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[Table] IamA CEO & Partner of one of the world's first legal marijuana stores (license # 37) in Denver, CO AMA!

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Date: 2014-01-01
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Questions Answers
Can anyone buy or do you have to fulfil certain criteria? I am from England so not looking to buy. Anyone over 21 with a valid ID (includes a passport).
How did you decide to get into the marijuana field. Were you doing this previously but illegally/frowned upon by the state? & Congrats on your license! I have been a patient since before medical cannabis was legal here. I have been making my own cannabis medicine for about 15 years now. I had a professional career in a corporate environment that, while sometimes challenging, was not making me happy. I was also a professional photographer on the side. About 6 years ago I decided to quit my corporate gig and grow cannabis/take photos full time. It was a huge leap and everyone thought I was crazy (left an amazing job running a great and successful company). Then the cannabis caregiving just basically took over. The demand has always completely outstripped my ability to grow our company.
Colorado here - what were your start up costs? How long until you were in the black? Are you happy with your decision to leave your corporate job and would you do it again? Hi Colorado, Wow, that is a large question. The "start up" is still happening over 4 years later. The industry is fluid and extremely expensive. My wife and I started the business with less than $75k (everything we owned at the time, and a bit more in the form of friends and family loans). Since, we have put basically everything back in. We didn't really get on payroll officially until about this time last year. I'm sure we have put over a million in by now (don't have actual figures with me at the moment and I try not to think about it to be honest lol). I am generally happy but there is a little joke in the industry that goes something like, "friends don't let friends buy/start a dispensary". It is the most highly regulated and taxed industry in the world. It is highly brain damaging. I could go on all day about the endless facets of compliance and how we get screwed at every turn. I also get to help a lot of people improve their quality of life, and when I see a patient walking after being wheelchair bound (among countless other similar stories) because I helped them feel better, it makes everything worth while.
What are some of the more ridiculous regulatory and taxation issues you have to deal with? I don't even know where to start on this one. We can't write off expenses like other businesses do. Up to this point, we pay 30% on gross sales. We have to put a tamper proof tracking tag on a package to take it from one room in our facility to another, then put a different one on when it gets there (all on camera). The regulations for handling heroin is far less stringent for that of cannabis. I could literally go on all day on this one, but it hurts my brain, so i'll stop now.
Wow that's ridiculous. All that for something you're selling for recreational use??? Hopefully that will change when the novelty wears off. Actually that was all for medical. It appears that the IRS is going to allow a few more deductions ironically for recreational (and medical moving forward). One more thing I forgot to mention is that we can't have a bank account. That is also expected to change very soon.
You better buy a bigger mattress. I hope so. So far we have chosen to employ more people and pay ourselves only slightly more than our highest paid employees. We would like to keep it that way, so for me personally, it might take a while to get there.
You say you dont have a bank. Does your store accept cash only or do you take debit/credit card payments as well? Did all your start up money come out of pocket or was/is a loan possible? Cash only. We have a cashless ATM. Startup was mostly out of pocket and was everything we owned (plus some family only loans)
Is there a real threat of you getting busted by the federal government?? There is a threat if you don't follow one of the 8 major concerns the feds said they have regarding our little experiment. If you are interested, you can read the DOJ memo here Link to www.docstoc.com
Has any of the state laws or discussions for store owners addressed the federal government issue? The feds decided not to sue the states to stop legalization and instead are taking a hands off approach as long as we follow some logical (mostly) rules.
What will you do if in 2016 someone gets elected president who says they'll prosecute? I will make a judgement at that time based on the political environment and the potential outcomes. In other words if I can, I will fight it. I doubt any politician is willing to go up against one of the only issues in this country with bi-partisan agreement.
This is much the same approach that was taken in Montana. However, they did raid a number of legally operating dispensaries and seize all their equipment and funds. Do you think there is anything place to prevent that from happening in Colorado? Yes, Montana law was a complete POS. That is why that happened. Colorado law is specifically tailored around fed concerns.
I'm finding the whole interplay between state and federal laws fascinating. What is the procedure if the status of your license is challenged (suspended/revoked) with respect to the cannabis in inventory that you possess? There is no policy that covers criminal liability that I am aware of. By It's very nature, I assume such a policy would be illegal. Such a policy would conspire to remunerate someone in the event they were prosecuted and it is generally illegal to profit from your conviction. I assume we are tested regularly by federal agencies for compliance. If I was the DEA, I would just try to purchase illegally from us, and I'm sure they do. It is no accident that we are still open, I am a serious stickler for the rules. If one's license is revoked, the inventory is destroyed, by the agency doing the revoking.
How's business been today? I was waiting for this one. We actually decided not to start selling yet. This is a very complicated issue, but in short we didn't want to screw our medical patients so we are building the back end first, that way the patients who really need it will continue to have the meds they need.
When did the devil's lettuce first entrap you in her smoky green web? A friend of mine and I found his mom's pipe and we took it to school. That was 4th grade. We smoked a bowl with matches and everything in a ditch on the school grounds (remember it like it was yesterday). Didn't get high, or get busted somehow.
How many people do you guys bust that are under 21? do you think more underage kids go for alcohol or weed? Before today we sold to legal patients under 21. Things are changing though
Will medical patients under 21 still have access to cannabis from your venue? Great question. This is one of the reasons we decided not to open today for retail sales. Lets just say we are working very hard at great personal expense to be able to serve patients under 21(due to regulations that require changes to the building etc). Some of our sickest patients are under 21 and we feel a responsibility to them.
I am glad you are taking that approach. Best of luck to you. You're forging the paths of history. I'm proud to have been able to converse with you. Thank you for saying that. It makes me feel good to know people actually care, because we really take it seriously.
What are the requirements to get your license? And what qualifies you to be a consultant? The requirements are very extensive, in the hundreds of pages. Just too much to go into here. If you are interested, check out Link to www.colorado.gov This is a start, but not all our regs. What qualifies me is also a large question. In short, I am a professional cannabis horticulturalist, familiar with all cultivation methods. I build solutions for any technique (soil, soil-less,hydroponic,aeroponic etc). I build closed loop hydrocarbon extraction equipment myself and have extensive experience (15+ years) making water and solvent based extractions. I have created and developed over 30 unique cannabis infused products. I have a mastery of cannabis law and cannabis specific regulation that I have gained through navigating one of the first cannabis businesses, through to legalization. There is more, but I'm not trying to brag.
What's your favorite method of getting high? Such a good question. I love to drink medicated hot tea. I make all kinds of tea blends with medicated sugar. I would be happy to tell you how to make it later if you want.
That sounds amazing. I wish there was a cannabis recipe site / book. How to make different edibles using weed. There is.
Where do you get the marijuana from? We grow it ourselves. We also have a licensed grow facility.
We grow it ourselves. We also have a licensed grow facility. Is it difficult to grow marijuana? To grow it, no. To grow a lot of it well, yes.
In your personal opinion, do you feel that marijuana is a gateway drug ? No I do not. Spinning in a circle when you are 2-3 and you become aware that your consciousnesses can be altered, that is the gateway to drugs. Everything else is just a drug and cannabis is one of the safest, most productive drugs.
Do you think there is any potential for marijuana dispensaries to grow into larger, public companies or do you think they will continue to stay small, local stores? There is absolutely that potential and we have felt the pressure of big money for a while in the industry. It will get even harder for small operators to survive now.
How exactly do you verify IDs? Will you be recording customer info off of them and turning that over to some agency? 1.We will verify IDs the same way a liquor store does. We will likely use a scanning device and will record the information for tracking purposes internally through an encrypted and secure server (HIPAA compliant secure server), That information is used to prevent a person from purchasing beyond the daily limit and to provide proof to any law enforcement agency that all sales were legal. There is no list tracking your purchases though that any agency has access to.
How will labeling/testing go as far as THC content... CBD content, etc? The state is also licensing testing agencies and we will be required to test or slap a statement that says its not tested on the product.
Will you be selling bottles of Advil at the register? I am aware of the story and no. It is interesting, however we make no specific medical claims and have no interest in advancing any specific treatment agenda without further study.
I'll throw my personal recommendation behind Advil+Weed, having tested it... very scientifically ;-D. Nice!
How can I manipulate my diaphragm in order to boof rips? Breathe from your stomach not your chest cavity. Just like an opera singer. Not sure what I mean? See this video Link to www.youtube.com that is all.
Video length: 4:20. COINCIDENCE? No way. serendipity achieved.
If I wanted to start a low cost of entry business in the industry, what would you recommend? I would recommend starting a satellite business that does not involve actual cannabis. Possibly, a nutrient, organic pesticide formulation, or maybe concentrate accessories. Sell the miners the shovels.
Are you a smoker yourself? I am an ent.
How stringent is the "seed to user" paperwork? I understand that CO is interested in tracking production so they are able to levy taxes on all the Recreational sales and prevent "black market diversion." Is there any legal framework for the distribution/marketing of imported (out of state produced) marijuana? We, here in Humboldt are very closely watching your social experiment as it unfolds... there are some strong proponents here for a Humboldt "branding" (think of Napa Valley as for wine..) of our product for market exposure/penetration. How do you envision that playing out for the overall future of retail sales. And in that same thought, what do we need to do to have "AOC's" enacted for some of our "heritage" production areas? Wow, great question. I love that you are thinking about an AOC for Humboldt and any self respecting cannabis grower should be proud of the contribution tri county has made to cannabis development and anxiously await that AOC designation to preserve those contributions. I would say it is the Mecca of cannabis, but my loyalty to my state will not allow it. Unfortunately it will be a while for those dreams to become a reality. There is an enormous legal framework to be built before that is possible. First, CA needs to legalize recreational use. Everything that follows would take me a few hours to write. I would love to expand on this question. Maybe I'll come back to this one.
How come I freak out when I smoke? How old are you? Be honest, this will help me answer the question.
21 but I only smoked a few times. I just get like dizzy and paranoid and like I guess hallucinate a bit. If you are over 21 it is likely just a bit too much, or is the wrong cannabinoid profile for your brain chemistry. Try taking one hit only (i know it's hard) and make it indica. I think you will have a better experience.
Same thing here. 32 y.o. Smoked like crazy before but now I get panic attacks. I know your not a doc but only Harlequin doesn't give me panic attacks. Would love your input as you seem to be an extremely intelligent person. How often do you ingest cannabis and does that only happen when you smoke it?
About once daily. Smoke, vape and edible (only cheeba chew and kiva bars) - not all at the same time of course. All CBD products except the Kiva as they don't have a CBD "model". Edit: sorry, forgot to answer - anxiety happens with smoking, vaping or edible. Ok, interesting. It initially sounds like you might just be taking too large a dose. What are you medicating for?
What is your take on marijuana vending machines? Link to www.autospense.com I am currently invested in the company that provides that machine (Endexx Corp.) and it seems like a good way to increase sales considering transaction times will be decreased significantly. What is your opinion on them? Do you think they will be worth the investment for a dispensary (3,000 a month to lease)? Sorry to tell you this, but I think they are a joke. They are waaay too expensive. On another note, I am proud to employ people and for $3k a month, I could support at least one if not two employees and their families. The vending machine mentality is destroying society and devaluing human interaction.
Who made the better law in your opinion, WA. or CO. & why? They are similar in many ways (which makes sense because in large part they were drafted by the same people). There are aspects of Colorado law that I prefer, for example it addresses more details of medical marijuana regulation along side retail regs. There are other things I prefer with WA. One might seem counter intuitive to some and piss some people off, that WA doesn't allow home grows. I think recreational home grows lead to diversion and will cause problems with the feds. There is a reason bootlegging is illegal, we have been down that road before.
How do you feel about concentrates? Specifically BHO wax? What percentage of your sales consist of wax or shatter, assuming you carry it? Has it driven down traditional sales? I was very hesitant to accept BHO, mostly out of ignorance. Well made BHO is a great and safe product and I love it. Concentrates represent about 10% of sales (additional sales, not replacement sales). I have made water hash for 15 years and love it, but I now have a great appreciation for other methods and in more recent years have become a solvent based hash maker as well. I actually manufacture BHO manufacturing equipment also and I'm working with regulators to create one of the first fully sanctioned closed loop extractors.
I read an article a little while ago about how Washington's legalization laws included provisions for extremely restrictive and unscientific thresholds of THC to constitute a DUI (ie: levels could exceed the limit many hours after any effects would have worn off). Medical users were pissed because because it effectively relegates them to be in constant pain or in constant fear of being charged with a bullshit DUI. How does law in Colorado compare? Similar. There is a 5ng limit and an individual is subject to a forced blood draw to determine that threshold. It is unscientific and an affront to the constitution. On the other side of the coin, I don't personally know anyone who has been prosecuted for that (and basically everyone I know ingests cannabis, including my mom).
Wow, doesn't that effectively negate legalization? Maybe it's a seldom-enforced provision, but the fact remains that it's there and just waiting to be abused whenever convenient. Hmm, maybe that's the point. It doesn't exactly negate legalization, it makes it illegal for cannabis users to have a drivers license.
I've heard there's some limits placed on how much you can get.. and depending on whether you live out of state or not.. do you think those limits will disappear once the tax money starts rolling in? Not for quite a while. The surrounding states would really need to legalize for that to change.
How do you deal with people buying marijuana for people under the age of 21? What about fake IDs? We just refuse to serve them. We have confiscated a few, but that is pretty rare. People are somewhat more afraid to perpetrate that fraud with cannabis than they are with booze apparently.
Is your shop name a witty pun? Hehe no. It is actually a pretty tame and non descriptive throw back to a time when we didn't want to stand out and wanted to be respectful. We are actually in the process of re-branding (still not a witty pun, just a more dynamic name)
So how do you procure your product? Can anyone get a license to grow and become your supplier or do you also have a license to grow it? Anyone with an existing medical cannabis business can apply for a licensed grow facility. We do have our own and grow most of our own product. We will purchase infused products, topicals etc, to sell to give our customers options.
Do you soil grow or are you strictly hydroponic? We are mostly "soilless" at this point (we mix our own soil blend). Its a proprietary mix that includes peat coco and some other stuff.
Do you think we will see a change in federal policy concerning mj before the end of the Obama presidency? The policy has changed, which is why we are being allowed to operate. More specifically, the scheduling of cannabis is a much more complicated matter. The policy has changed several times depending on what detail you are referring to, but I do expect even more change yes.
Are you aware that the Feds hold a patent on the use of cannabinoids? US Patent #6630507. Kannalife has been granted a piece of this patent as detailed here: Cannabinoid Patent Exclusivity Only Applies To One Condition Link to www.tokeofthetown.com. There are over 20 patents related to Cannabis. A site that had a list has been removed, and right now I can't find another, but they do exist and I have a copy (can post if interested). Do you think these patents will prevent regular people from using Cannabinoids for health purposes? I am aware of that and I'm not concerned at the moment. The more entrenched our industry gets, the harder it will be to exercise those patents.
In your opinion, what does the timeline look like to have retail marijuana on a larger scale than just Co and Wa? Who will be next to adopt, and will it ever be nationally legalized? Good question. Several states are working on legalization language currently and I would expect at least one or two to follow suit in the next two election cycles. Each state that implements successfully will grease the wheels for the low hanging fruit. We already wrote the basis for nation wide best practices and regs here, everything after will be a version of ours (good or bad). Nationally, it will likely become rescheduled and left up to states to regulate. I don't think it will be subject to FDA regs, but will be subject to federal licensing. They want another piece.
What was the most difficult step in making this happen? Trying not to work too much. There have been too many 20+ hour days and 100+ hour weeks to count in the last 4-5 years.
Typical pothead. Always working way too hard and focusing only on the job at hand. Story of my life. They said I would never amount to anything and asked, "where is smoking weed all day gonna get you?".
What are the laws regarding smoking in public? I suppose there aren't really tests they can run like a breathalyzer for alcohol. Will there be designated areas to use marijuana like bars? Smoking in public is not allowed and is subject to fines and civil penalties. Public is defined as public property, I can smoke a joint on my front lawn. Private clubs can allow smoking for private but not pubic access parties.
Can the Feds come in at any given time to take all your bud, money, supplies and shut down your store? Have you ever seen the Feds watching you? Technically they could, yes. I don't pay attention, I just follow the law and make sure my employees do too.
Do you think it's safe from a personal safety standpoint for your employees or owners to work the retail aspect of the business? What kind of security safeguards are in place like working behind plexiglass, having a locked storeroom and having cameras everywhere? There is some risk, as with any high profile retail, but we take every precaution we can. All of our employees are very aware of the possible risks. There are cameras everywhere and everyone that comes into the building goes though an intake process. There is a reinforced barrier with a bullet resistant bank teller style window to pass documents into before being let in the door, among many other things.
Any idea how much per gram? Just depends on what store. Basically in the $10-25 range at the moment.
Are you at a [69420] right now? LMFAO! Actually about a 3. Stress. (literally lights a joint) And without this AMA to distract me I would be up to my eyeballs in work.
You mentioned in another comment that you pay a ridiculous 30% in taxes, but you also grow the product yourself eliminating all the middle men taking their cut in the current, not so legal way, most people get their cannabis. With these two factors how do your prices compare to illegal street prices? Also, with legalization, will bongs pipes and other things of the sort still have to be sold "for tobacco use only"? Paraphernalia is legal here in CO, just not "open containers" in your vehicle (unsealed or resin laden, not in your trunk). I honestly don't know what street prices are anymore (no bullshit, its just been that long and I don't have a reason to know). But there are just so many products and options that the question is hard to answer.
How long do you give it before somebody decides to create a name brand grow company and sell pre-packaged joints (much like cigarettes) on a large scale? Its not possible with the current regulations.
How much money is in the legal pot-farming business? It is a multi billion dollar industry.
What advice do you have for someone looking to get a job or career in legal marijuana? Make an impression on the company you want to work for. Don't be just another resume in the pile, unless your specific set of qualifications is outstanding (which is rare and subjective). Don't be unrealistic about what you will earn. Most of us are just trying to survive and are not making much money.
When somebody buys from your establishment. What details are retained and or sent to the local or federal governments? Only the amount they purchased, along with all the other purchases, to track the weight. No personal info.
What is going to happen once all this pioneering and development of the industry makes its way to big tobbacco companies? I am sure they have a plan in the works to grow and sell marijuana themselves, just like their cigarettes, but lace it with addictive chemicals and carcinogens. That is just a myth. That will never happen.
Do you sell only buds/flowers or do you sell concentrates, wax, pipes/bongs, edibles, etc? All of the above.
What is the best strain in your shop? Congrats, by the way! Thanks! It is so hard to say. Each one is like my child and has it's own attributes that make it unique. I really want to answer with one, I. Just. Can't. I'll say AK48 (Pre-2000), Indica dominant, very medicinal, appitite stimulating and the first strain I ever grew commercially so it holds a special place in my heart. Hanis, Bred by a friend of mine and one of the best growers/breeders/people I know "Tierra Rojo", and probably Golden Goat, our cut is just so good, chunky and terpene rich, I love it.
How much, if any, concentrate can an out of state person purchase? Vwax or oil ECT.. 7 grams.
Do you guys sell seeds as well? Not at the moment, but we do breed our own strains. I have discussed it with the Dept. of Ag and When we are ready, we will.
How long is the line outside your store today? Surprisingly few people have addressed this. We actually opted not to start selling yet. It is a complicated issue, but we would have to take inventory from our medical patients to serve the general public. We are just not willing to do that. So while it is extremely disappointing and anti-climactic, it is best for our patients and our business long term.
How much do you blaze up? A lot.
Do you label your marijuana with the ratio of THC and CBD? If so, is your store going to sell any high CBD ratio strains? We do not label them, but are aware of the cannabinoid profiles of each strain. There are no testing standards here yet, so we will wait until we feel confident that we are giving our patients/customers good data. We also breed our own strains and trade extensively with other growers. We do and will continue to sell high CBD strains.
Do you think the price per ounce will eventually be reduced through competition? How long does an ounce last the average person? Also Sativa or Indica? Eventually yes. About a month. Indica.
I'm curious, is there formal and scientific documentation on the study of cannabis farming/agriculture? Or is that knowledge transferred orally? Orally, scientific and pseudo scientific (icmag.com etc).
This may be an odd question, but does your family know? Do they approve? They do know. My mother (very conservative ordained reverend) is my mmj patient. Some people judged, some were supportive. Most judged, and still do years later. Then there is jealousy and all kinds of other issues. My family is pretty dysfunctional so that does not help.
I heard 1ounce is fairly expensive (compared to getting it on the street). Is this true or false? Also, what kind of impact is this legislation doing to the prices, do you think the prices will go up, or down? Demand has gone through the roof and supply has not. Prices are very likely to go up and stay up for a while.
Would you consider accepting bitcoin? Yes if it were legal, which its not.
What is the scene now with "too many customers"?. I just mean our biggest problem is untapped demand.
Will I be able to go into medical marijuana stores that have already been open to purchase marijuana if I'm 21 but don't have a medical card? No, only the businesses that have been granted an additional "retail" license. So far there are about 180 applicants and 80-90 completed licenses.
I have a couple of questions for you that I hope you can answer. Would purchasing marijuana be about the same price between a medical marijuana dispensary and these new dispensaries? Of course, the quality has just about everything to do with the price, so lets compare two buds of similar quality. Do you think as years go on, there will be enough competition and product on the market that it will make prices of bud deflate throughout the state (or states if more and more obtain similar laws)? The rec product will be significantly more for the same quality. I have heard as much as $80 1/8 pre tax (35%) tax. The price will come down as supply ramps up.
Last updated: 2014-01-05 19:48 UTC
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