Cannabis fund pitches weed at the Waldorf

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It was high times at a high society hotel on Wednesday when a new cannabis-focused private equity fund took its fundraising pitch to a big agricultural conference at New York’s Waldorf Astoria.

The High Times Growth Fund aims to raise $200m to $300m to invest in the legal marijuana industry, which is projected to reach sales of $2.6bn in the US this year. Twenty-two states allow medical use of the drug, and Colorado and Washington have legalised recreational sales.

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“I don’t see any way this isn’t going to be, from a dollar value, one of the larger if not the largest crop out there,” said Ben Zaitz, a longtime dairy farmer and agricultural investor who is a partner in the fund. By comparison, the USDA estimates US corn farmers will take home $49bn this year.

Addressing a ballroom of investors at the Global AgInvesting conference amid presentations from Macquarie and Deloitte, Jordan Lewis, another partner, said: “Hopefully this is the beginning of a change in acceptance of cannabis in the agriculture industry and elsewhere.”

Mr Lewis, founder of Silverpeak Apothecary in Aspen, Colorado, and Mr Zaitz have joined Michael Kennedy, general counsel of High Times, the New York magazine that has long advocated for legalisation, to tap into what Mr Lewis called “one of the most promising and least understood opportunities in agriculture and medicine in my generation”.

The fund will invest in start-ups and existing businesses in three areas: growing and selling cannabis, plant genetics and propagation, and associated services.

The partners plan to use Silverpeak’s vertically integrated retail and growing operation as a model in places such as Nevada, where medical marijuana recently became legal, as well as in other states that legalise recreational use in future.

“Our role is to get the cannabis industry to step up and meet the requirements of the recreational market,” said Mr Zaitz. “If this is the next agricultural sector, how do we create the supply chain that exists in rice or dairy to deliver a high-quality product in a renewable, sustainable manner with traceability?”

In addition to capturing a larger slice of a legal pot market that Arcview, a cannabis investor network, projects will reach $10bn by 2017, the High Times partners are eyeing other opportunities. Genetic testing will be used to identify strains that compete with other drugs such as sleep aids, on which Americans spend $22bn every year.

“That will persuade the rest of the doubting Thomases that this is a viable and valuable opportunity,” Mr Kennedy said.

The fund was conceived at High Times, where, Mr Kennedy says, following votes to legalise cannabis in Colorado and Washington in 2012, the phones began ringing with entrepreneurs looking for seed money for their businesses. The magazine is not an investor.

The budding industry has been plagued by a lack of capital because most banks are wary of doing business with anyone who handles a drug that is still illegal under federal law. That has left many state-sanctioned businesses, including Silverpeak, dealing in cash.

More than 80 per cent of cannabis related start-ups are self-funded by their founders, with just 3 per cent of funds coming from venture capital and 5 per cent from angel investors, according to Mr Lewis.

“Our natural lifespan without access to capital was getting constrained,” he said. “This will fill that vacuum and provide resources to ourselves and other entrepreneurs.”

The partners struck their deal over breakfast at the Four Seasons in Denver during the annual Cannabis Cup, an industry expo, on April 20 – a day marijuana aficionados celebrate as “4/20”.

Their enthusiasm for cannabis is tempered with a dose of realism. Half of Colorado’s medical marijuana businesses have shuttered in the last five years, Mr Zaitz said – a statistic Mr Lewis also cited in his presentation to the conference.

“If we build a good business with a good management team then the market will reward us,” said Mr Zaitz, but he added: “To think this is some kind of a gold mine isn’t a good bet.”

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Cannabis fund pitches weed at the Waldorf

Hearing on marijuana decriminalization prompts fears of congressional interference

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A House committee has scheduled a hearing for May 8 on a recently passed law decriminalizing marijuana in the District — a move viewed with suspicion by local lawmakers who fear it may signal Congress‘ first step in attempting to overturn the legislation.

Delegate Eleanor Holmes Norton, the District’s nonvoting congressional representative, said Wednesday that she will testify at the hearing before the House Oversight and Government Reform Committee’s subcommittee on government operations. A list of others who will testify was not available from the committee, though Ms. Norton said other local officials will participate.

The D.C. Council and mayor signed off on legislation this year that makes possession of 1 ounce or less of marijuana punishable by a civil fine of $25 while preserving criminal penalties for smoking pot in public. The legislation was transmitted to Congress on April 8 and is currently under a period of congressional review, a standard for most locally enacted laws.

Members of Congress could potentially derail the law by filing a disapproval resolution, though the difficult task would require approval in the House and Senate and the signature of the president. If no action is taken to otherwise block the law, it is estimated to take effect on July 18.

But as Congress has a history of interjecting itself into local affairs in matters related to marijuana — a congressional rider postponed implementation of the city’s medical marijuana program for more than a decade — officials are skeptical of the motives.

“The hearing on D.C.’s decriminalization legislation is a unique and inappropriate overreach by Congress, targeting the marijuana laws of only one jurisdiction in a hearing before a national legislature,” Ms. Norton said in a statement. “We will insist on our rights as a local jurisdiction to be treated in the same way as the 18 states that have decriminalized marijuana and the two that have legalized marijuana.”

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Hearing on marijuana decriminalization prompts fears of congressional interference

Medical marijuana backers attack foe's statements

TAMPA ­­— Advocates of the constitutional amendment to legalize marijuana for medical use criticized the choice of leader for a new committee opposing the amendment, citing statements attributed to him in 1986 as a Reagan administration drug adviser that marijuana use can cause homosexuality and therefore, AIDS.

Carlton Turner denies he made the statements and contends that widespread reporting of them, which generated a furor at the time, is an attempt to destroy his reputation.

“The newly formed Drug Free Florida committee has somehow managed to choose as its chairman a messenger with even less credibility than its message,” said a news release from the United For Care Organization, which is backing the amendment.

Turner “once stated that marijuana ‘leads to homosexuality…and therefore to AIDS.’ This statement is as offensive as it is inaccurate and should call into question any claim made by Mr. Turner in the course of this campaign.

“There is no place for bigotry and ignorance in the debate over compassionate medical marijuana policy in Florida.”

Turner responded, “I never said it,” calling the accusation “so outrageous it probably doesn’t deserve a response.”

The quote came from an October 1986 Newsweek magazine story headlined, “Reagan Aide: Pot Can Make You Gay.”

In the story, Turner doesn’t say exactly that. But he does say, in paraphrase, that when he visits drug treatment centers for patients under 18, some 40 percent have engaged in homosexual activity.

He’s then quoted directly as saying, “It seems to be something that follows along from their marijuana use,” and, “My concern is, how is the biological system affected by heavy marijuana use? The public needs to be thinking about how drugs alter people’s lifestyles.”

The article then attributes to him the statement that marijuana can depress the immune system, making someone more vulnerable to AIDS, though he adds in the piece, “No one is saying that marijuana will cause AIDS.”

In an interview Wednesday, Turner said the report was a distortion of his comments that parents of children with drug abuse problems “have to be aware of things in their kids lives they won’t approve of, including homosexuality,” when dealing with drug abuse.

“I never said smoking marijuana will make you gay — I said if you’re in the subculture, you’re going to be exposed to this.”

He said he also linked drug abuse to AIDS “not because drug abuse caused it,” but because AIDS sometimes came from needle sharing.

He said “the drug culture” wanted to destroy him because of his work on the issue in the White House.

“If you don’t have anything to talk about you stoop to personal castration.”

In any case, the Newsweek story caused a furor among AIDS and gay rights advocates and drug treatment experts. Turner denied the thrust of the story in an Oct. 22, 1986, interview with The Washington Post.

What he actually said, Turner told the Post, was, “We (should) accept this fact and help the kids and the parents deal with it.”

But at the time he appeared to stand by a link between marijuana and homosexuality when he told the Post, “When you talk to young people who use drugs, you find their inhibitions against everything are gone. This is one of the things that goes along with it.”

The Newsweek reporter, meantime, acknowledged to the Post that the headline on her story was an exaggeration, but stood by her reporting of Turner’s comments.

Turner resigned his position as an assistant to Reagan for drug abuse policy a few weeks later, in December, 1986.

It’s been reported he did so because of controversy over the comments, but he denied that in the Tribune interview.

He cited a passage in “The Reagan Diaries,” a compilation of Reagan’s personal notes, in which the president described Turner’s resignation as a factor of the long hours he worked and losing contact with his two young children.

He said he resigned after his request to move to a job with fewer hours and less responsibility was turned down, and that First Lady Nancy Reagan, known for her interest in drug abuse issues, “was very upset with me for resigning, but I told her I’m very tired, I needed some rest, needed to spend more time with my children.”

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Medical marijuana backers attack foe's statements

Cannabis factory discovered in Collier Row as police seize pit bull

Sam Gelder Wednesday, April 30, 2014
1:54 PM

Police have uncovered a cannabis factory in a property where they also seized a pit bull type dog.

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A 48-year-old man has been arrested after officers executed a warrant at an address in Collier Row on Saturday following reports of the animal being kept there.

During their search they uncovered a cannabis factory in a back room with 20 mature plants found growing in tents inside a locked room.

The man was arrested on suspicion of cultivating cannabis and possessing a fighting dog, before being bailed until May.

Havering’s Wildlife officer, Anthony Kiddle is investigating and enquiries continue.

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Cannabis factory discovered in Collier Row as police seize pit bull

Hemp: The Emerging Crop In The Global Economy

Ross Reynolds speaks with Doug Fine, a self-described comedic investigative journalist, about his new book, “Hemp Bound: Dispatches from the Front Lines of the Next Agricultural Revolution.”

Fine spoke with scientists and farmers around the world about how hemp is used. In February, President Obama signed the Farm Bill, which allows industrial research on hemp.

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Hemp: The Emerging Crop In The Global Economy

DEA chief says marijuana-trafficking spiking in states near Colorado

The Drug Enforcement Administration is concerned about a surge in the illegal shipment of marijuana from Colorado since the state legalized the drug, and is trying to crack down on the use of the substance by minors, the head of the agency said Wednesday.

Administrator Michele Leonhart said the DEA is troubled by the increase in marijuana trafficking in states surrounding Colorado and worries the same phenomenon could be repeated around Washington state, where the legalized sale of recreational marijuana is expected to begin soon. In Kansas, she said, there has been a 61 percent increase in marijuana seizures coming from Colorado.

Speaking to the Senate Judiciary Committee, Leonhart also said that the softening of attitudes across the nation about the risk of marijuana has confirmed some of the agency’s fears.

“The trends are what us in law enforcement had expected would happen,” she said. “In 2012, 438,000 Americans were addicted to heroin. And 10 times that number were dependent on marijuana.”

The Obama administration in August released a memo saying it would not challenge the laws legalizing marijuana in Colorado and Washington state as long as the two states maintained strict rules regarding the sale and distribution of the drug. In the memo, Deputy Attorney General James M. Cole stressed that marijuana remains illegal under federal law.

The Justice Department directed federal prosecutors not to target individual users, but instead to focus on eight areas of enforcement. Those aims include preventing distribution of marijuana to minors, stopping the growing of marijuana on public land, keeping pot from falling into the hands of cartels and gangs, and preventing the diversion of marijuana to states where it remains illegal.

DEA officials have expressed frustration privately about the legalization of marijuana by Colorado and Washington state, where local officials see the change in the law as an opportunity to generate tax revenue and boost tourism.

But in January, James. L. Capra, the DEA chief of operations, publicly called marijuana legalization at the state level “reckless and irresponsible,” and warned that the decriminalization movement would have dire consequences.

“It scares us,” James L. Capra said during a Senate hearing. “Every part of the world where this has been tried, it has failed time and time again.”

Two years ago, nine former DEA administrators wrote a letter to Attorney General Eric H. Holder Jr., expressing their concern about the state movements to legalize marijuana and urging him to publicly oppose the ballot initiatives.

“To continue to remain silent conveys to the American public and the global community a tacit acceptance of these dangerous initiatives,” wrote the former administrators, who oversaw the DEA under both Democratic and Republican presidents from 1973 to 2007.

On Wednesday, Leonhart also spoke about why she believes marijuana is dangerous.

She said that marijuana-related emergency-room visits increased by 28 percent between 2007 and 2011 and that one of every 15 high school seniors is a near-daily marijuana user. Since 2009, she said, more high school seniors have been smoking marijuana than smoking cigarettes.

Marijuana advocates say that the concerns about the danger of marijuana are overblown. In an interview with The New Yorker magazine, President Obama compared the use of marijuana to drinking alcohol.

“As has been well documented, I smoked pot as a kid, and I view it as a bad habit and a vice not very different from cigarettes that I smoked a s young person through a big chunk of my adult life,” Obama said. “I don’t think it’s more dangerous than alcohol.”

Leonhart also spoke out in support of mandatory minimum sentencing for drug crimes, an issue that Holder has highlighted recently as part of his initiative to reduce prison crowding and foster equity in criminal sentencing.

Holder has instructed his 93 U.S. attorneys across the country to use their discretion in charging low-level, nonviolent criminals with offenses that impose severe mandatory sentences.

“Having been in law enforcement as an agent for 33 years [and] a Baltimore City police officer before that, I can tell you that for me and for the agents that work at the DEA, mandatory minimums have been very important to our investigations,” said Leonhart, in response to a question from Sen. Charles Grassley (R-Iowa). “We depend on those as a way to ensure that the right sentences equate the level of violator we are going after.”

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DEA chief says marijuana-trafficking spiking in states near Colorado

Northampton medical marijuana dispensary to offer 70 products; pledges to be good neighbor

NORTHAMPTON — Two men from eastern Massachusetts and Colorado said Tuesday they’re on track to open a medical marijuana dispensary at 118 Conz St. in Northampton by Sept. 1.

Kevin Fisher and Arnon Vered are principles of New England Treatment Access (NETA), one of 20 non-profits granted a medical marijuana license by the Massachusetts Department of Public Health (DPH) in January. NETA has been approved to open dispensaries in Brookline and Northampton, and to establish a grow room in the town of Franklin.

Fisher, 37, is from Steamboat Springs, Colo., where he operates a medical marijuana outfit called Rocky Mountain Remedies. That organization consists of 50 employees at one retail location, six cultivation sites, and an “infused product” manufacturer, according to NETA’s DPH application [pdf].

Fisher serves as executive director and CEO of NETA, and says he now plans to spend most of his time in Massachusetts getting the new operation started.

Pot Purveyor Promises 70 Products & Good Neighbor Policy by mserreze

Vered, 39, is from Swampscott, with a background in the banking industry. During the past year, Vered has shifted his focus to the administration of medical marijuana organizations, visiting Israel to investigate best industry practices, according to the DPH application. Vered serves as NETA’s chief financial officer.

Tuesday evening, Fisher and Vered opened their space, still under construction, to the public. The occasion was a forum on the future of Pleasant Street led by the city’s planning department. The forum entitled “Pleasant Futures” drew more than 100 participants who came to share their ideas about the busy corridor leading from I-91′s Exit 18 to Main Street downtown.

As forum participants broke into work groups, Fisher took a moment to explain what NETA will offer and how the dispensary plans to fit into the neighborhood.

Fisher said the Registered Marijuana Dispensary, or RMD, will offer up to 70 products within six months of its launch. Aside from traditional marijuana, he said the dispensary will peddle “tinctures, lotions, balms, vaporizer solutions, sodas, edibles, concentrates,” as well as “CBD-based therapies that can’t even intoxicate the user.”

Legislators in at least a dozen states have passed or are considering bills to legalize non-psychoactive Cannabidiol (CBD) oil made from marijuana plants, facing pressure from parents of children who suffer from epilepsy and other disorders.

Fisher said the dispensary plans on being a good neighbor by operating a clean and attractive business and attending to security.

“The nature of this business is you must have a recommendation from your physician and you must have your state certification. People off the street can’t just walk in,” he said.

Fisher said the building will deploy a “man trap” where clients are buzzed into an area where their credentials are checked before they are let into the locked dispensary area.

He promised the enterprise will “keep the landscaping nice and pay our taxes,” will not be noisy and will keep reasonable hours.

“There’s not going to be active diversion in the parking lot,” Fisher remarked.

The single-story brick office building is the former site of Pioneer Valley Family Medicine, which moved to King Street last year.

Ward 3 Neighborhood Association President Bob Reckman, on hand for the “Pleasant Futures” planning event, had nothing but praise for the nascent dispensary operation.

“I think it’s a great thing for Northampton, for Ward 3, and for the citizens of Massachusetts,” said Reckman.

NETA is receiving a $9 million loan from Howard Kessler of Boston. Of that, $3.8 million will go to capital costs at NETA’s three locations, with $500,000 allocated at the Northampton site. The remaining $5.2 million will go to operating costs until NETA breaks even.

In its first year of operation, NETA hopes to net more than $700,000, assuming 1.6 ounces per patient per month and a price of $4,800 per pound. Projected revenue is $9.8 million for 2015, reaching $19 million by 2017, NETA states in its DPH filings. The dispensary hopes to reach a peak patient level of 3,200 in 2016.

Northampton passed a resolution in November 2013 expressing support for hosting a medical marijuana dispensary. In that month, the city also adopted zoning that allows dispensaries where new physician’s offices are located, with requirements keeping them 200 feet from schools.

Leslie Laurie, President and CEO of Tapestry Health in Northampton, will serve as NETA’s Director of Patient Services. Former Democratic Congressman Barney Frank is on the payroll, serving as NETA’s Director of Government and Community Relations. Veteran Colorado purveyor Russel Wise will serve as Director of Production.

NETA’s director of Science and Research is listed Dr. Raphael Mechoulam, an Israeli scientist credited as the first researcher to isolate and synthesize tetrahydrocannabinol (THC), the main active principle in cannabis.

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Northampton medical marijuana dispensary to offer 70 products; pledges to be good neighbor