The Marijuana Conference - New York - Oct 2010
The Marijuana Conference held in the New York Hilton on Monday the 25th and Tuesday the 26th of October was pitched as the first “non-biased event covering business, legal, health, and the political issues surrounding the growing debate over marijuana in the United States”. The organizers, Deal Flow Media, focus on providing independent research and analysis of alternative investments through reports and databases as well as hosting web seminars and conferences.
It was hard to know, beforehand, what the event would be like as it was the organizer’s first foray into the world of marijuana and my own knowledge of the American scene had been limited to what I had read in mainstream newspapers, marijuana magazines, the internet and heard from various friends and colleagues inside and outside the industry. Until the opening day the organizers had little idea of how many exactly would attend and from which areas most would come. They assured me, previous to travelling from the UK, that they had attracted attention from investors, entrepreneurs, legislators, physicians, attorneys, activists, lobbyists, and business owners.
Although I hadn’t heard of most of the speakers, detailed on their website (www.themarijuanaconference.com) except for the well renowned Dr Lester Grinspoon (author of Marihuana Reconsidered and The Forbidden Medicine, amongst other writings), after a little research it was clear it that the lineup boasted an impressive breadth of knowledge.
The obvious place to start was discussing the laws that had been passed in the fourteen states that currently permit the use of medical marijuana, as well as looking at others with bills on the political agenda, and the very important context of these in regards to Federal law. On the panel were three state politicians, an advisor in public strategies and the discussion was chaired by Rob Kampia of the Marijuana Policy Project, the largest organization in the world dedicated to ending Marijuana prohibition (www.mpp.org). The intricacies of the balance of state laws and Federal laws is highly complicated, especially for an outsider with little knowledge of US politics but I had previously learnt from online media that shortly after the start of Barack Obama’s presidency, a US Justice Department memo had been circulated stating that Federal law enforcement bodies would not spend any money on harming medical marijuana practices that were legal under state law, and this was a positive sign. Previously organizations, dispensaries and individuals that worked within state medical marijuana laws had been targeted by Federal organizations, principally the DEA, whom did not recognize the states independent medical marijuana laws. The sending out of this memo could be seen as the first sign that the Federal Government recognized these laws, although only to some extent as it was only a memo and not a law in itself.
Of the fourteen states that had passed medical marijuana laws the manner in which they had legalized it could be markedly different. The two principal differences were whether states had allowed caregivers and patients to grow their own or whether they had allowed dispensaries to distribute marijuana to patients or a balance of the two. It seemed like the dispensary model attracted the most attention for business and so this was focused on the four states that licensed dispensaries, California, Colorado, Maine and New Mexico. Within the dispensary model was the provision for dispensaries to be for profit or nonprofit. Most states except Colorado had opted for the latter. There was discussion that other states are likely to authorize dispensaries in the spring of 2010, and which model they were likely to opt for, although at this stage it was noted that this was mostly speculation. It did give investors and entrepreneurs that operate in these states the foresight to keep a close eye on proceedings.
Although much of the first discussion surrounded state medical marijuana laws, the topic of Proposition 19 was also on the agenda. Proposition 19, also known as the Regulate, Control and Tax Cannabis Act of 2010, is a Californian ballot proposition which will be held on the November 2nd, 2010. It allows local governments to legally regulate marijuana sales, use, cultivation and permits local governments to impose and collect marijuana-related fees and taxes, and authorizes various criminal and civil penalties. Whatever happens on the 2nd of November learning more about this Proposition only served to show just how large America is and how complex its political structure, because if passed it only determines that the state can regulate and tax these activities but it does not determine how this would be carried out in each of California’s 58 counties. What is legal in one county might be illegal in the next and could possibly still incur criminal penalties. The overriding sentiment of our first talk was for all to encourage legal change and a movement towards legal regulation but also served as a guide to warn people to keep a close eye on which regulations they were subject to on a Federal, State and county level if they wanted to minimise all problems with the laws.
Many others of the events speakers touched on the complexities of laws within states that had passed medical marijuana laws. In many of these states, despite the passing of legislation in favour of medical marijuana, life was still not made easy for anyone trying to operate as a business. Jill Lamoureux who alongside her husband had started Boulder County Caregivers, a medical marijuana dispensary, spoke on the issues that she had faced and continued to face. Not only were applications for a dispensary license fraught with excessive bureaucracy but also there were significant charges for applying that were non-refundable should the application not succeed, as well as ongoing licensee fees. Jill also pointed out that laws constantly changed and she, like many others, was struggling to keep up. One law meant she had to diversify into production, another dictated the ratio between wholesale and retail and she had many more examples. Most of the speakers and other people engaged in the business have, at some stage, had problems with finding a supportive landlord or a bank that would take their business. There were many reports of people in the grow or distribution fields that would suddenly find themselves being pushed out of the space they rented or having their bank accounts shut down and unable to take any payment.
Another of the speakers was Troy Dayton, an impressive entrepreneur and activist who is CEO of Harborside Ventures, The ArcView Group (www.arcviewgroup.com), the top fundraiser for the Marijuana Policy Project and cofounder of Students for Sensible Drug Policy, a group that operate in over 200 campuses across the US as well as having branches in several other countries, including the UK. Troy discussed the opportunities for ancillary businesses in the marijuana market comparing it to the American gold rush of the late 1840s where often the businesses selling jeans, pick axes and other products made more money than the gold companies themselves. Troy discussed the emergence of an increasing amount of ancillary companies involved in the marijuana market selling equipment, containers, books and magazines, films, seeds, clones and of providing services like insurance, legal advice, marijuana testing, exhibitions, security, property rentals and sales, banking, web portals etc. Where most companies or individuals involved in the production or distribution of marijuana had to keep up with often strict and ever-changing legislation with the constant threat from Federal bodies ancillary businesses were mostly not subject to such problems. Two other speakers involved in the ancillary market talked about the fast growth they had seen in the visitor numbers to their web portals, and subscribers to their iPhone applications and corresponding increases in advertising revenue. Whilst J.B Woods of Greenpoint Insurance discussed the unchartered territory of insuring the medical marijuana industry, a field his company has been a pioneer of. Insurance can now be bought for almost everything in the medical marijuana field except for problems during cultivation.
It is important when considering marijuana as a business opportunity to know about the therapeutic benefits of it and understand the potential health issues. Deal Flow Media had lined up four speakers to talk on these issues, two who despite being good friends had some healthy differences in opinion.
The first to speak was Dr. Lester Grinspoon, who has held the most impressive array of positions of any marijuana advocate, including being Associate Professor Emeritus of Psychiatry at Harvard Medical School, serving 40 years as Senior Psychiatrist at the Massachusetts Mental Health Centre, being a Fellow of both the American Association for the Advancement of Science and the American Psychiatric Association and founding editor of both The American Psychiatric Association’s Annual Review of Psychiatry and the Harvard Mental Health Letter, as well as many other achievements and two books on the subject of marijuana including Marihuana Reconsidered, and Marihuana, The Forbidden Medicine. Dr. Grinspoon’s was first asked to look into marijuana when use started rapidly increasing during the 1960’s. Initially he had all the preconceptions that many have who don’t know about marijuana, but as he read more he realized he had been misled and set out to explore the plant more and eradicate any misconceptions he had, and later to try and dispel any misconceptions others have. Dr. Grinspoon in his speech recommended the use of marijuana over FDA approved medicines for a number of illnesses, as a pain killer, appetite enhancer , sleeping aid and to overcome the nausea that “you can feel in your toenails” when going through chemotherapy. Although there are medicines available he normally found that marijuana was more efficient, cheaper and had many less side effects. He also recommended it recreationally for accentuating emotions and feelings in some everyday activities and for increasing creativity. His website www.marijuana-users.com shows some stories of users’ experiences with marijuana.
Although there are big pharmaceutical companies already involved in using some of the chemicals in marijuana in their medicines such as Sativex and Marinol, Dr. Grinspoon found that marijuana was more beneficial in the context of the whole plant. He also recommended smoking or vaporising marijuana over other methods of ingestion due to the speed of effect and efficiency through self-titration i.e. take a drag wait a few minutes and see what happens, if nothing then take another until you do. If the effect is not pleasurable then stop if it works for you then continue. Dr. Grinspoon noted that there is no data to prove that when smoked pure it causes cancer or any respiratory problems although asserted it was likely to be safer to vaporise than to smoke. He also pointed that low THC strains were equally important in the medical application of marijuana as more potent ones and that it was important to be able to offer patients the medical effect of marijuana without the high. He also asserted that CBD is a beneficial chemical in therapeutic marijuana which some argue against. He strongly argued that he did not believe marijuana to be addictive but that it was a drug, like many others, that was open to abuse.
The subsequent speaker Dr. David Smith, appropriately noted when he started that Dr Grinspoon was going to be a tough act to follow. To engage the slightly reduced audience, he quickly stated that although he didn’t entirely agree with Dr. Grinspoon in a few crucial areas he did believe that the current drugs laws did not work and had created more problems than benefits. Dr. Smith is a past president of the American Society of Addiction Medicine and Founder and Executive Editor of the Journal of Psychoactive Drugs, contrary to Dr. Grinspoon he believes that marijuana does have addictive properties and other problems associated with its use but that it is minimally addictive to the majority of users. He was quick to point out that withdrawal symptoms were significantly less than with many other legal and illegal drugs, with chronic users typically experiencing irritability, depression, loss of sleep, night sweats and vivid dreams whilst withdrawing from use. Like all speakers before him it was emphasized that there should be restrictions on adolescents using due to possible changes in brain development, hormonal imbalances, a higher risk of dependency in later life and a general decline in academic performance.
The Californian Society of Addiction Medicine of which he is a former President recommends that use for minors should be minimized, adolescents should be treated not punished, treatment should be funded through marijuana sales, and warning labels should be placed on packaging. Marketing, distributions and sales should also be regulated and driving under the influence measures should be correctly addressed. It recommends that the impact of legalization should be frequently evaluated.
One of the more frequently used arguments by activists and advocates of marijuana legalization is the increase in tax revenue that such a policy is likely to earn, and the reduction of expenditure on policing and incarceration. To speak on this subject was Jeffrey Miron - a senior lecturer in economics at Harvard University and an expert in the economics of libertarianism. Whilst Jeffrey agreed with the presumption that legalization would increase tax revenue and decrease spending he pointed out that what mattered when using this as a key argument was whether this was a trivial or significant amount. He continued to say that this would be highly dependent on several factors, principally, in the case of California, if Proposition 19 passed, on what reaction the Federal Government took and what other states did following suit. The ideal for Californian tax revenue being non-interference from the Federal Government and the other 49 states maintaining their prohibition. Jeffrey used his own figures and those done by other groups to show the difference in opinion and statistics that was rife in this area. Where his study showed $352 million yearly tax revenue if marijuana was legalized in California, the official figures estimated it to be $1.4 billion. He importantly pointed out that these differences were so huge due to a lack of suitable data and that different studies considered different policy changes. Jeffrey wrapped up his talk by emphasizing that whilst marijuana legalization would help government budgets it would not be by a huge amount and this impact should play a small role in the debate. More important, he felt, was the fact that marijuana use is not the government’s business; in a free society individuals should be able to choose whether to take risks or not, it is only the government’s responsibility to stop negative impacts on third parties.
Jeffrey’s view was backed up when a panel of eminent state attorneys, whilst discussing their involvement in the industry and what advice they were allowed to give, compared the marijuana movement to that of the fight for equal rights of the gay and lesbian community over the last 50 years in the US. They made many comparisons between steps that this community made and those that the marijuana movement is going through with a slow but increasing speed of acceptance in certain states. They encouraged activists to look closer at what the gay and lesbian communities had achieved politically and encouraged greater partnership between the two movements for the greater good of civil liberties. Whilst they stressed the position of the Federal government and its importance they were encouraged by the fact that more and more states were looking at passing medical marijuana laws and pointed out that a sharp sway in favour would be likely to change the Federal Government’s stance in the future.
The conference had a healthy level of attendance from different areas of business all of which have an important role to play as the market and laws develop. It had a professional feel with all attendants wearing suits. I personally met people involved in hydroponics, Californian real estate, marijuana testing, caregivers, dispensary owners, activists and documentary makers, all who had different experiences, outlooks and expertise and who were all ready to share this, learn from others and advance their businesses and try to progress favorable laws.
One of the over-riding sentiments of the conference was caution and that the industry has a long way to go, a lot to learn and is not a get rich quick scheme. The part that big business has to play in the marijuana market was disputed. There is little evidence of it so far with most of the marijuana businesses having been started with loans from friends and family. The feeling was that big business would probably start in the safe, comfortable areas of ancillary products and services and then slowly try and move in as the market became safer both legally and politically.
By the end it was clear that although there were some scare stories in the US, certain states seemed to be taking the global lead in improving marijuana laws. A few more states converted could see the Federal government change its policy….. and then?
Images courtesy of Deal Flow Media (www.dealflowmedia.com)
