijuana Business Daily. Founding editor  Chris Walsh says his publication predicts that more stocks will move to major exchanges, where disclosure and company liquidity is more regulated, in the next two years.

June 9, 2015 in Business | Permalink | Comments (0)

If You Build It, They Will Come

News from the Rocky Mountain State:  Colorado sees 1st camp resort for pot users:

Colorado is full of all-inclusive ranch resorts where guests hike, fish, play horseshoes and roast marshmallows. This one has a new offering - smoking pot.

The 170-acre CannaCamp opening July 1 in Durango in southwest Colorado calls itself the nation's first cannabis-friendly ranch resort.

Guests won't be given marijuana, because that violates state law. Instead, the resort allows guests to bring their own pot and use it while at the resort.

In addition to horseshoes and hiking, guests are offered yoga sessions and workshops on marijuana cultivation.

"We're bringing an element of luxury to that adventurous, exploratory vibe of childhood summer camp -in a beautiful setting where visitors can enjoy marijuana in a safe, comfortable, social environment," Joel Schneider, head of the management group opening CannaCamp, said in a statement.

Guests stay in cabins that allow smoking on porches but not inside. Rates start at $395 per person per night, with a three-night minimum.

Expect more of these.  A number of half-full motels around the state could probably get on the bandwagon with lower prices and shorter minimum stays.  Unlike dud ranches, they'll also be in pizza delivery range, which is probably important.

June 9, 2015 in Business | Permalink | Comments (0)

Wednesday, April 15, 2015

Is There Anything It Can't Do?

From The Times (London):  Cannabis treats for canines could ease pets’ pain.

    The cannabis industry, driven by the easing of drug laws across the US, is turning its sights on a new group of potential users — ill and elderly dogs.

    The “pet-pot” market is new but shows promise, its pioneers say. Products already available include “Treat-ibles” — canine snacks infused with CBD, or cannabidiol, a non-psychoactive compound derived from the cannabis family.

    Auntie Dolores Kitchen, the company behind Treat-ibles, suggests that CBD could be used on dogs to suppress nausea, induce appetite and to manage pain and mood disorders.

    Researchers believe that CBD could have medical applications for humans, including treating severe epilepsy.

    The dog treats, which cost $22 for a box of 40, do not contain THC, the compound that gets cannabis users high.

    The company’s website says that the absence of THC makes Treat-ibles “completely legal as a hemp-derived product”. Hemp and cannabis belong to the same family but the US government defines hemp as having less than 0.3 per cent THC. A higher concentration means that the plant is regarded as cannabis, illegal under federal law.

    Other American companies offering “pet-pot” products have received letters from federal regulators, warning them that they are breaking the law by selling unapproved drugs. However, the legal landscape could be shifting. In Nevada, a bill is being considered that would grant access to medical cannabis for pets. The proposal comes as a growing number of American states relax local cannabis laws. Nevada is one of 23 states where medical pot is legal.

If PETA figures out that marijuana bans equal animal abuse, things will really start to happen.

April 15, 2015 in Business, Medical Marijuana | Permalink | Comments (0)

Tuesday, March 24, 2015

"A Pirate's Life for Me!"

The rush to get into the marijuana business has a lot in common with every other gold rush in history: some people are going to get extremely rich, but most people are going to wind up losing their shirts.  There are legitimate MJ-related businesses out there with solid business plans and good management, and some of them will wind up making money over the long haul.  There are also plenty of businesses whose owners, however honest and well-intentioned, are simply incompetent.  A few of those will become successful just by dumb luck.  And then there are some that are simple frauds.

The problem is always telling which is which.  It's a "pirates' game" out there:

    Pot smokers have a reputation for being laid back. But in the US, the pot market is anything but mellow. Legal sales of cannabis - it is legal for medical use in 23 states and for recreational use in four - grew 75 per cent last year to reach $US2.7 billion, according to ArcView Group. ArcView expects that 14 more states will legalise recreational use in the next five years.

    The stock market offers few ways to catch the buzz. Cannabis is still illegal at the federal level in the US, which means that companies profiting from cannabis are unable to get loans from FDIC-insured banks, and are often limited to state-specific markets. Most public marijuana companies are penny stocks traded on OTC markets. Some are prone to manipulation. Last May the US Security and Exchange Commission published a warning of possible scams involving marijuana-related micro-cap stocks. In August the SEC charged several stock promoters for manipulating marijuana stocks. The Marijuana Index (US reporting), which includes 60 cannabis-related stocks, peaked a year ago - and has since lost three-quarters of its value. Bummer.

    The Marijuana Index includes biotechs that research cannabis-derived pharmaceuticals. But these are pricey. Nasdaq-listed Insys Therapeutics, whose drugs include a synthetic cannabidiol formulation, trades at 22 times forward earnings. London-based GW Pharmaceuticals, known for its cannabinoid MS drug Sativex, is deeply lossmaking and trades at 37 times revenues. 

    While publicly listed options are paltry, the private markets offer more excitement, as venture capitalists invest in early-stage cannabis companies. Founders Fund, a prominent VC firm led by Peter Thiel, recently led a $US75m fundraising round for a cannabis-focused private equity firm, Privateer. Marijuana remains something of a pirates' game, at least for now.

If you're an ordinary individual investor of modest means, keep in mind that if you are the one being asked to invest, it's because richer and more knowledgeable people have passed on the deal.  This doesn't mean that it's a bad deal -- lots of smart rich people passed on investing in some of the world's greatest companies -- but keep the odds in mind when you're putting your money down.

March 24, 2015 in Business | Permalink | Comments (0)

Bogus "Find a Law School Near You" Ad

This site (and the whole Law Professor Blog Network) is supported by advertising, and in general our advertisers are great people who you can rely on.  We don't have direct control over the ads, though, and therefore when a bogus one appears I'll try to warn you.

That's the case with the banner that says

Find Law Schools in Your City and Enroll New

This is simply false advertising, because in fact the web site has no links to law schools at all, and you can't enroll in law school online anyway.  The site asks for a lot of information from you before it even gives you the links to what it does have, which is mostly online colleges that have nothing to do with law.

If you want a free list of law schools with links, the Official Guide to ABA-Approved Law Schools is a great place to start.  If you want to know what law schools are in your area, here's a list of law schools by state.

March 24, 2015 in Business | Permalink | Comments (0)

Tuesday, March 3, 2015

Thoughts on the First Tribal Marijuana Conference

The event was a huge success.  The more than 300 guests nearly overflowed the Orca Ballroom at the beautiful Tulalip Resort, so much so that the fire marshal ordered that no more tables be brought in.  There was a mix of lawyers, advocates, policy experts, business people, and (most important) a large number of tribal leaders from around the country.

Doug Berman over at MLP&R did some live blogging during the morning after his opening panel ended.  I echo everything he says about the quality of the program.  I'm a professor, so I've sat through a lot of conferences in my time, and I've rarely been to one where the quotient of good information per hour of time was higher.

Perhaps the best thing about the event was its practical focus.  Marijuana-related events sometimes have a tendency to drop into rah-rah mode, and my sense was that the crowd in the room (based on where the applause came) was generally pro-legalization.  But the speakers themselves emphasized over and over that the devil is in the details.

At the lunch session, two veteran marijuana observers, Mark Kleiman of UCLA and Jacob Sullum of Reason magazine, emphasized some basic economic realities: in a legalized world the price of weed won't be anywhere near the current market price, and thus the vision of making several thousand dollars per plant is likely unsustainable.  Yes, there's potential profit there, but as in any commodity business it's likely to go to those who are the most efficient producers.

Perhaps the day's most informative panel -- at least for me -- was the one that featured two city attorneys who have been intimately involved in the hard work of making legalization systems work, Thomas Carr of Boulder and Pete Holmes of Seattle.  The sheer number of moving parts involved in the process is enough to make tribes wary.  Their advice:  Plan ahead.  Then plan some more.

In my view, the tribes considering marijuana sales face a conundrum.  Those who move first into sales will likely make a lot of money, given the current artificially high prices.  But they are also the most likely to run into the problems that come from hasty action and are most liable to any shifts in the political winds.  Those who take their time and plan carefully will avoid the problems, but by the time they act, increasing competition will have driven much air out of the price, and potential profits will be lower.

One possibility, though, is that in non-PL 280 states, tribes might be able to sell weed without complying with state regulate-and-tax schemes, and thus will continue to have a huge price advantage over potential competitors.  Professor Kleiman suggested that this would be "catastrophic," since tribes could thus upend carefully crafted state policies.  As I've said before, I don't view it as a bad thing -- it would be nice to see a capitalist industry grow up so that we can examine it in detail before we decide how best to regulate it.

I want to add that I was extremely impressed by the three lawyer-organizers of the event who served on the panels.  I'd never met Robert Odawi Porter, but after hearing him there's a reason he's regarded as one of the best in the country at tribal law.  And the two young lawyers from Harris Moure who covered business issues in the day's final panel -- Hilary Bricken and Robert McVay -- matched their knowledge of the issues with some thoughtful advice.  It's good to see this kind of capable representation growing up in the nascent business.

March 3, 2015 in Business, Decriminalization, Drug Policy, Law Enforcement, Local Regulation, Medical Marijuana, Recreational Marijuana | Permalink | Comments (0)

Sunday, March 1, 2015

Treasure Trove of Data Released by CO Department of Revenue

The Colorado Department of Revenue issued its first annual report on the performance of the regulated marijuana industry this past Friday — encompassing both the medical marijuana and adult retail markets.  Colorado was the first state in the US, and the first government in the world, to implement a regulatory system including both consumers and those who provide to them.

This report and those that follow will no doubt be the subject of a considerable amount of analysis (and spin) by both sides in the debate, particularly as more states consider similar laws.  

March 1, 2015 in Business, Drug Policy, Finance, Medical Marijuana, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Friday, February 6, 2015

Catching Up With MLP&R

It's been a crazy week, and I'm behind on noting a lot of stuff.  First, links to some good posts from Doug Berman at Marijuana Law, Policy & Reform, together with my thoughts:

US Surgeon General essentially states marijuana should not be a Schedule I drug.  This is long overdue.  Maybe the new attorney general, though she doesn't think pot should be legalized, could think about using her authority at least to move marijuana into the same category as, say, heroin.

Was Jeb Bush a significant marijuana dealer in high school?  I'm not sure I agree that the fact that Bush "sold" some stuff to a classmate who asked him for it means much.  At least when I was that age, the number of people -- even good friends -- who would give you stuff for free was pretty limited.  Maybe it was different at Andover.

Other than Senator Rand Paul, are any GOP leaders likely to become supportive of marijuana reform? I doubt it, not because there's not a good economic libertarian/states rights case, but because the issue is still way down the list of stuff that's important to voters, especially those in the center and right.  After all, we haven't seen Hillary Clinton spending much time talking about it.  If she does, the GOP will respond.  If Secretary Clinton, President Obama, and General Holder haven't felt any need to start pushing legalization to appeal to younger voters, I doubt any Republican candidates will do much about it.

Will vigorous opponents of marijuana reform back vigorous efforts to raise the legal age for tobacco?   I don't see much of a connection.  If you're mature enough to join the Army and maybe get killed, or agree to borrow $150,000 in nondischargeable student loans you'll be paying on for 20 years, or to get death by lethal injection for killing somebody, I don't see why you're not mature enough to decide if you should buy a pack of cigarettes.  Age 21 for marijuana is there because we already have age 21 for alcohol.  There's at least some justification for a higher age for booze and pot, because (unlike cigarettes) these things mess with your mind and can lead to very hazardous behaviors like drunk/stoned driving.

"Medical or Recreational Marijuana and Drugged Driving.  I'll second the recommendation for the article previewed, by Paul Larkin of the Heritage Foundation.   Mr. Larkin points out something I hadn't fully appreciated -- the potential unreliability of current blood-alcohol standards when those who are drinking are also using marijuana.  Check it out.

"DeWine: Marijuana legalization a 'stupid idea'"  The Ohio attorney general doesn't think much of the legalization proposal being pushed in the Buckeye State.  While I disagree with him on legalization, I do agree that Ohio's proposal -- a state-granted monopoly to the rich and politically connected, with all the potential for crony capitalism that entails -- is a bad way to do it.  I understand that other groups on the ground in Ohio are working on a better alternative, although the monopoly measure is the one that probably will have most of the money behind it.

February 6, 2015 in Business, Drug Policy, Federal Regulation, Law Enforcement, Legislation, Medical Marijuana, News, Recreational Marijuana, State Regulation | Permalink | Comments (0)

Thursday, February 5, 2015

Texas Cannabis Industry Launches at Fort Worth Event

TCIA-logoEverything is bigger in Texas.  And that was pretty much the general perspective of those who attended last night’s inaugural dinner of the new Texas Cannabis Industry Association, at the Sheraton Fort Worth.  California may have more people, but those who gathered for the event here in Cowtown were pretty uniformly convinced that the Lone Star State is going to be the key to the long-term success of marijuana in the U.S.

This was the kickoff of a series of events that TCIA has planned for the months ahead, and it was fun and exciting to be there at the inception.  The initial group included entrepreneurs, investors, veteran business people looking at new markets, and longtime advocates.  For a business law guy like me, seeing the passion of nascent entrepreneurs was exciting, and hanging around investors who tended to be as enthusiastic about social change as they are were about making money was just as fun.  I’m one of those who sees free enterprise and reasonable regulation as the best ways to get rid of the harms caused by prohibition, and that’s pretty much the feel I got from the whole group.

It was especially gratifying to see this new industry group taking shape at the Sheraton, right across the street from Texas A&M Law School.  The incredible group of law student cannabis activists we’ve got at A&M – who banded together as the Cannabis Legal Network – played a significant role in helping the organization get going.  One of them, Kayla Brown, is the TCIA’s first Executive Director.

I definitely want to give the group a plug.  If you’re a business or group interested in legalization, and you can see the potential in the country’s powerhouse economy, think about joining up.

February 5, 2015 in Business | Permalink | Comments (0)