The 'Uber for weed' market is here to stay
By Nitasha Tiku
It was only a matter of time before someone spun the "Uber for __" wheel and landed on WEED. More and more states are voting in favor of legalization. Congress recently instructed the feds to back off medical marijuana. Peter Thiel's venture capital fund just bet millions that legal cannabis is gonna be huge. Why not pair pot with our newfound appetite for on-demand delivery via smartphone?
"Uber for weed" was so inevitable that at least six startups attempting to deliver medical marijuana to your door launched in the past eight months: Eaze, Nestdrop, Meadow, Grassp, Time for Dave, and Canary. That doesn't include standard offerings like the "dozens" of delivery services in Seattle, for example, that will let you call in and place an order.
Even Uber itself has partnered with Weedmaps, a popular dispensary locator, as well as a Denver-based pot shop called the Clinic, in order to raise money for multiple sclerosis research. Would you believe there's something in it for Uber, too? The partnership lets Uber sow the seeds for its rumored API, which would insert a "Get an Uber" button into every app on Earth.
The only thing more obvious than the demand for these apps is the inevitable crackdown. Imagine Uber's bitter clashes with city governments and then factor in the political pressure around a federally controlled substance.
Last month, a Los Angeles Superior Court judge shut down Nestdrop, which tried to argue that its weed delivery app was "simply a communication technology" — just as Uber used to argue that it was a tech company that didn't own any cars. Before the ruling against Nestdrop, LA's city attorney publicly announced his intention to squash the startup. Time for Dave was supposed to launch in Seattle last month, but try to download the app in the Google Play store and you'll find the link has been disabled for "violating our Terms of Service."
Meanwhile, Buzzfeed reports that Instagram and Apple's App Store have been heavily policing accounts by "ganjapreneurs." Silicon Valley fears being held liable, when laws vary from state to state and from medical to recreational use:
With a flick of a switch, a digital marijuana business can lose access to its entire customer base. Not just cannabis dispensaries, hash oil extractors, and edible makers, but any individual who posts a lot about weed or business that sells marijuana-related products, like Fairbrother’s Medtainer.
Canary, Seattle's most recent "Uber for weed" contender, is a good example of the next wave of pot startups hoping to side-step disjointed regulations and glide by legal gray areas while everyone is still confused by how the new rules will be enforced.
The app, which was founded by two students from the University of Washington and launched earlier this month, has a slippery path. Washington Initiative 502 legalized recreational marijuana in 2012, but it bans delivery. And The Seattle Times makes the city sound as unwelcoming to weed apps as LA; Mayor Ed Murray promised a crackdown on marijuana delivery, while City Attorney Pete Holmes called the growing for-profit marijuana industry illegal.
But Canary co-founders Josiah Tullis and Megh Vakharia claim they've found a way to get officials to leave them alone by using a strict verification process and the industry's favorite buzzword: "ancillary." (Since "ancillary" products and services don't touch the plant directly, there's less risk involved.) As a preventive measure, for example, Canary did a demo of the app for Murray's office before launching in Seattle and tried to emphasize that it is a tech company. Over the phone, Tullis told me it was "very similar to Postmates," the pricey delivery app that relies on independent contractors.
The independent contractor defense hasn't insulated Uber and seems even shakier when there's weed involved. John Strait, an associate professor at Seattle University's law school explained the risk to the Times:
He said prosecutors could view Canary’s actions as aiding and abetting or conspiracy. "The key will be whether they profit from the independent contractor’s decision to break the law," Strait said.
Nonetheless, Canary's verification process sounds relatively rigorous. To sign up, users have to send a photograph of their state ID, medical marijuana card, and collective garden agreement through the app. Then, some human at Canary calls the user's issuing doctor to make sure the user is verified.
Even without the delivery aspect, Washington's laws are complicated. The state doesn't technically allow dispensaries, but there's a loophole that allows for "collective gardens." Under the "collective garden" rule, medical marijuana can only be delivered by someone from the same collective, so Canary has its network of couriers sign up for all the partnering collectives when they start. Tullis also claims Canary is HIPAA compliant. (Meadow, San Francisco's version of Canary, claims the same.)
Tullis told me Canary already partnered with eight dispensaries during the few weeks it was in private beta. Businesses pay Canary $500 to create a digital storefront with product photos in the app. Users can search for and filter by things like flowers, edibles, and concentrate, and Canary takes a cut of sales driven through the app.
Uber became a $40 billion behemoth while breaking the rules. Likewise, while politicians plan on turning the 2016 election into "the pot primary," tech founders and investors are busy trying to make weed into the next premium consumer product.
Tullis and Vakharia told me they got the idea after hearing a local venture capitalist from Kinzer Capital talk about investing in the cannabis industry. A couple days before Canary launched, Founders Fund, the firm co-founded by Facebook investor Peter Thiel, participated in a $75 million round of fundraising for Privateer Holdings, a Seattle-based private equity company that invests in marijuana businesses.
At the time of the announcement, Founders Fund partner Geoff Lewis, who initially discovered Privateer, told The Verge that the legal cannabis industry was "complex," but "will become an incredibly important and profitable industry within the next decade," adding:
Privateer only operates in jurisdictions where cannabis is fully legal, in contrast to many other players in the space that, until recently, have operated illegally. The company’s ability to successfully navigate the regulatory complexities in this space over the last 4.5 years was a big differentiator from other companies we looked at.
Canary's co-founders sped up the process a little. Once they had the idea, the students taught themselves a 10-month "crash course" in regulations. Tullis thinks proactively involving regulators will help them avoid the same fate as Nestdrop, which wasn't "very transparent," he said. Tullis estimated that half the people with medical marijuana cards are using them recreationally. But Washington's focus right now, he said, is illegal delivery to unauthorized patients. "We're very low priority to them."
In fact, Vakharia seems less concerned with the law and more concerned with Canary's image as a "lifestyle brand." The marijuana industry is going to look different in five or 10 years, and "brands are going to have to rise up" and meet artisanal expectations. That means "no Bob Marley, no pot leaves, no joints. I guess no throwback to what pot was five years ago or what it will be five years from now," Vakharia said.
Privateer is taking a more traditional approach. In November the company launched a global pot brand "based on the legacy of Bob Marley." Either way, Founders Fund will be just fine. By investing an unspecified number of "multimillions" in Privateer, the firm has already associated itself with venture capital's next Bitcoin; where the potential upside is so big, the volatility is worth it. They're not regular VCs, they're the cool VCs.
VIA The Verge
Marijuana Legalization: President Obama Says More States Will Move To Legalize, Federal Government Won’t Stand In The Way
Marijuana legalization efforts got a giant boost this week when President Barack Obama said he expects more states to move toward legalization, and he won’t have the federal government stand in the way.
In an interview with YouTube personalities, Obama indicated that though marijuana is still classified as an illegal substance by the federal government, he doesn’t have much intention to stop states from legalizing it.
“The position of my administration has been that we still have federal laws that classify marijuana as an illegal substance, but we’re not going to spend a lot of resources trying to turn back decisions that have been made at the state level on this issue,” Obama said.
“My suspicion is that you’re gonna see other states start looking at this.”
Nationwide, attitudes toward marijuana legalization have been gradually shifting. A poll late last year found that 51 percent of Americans are now in favor of legalization, part of a long-term trend toward support. When Gallup polled Americans in 1969, just 12 percent of adults were in favor of legalizing marijuana. That grew to 28 percent in the 1970s, and 34 percent in 2003.
More Americans don’t want to see drug users prosecuted. A father, recently arrested for giving medicinal marijuana oil to his cancer-stricken daughter, found widespread support, with 130,000 people signing a petition asking that charges be dropped.
Obama also added that federal drug policy would be shifting toward ending the so-called War on Drugs and focusing on treating it instead as a public health issue. Obama added that he has bipartisan support on the issue.
“What I am doing at the federal level is asking my Department of Justice just to examine generally how we are treating nonviolent drug offenders.”
“Because I think you’re right, what we have done is instead of focusing on treatment, the same way we focused say with tobacco or drunk driving or other problems where we treat it as a public health problem, we’ve treated this exclusively as a criminal problem. And I think that it’s been counterproductive and it’s been devastating in a lot of minority communities. It presents the possibility at least of unequal application of the law and that has to be changed.”
President Obama’s prediction on marijuana legalization has already come true, in large part. There are now 23 states in which marijuana is at least partly legal.
Adam Koessler's daughter Rumer Rose is battling stage 4 neuroblastoma. Koessler believed the cannabis treatment was improving his daughter's health.
“Her skin color came back, her eyes were sparkling again and we just looked at each other in complete amazement,” Koessler told the Newcastle Herald.
According to Metro.co.uk, Koessler was arrested when he was meeting with Rumer's oncologist in Brisbane. He was charged with supplying dangerous drugs to a person under 16 and possession of dangerous drugs.
According to a change.org petition, "Adam's bail conditions prohibit him from having direct or indirect contact with his own child who is in the Lady Cilento Children's hospital - South Brisbane. On the 9th January 2015, Rumer was moved to Intensive care after having seizures."
The petition claims it's inhumane and unjust to keep a parent, who acted out of love for his child, away from her during this illness.
As of Tuesday afternoon, more than 125,000 people had signed the petition.
Koessler's next court date is set for January 20th.
It was already more than proven that cannabis could provide benefits in the treatment of multiple diseases. This is why medicinal marijuana use has been approved in so many countries, or is in the process of decriminalization. Now diabetes and obesity have been added to the list and they further clarify the only possible course: legalization.
While some are busy setting up obstacles for marijuana decriminalisation, many more are focusing their efforts on presenting positive new arguments backed by science. If authorities have had to adapt their laws to allow for the medicinal use of this plant across the globe, it is because its positive effects are more than proven, whether you like it or not.
There are several problems that can be alleviated with the correct variety of pot. From anxiety to insomnia, even inflammation of the bones causing arthritis, to the spasms and tremors produced by such a devastating disease as Parkinson.
And that is not all. There are other well-known medicinal uses for cannabis, such as alleviating nausea caused by chemotherapy in cancer treatment or by medication used to combat the effects of AIDS.
However, little did we know till now about the relationship between blood sugar and marijuana use. A study published by the American Journal of Medicine has confirmed the positive effects of cannabis consumption in avoiding two of the most common disorders in 21st century societies: obesity and diabetes.
They are two diseases that specially worry health authorities for several reasons. The new pace of life, multiple irregularities in our daily diet and low amounts of physical activity have caused the number of overweight people in the most advanced societies to increase exponentially in recent years.
Don’t be afraid to eat that pastry
Everyone knows that your appetite increases after smoking and in many cases, we cannot resist the temptation to eat something sweet – a pastry, sweets, etc. Despite the sugar supplement in your diet, studies from various countries have found lower rates of obesity and diabetes among cannabis users compared to non-users. However, thus far, everything we knew on the matter was the result of conventional wisdom.
To delve into this question, researchers from the University of Nebraska, Harvard School of Public Health and Beth Israel Deaconess Medical Center in Boston conducted a study involving 4,657 adult men and women. Among them, 579 were cannabis smokers at the time and 1,975 had used it previously. The rest had never used marijuana at any time in their lives.
The authors of this study evaluated levels of blood glucose, insulin resistance and other related diabetes factors among the cannabis users. To do so, they divided the respondents into three groups: those who had never smoked cannabis, those who had done so within the last 30 days and those who smoke regularly. Their goal was to evaluate their levels of blood sugar while fasting, cholesterol, as well as blood pressure, body mass index and waist circumference.
The results were conclusive: marijuana users had lower levels of insulin when fasting, lower levels of insulin resistance and the smallest waist circumference. By contrast, they had the highest levels of HDL cholesterol, the so-called “good” cholesterol because it helps reduce the risk of cardiovascular disease.
All this goes to show that marijuana helps control the effect of sugar in blood. Apparently, this beneficial effect could be related to the improvement in the activity of the hormone adiponectin, which is responsible for modulating different metabolic processes, among which is the regulation of glucose.
Thus, the researchers who participated in this study have been able to corroborate previous research on the matter that had already pointed out that marijuana helped govern insulin levels and body mass, which would explain why smokers are less likely to be obese and, therefore, diabetic.
EL PASO, Texas -- State Representative Joe Moody told KFOX14 Texas spends too much money punishing low level drug offenders and wants to decriminalize marijuana.
Moody is proposing a bill that, if approved, would reduce the penalties associated with possessing small amounts of marijuana.
Nineteen states and the District of Columbia already passed laws that remove jail time for low-level drug offenses. The Texas legislature is expected to weigh in on the issue during the 2015 legislative session which started Tuesday.
“It is difficult to pass any bill in the Texas legislature,” said Moody. “There are 7,000 that are filed every session. Only a handful of those make it to the finish line.”
Moody said Texas spends $740 million a year to arrest and prosecute low-level drug offenders.
He told KFOX14, “I think it makes a lot of fiscal sense. I think it makes a lot of sense for law enforcement.”
One resident told KFOX14 “I think the penalties could be a little bit more lenient since we’re realizing most of the other states in the country are moving towards
Under Moody’s bill, possessing one ounce of marijuana would result in a $100 fine. Currently, possessing up to two ounces of marijuana could land an offender six months in jail and a $2,000 fine.
Moody told KFOX14 his bill would consider the violation a civil matter. That way, the offender wouldn’t have a criminal record. Lawmakers will also consider legalizing medical marijuana and the use of recreational marijuana.
Moody said he’s already heard from other lawmakers who support his bill.
“In fact, just sitting on the House floor for the first day, I had three or four Republican members snag me and just say 'hey, I’ve been getting a lot of emails about your bill.' ”
It is an ironic twist that seems appropriate for the marijuana business. Taxes collected from the retail sale of marijuana will be used to educate teens in Colorado about the dangers of drug use. When Colorado legalized marijuana, the state built in provisions to fund programs and staff to help improve the health of local students.
Colorado has already awarded the first payment on that promise by giving nearly $1 million worth of grants to schools throughout the state, according to The Denver Post. As the tax revenue collected from the sale of legalized marijuana is put to use in these public programs, many are aimed at preventing, treating and regulating marijuana use. The Denver Post also reported that the plan calls for hiring school nurses, social workers, and psychologists to help prevent and treat substance abuse among students.
Vice News reported that 11 school districts that applied for grants are dividing up the first $1 million in funding from marijuana tax revenues. The state promises another $1.5 million to future applicants. To use the rest of the funds, the state opened a second application period, which closed last week. Much of the revenue is being distributed to substance abuse treatment programs, school construction, and training and equipment for law enforcement agencies to deal with marijuana-specific problems. Driving under the influence of marijuana, according to a bill passed by the legislature earlier this year, is considered to be a unique new issue and is part of the covered programs.
State Sen. Pat Steadman, one of the bill’s sponsors, was the architect of the revenue for education plan. It isn’t hard to see the connection between other smokeables and a state’s conscience. Most states collect millions of dollars annually from tobacco companies who fund prevention and treatment programs. Vice reported that in 1998, the country’s biggest tobacco companies agreed to pay more than $200 billion to state governments in a lawsuit settlement due to the healthcare costs of smokers. The money, to be paid out over 25 years, was specifically designated to be used for prevention and treatment programs.
The tax is collected in a unique structure. Canna Law Blog breaks it down as follows:
“In Colorado, retail consumers pay the state sales tax of 2.9% plus any local sales taxes plus an additional 10% state marijuana sales tax. However, retail consumers are still absorbing a 15% Retail Marijuana Excise Tax. Colorado imposes a 15% excise tax on the first sale from the cultivator to the retail manufacturing facility, retail store or another cultivator facility. The cultivator is liable for the tax. However, the retail marijuana store will include this excise tax in its consumer sale price similar to liquor or tobacco.”
On November 12, 2014, Colorado’s state board of education approved the following 11 grant awards:
Alamosa School District, $50,000
Archuleta School District No. 50 JT, $65,790
Center Consolidated Schools 26JT, $87,062
The New America School, $169,232
Atlas Preparatory School, $89,200
Cripple Creek School District, $108,024
HOPE Online Learning Academy, $131,900
GOAL Academy, $53,440
Mountain Valley School District RE-1, $64,000
South Routt School District RE-3, $60,360
St. Vrain Valley School District, $96,650
Details and a county-by-county breakdown provided by the Colorado Department of Revenue.
VIA MJI News
Wheat is the most planted cash crop in the world. Sugar cane has the highest yield, and it's the most popular based on gross yearly production. But neither of those crops are nearly as lucrative as cannabis, which has by far the highest gross production value, as you can see in the visualization (courtesy of Information is Beautiful) below
Cannabis is also the most lucrative based on value per square kilometer, followed by coca (the plant used to make cocaine), and opium poppy. Non-drug related crops, like potatoes, vegetables, and wheat, fall far behind.
So legalization is bound to benefit today's growers, right? Not necessarily. Legalized marijuana will increase marijuana consumption, but once cannabis can be produced out in the open, growers will probably start using the high-tech mechanized techniquesthat are common among large agricultural sectors. In fact, Big Ag will probably be only too happy to join the marijuana revolution once the legalization movement gets big enough.
This is all especially bad news for growers in California's "Emerald Triangle", where entire towns (and even counties) are dependent on the black market markup to keep their economies afloat. But legalization will certainly be beneficial for local governments. Already, Colorado is making more on marijuana tax revenues than on alcohol and tobacco:
The lawsuit in which Oklahoma and Nebraska ask the Supreme Court to reverse marijuana legalization in Colorado has prompted criticism from conservatives and libertarians who see it as a betrayal of federalism. Last Wednesday seven state legislators in Oklahoma, all Republicans, echoed that concern in a letter to Attorney General Scott Pruitt. "Oklahoma has been a pioneer and a leader in standing up to federal usurpations of power on everything from gun control to Obamacare and beyond," they write. "We believe this lawsuit against our sister state has the potential, if it were to be successful at the Supreme Court, to undermine all of those efforts to protect our own state's right to govern itself under the Tenth Amendment to the U.S. Constitution."
The legislators argue that the power to "regulate commerce...among the several states," properly understood, does not apply to purely intrastate activity. "For the same reason that alcohol prohibition required a constitutional amendment," they say, "we believe a strong argument can be made that criminalizing and prosecuting drug crimes must be decided at the state level, absent a properly ratified constitutional amendment. If the commerce clause could be interpreted so broadly, there is virtually nothing the federal government could not regulate or control under the guise of 'commerce.'"
But even under the broad reading of the Commerce Clause endorsed by the Supreme Court in Gonzales v. Raich, Congress cannot compel the states to help enforce the federal ban on marijuana. "The lawsuit...appears to endorse federal commandeering of state and local resources to enforce federal statutes and international treaties," the letter says. "We believe the Supreme Court made a wise decision in Printz v United States when it articulated the anti-commandeering doctrine prohibiting the federal government from forcing state and local governments to participate in the enforcement of federal statutes."
Here is how Rep. Mike Ritze (R-Broken Arrow), who organized the letter, explained his motivation:
This is not about marijuana at its core—it is about the U.S. Constitution, the Tenth Amendment, and the right of states to govern themselves as they see fit. If the Supreme Court can force Colorado to criminalize a substance or activity and commandeer state resources to enforce extra-constitutional federal statutes and UN agreements, then it can essentially do anything, and states become mere administrative units for Washington, D.C.
That is not what our Founding Fathers had in mind and that is not what the people of Oklahoma stand for. The Constitution reserved the police power to the states, therefore states are the proper venue for determining what their own civil and criminal codes should be, not the federal government or the UN.
Our Founding Fathers intended the states to be laboratories of self-government, free to tinker and experiment with different ideas. The founders, from Jefferson to Madison, were also strong proponents of states nullifying unconstitutional federal actions. If the people of Colorado want to end prohibition of marijuana, while I may personally disagree with the decision, constitutionally speaking, they are entitled to do so. Neither the commerce clause nor the supremacy clause grants the federal government the power to regulate intrastate trade or commandeer state and local resources in pursuit of a policy. If citizens of that state don’t like it, they are free to use the process to change the laws or move to another state. The last thing we need is the federal government and the UN trying to dictate our criminal codes and control our commercial activities.
Although Ritze's references to the U.N. may seem like rhetorical flourishes aimed at pushing his constituents' buttons, Oklahoma and Nebraska's lawsuit repeatedly cites "treaty obligations" as a reason to override Colorado's policy choices. By contrast, the Obama administration argues that experiments like Colorado's are permitted under an appropriately flexible reading of international anti-drug agreements.
Previous campaign used life-sized rat cages
DENVER - Colorado health officials are announcing a new statewide marijuana-education campaign.
And they say it won't look like last year's controversial "Don't Be a Lab Rat" campaign.
This year's campaign will be called "Good to Know." It's aimed at residents and visitors about how to safely use the newly legal drug.
The campaign will cost about $6 million. The money comes from taxes on recreational marijuana.
Colorado's chief medical officer says this year's campaign will be "broader and more balanced" than last year's lab rat campaign. That one was aimed at teens and tried to get them to avoid recreational pot use. But marijuana advocates found the lab rat campaign demeaning, especially its use of life-sized rat cages.
VIA The Denver Channel
Patients have argued the switchover to commercial producers is unconstitutional
By Brandon Barrett
Medical marijuana users will be permitted to continue growing pot at home after the Federal Court of Appeal upheld a decision last month that would exempt patients from a massive overhaul of Canada’s cannabis laws.
Regulations introduced in 2013 shifted the production of medical marijuana to licensed commercial producers, preventing users from growing cannabis at home, a move that is being challenged by a group of patients in a case that will be heard this year.
In March, medical marijuana users won a last-minute reprieve allowing them to continue growing their own pot at home until the case is resolved. Ottawa appealed, but the Appeal Court upheld the injunction in a unanimous decision Dec. 15.
It’s another win for the plaintiffs in the federal case who’ve filed a constitutional challenge arguing that forcing patients to source pot from commercial producers violates their right to access essential medicine at an affordable rate. Most commercial producers list their cannabis at between $8 and $10 a gram, although prices can go as low as $2 and as high as $15. Many personal growers have been able to produce pot at between $1 and $4 cultivating at home.
“(You can't) expect patients to sit around and suspend their constitutional rights while waiting to see if the licensed producers can come up with a market they can afford," said Abbortsford lawyer John Conroy to Pique back in March. Conroy is leading the fight for medical marijuana users in the country, and sought the injunction to allow users to grow at home.
Patients have also complained about the lack of control they have over their preferred strains and a lowering of quality under the new rules.
“(Growers) are able to create genetics specifically for them that help their conditions that they may not be able to find again, or will have to go through that whole process of finding those genetics again through a licensed producer,” one Sea to Sky home grower told Pique last year.
The federal trial is set to begin in February.
There are currently 15 commercial producers licensed to grow medical marijuana throughout Canada, including the Whistler Medical Marijuana Company, operating out of a 10,800-square-foot facility in Function Junction.
Whistler officials have limited the production of medicinal pot to one facility in the community. Both Mayor Nancy Wilhelm-Morden and former fire chief Rob Whitton previously expressed concerns over Health Canada’s lack of resources to ensure that home-grow operations meet applicable safety standards if the federal court decides personal producers must cease operations.
“The municipality doesn't want to take on the issue of going in and checking for mould and proper and safe conditions,” Wilhelm-Morden said in March. “We just don't want to go down that road, but public safety continues to be my concern in this issue.”
There are 18 licensed home grow-ops in Whistler.
As of last year, nearly 38,000 Canadians were licensed to use medicinal marijuana. Health Canada has said it does not know how many patients continue to grow their own medicinal pot following the federal injunction.
More than 13,000 patients have registered with the new commercial producers, which sold 1,400 kilograms of marijuana between Jan. 1 and Oct. 31, 2014.