WWW.MARIJUANAVENTURE.COM VOLUME 2 / ISSUE 2 M A R I J U A N A THEVENTURE JOURNAL OF PROFESSIONAL CANNABIS GROWERS AND RETAILERS TAXED TO DEATHWILL WASHINGTON BUSINESSES BE ABLE TO SURVIVE? TOMMY CHONG FAMED FUNNY MAN CREDITS CANNABIS FOR LIFE, CAREER THE NEXT FRONTIER ALASKA PREPARES FOR LEGALIZATION FEBRUARY 2015 $6.99 JE SUIS CHARLIE! A MESSAGE FROM THE PUBLISHER Collapsing prices reveal Washington’s problems Cannabis regulations must mirror those in other industries couple weeks ago tential business killers, you end up in an A I received one of industry where the end costs to the con- those phone calls I sumer are grossly inflated. Combine those knew I was eventually costs and that environment with a parallel going to get, but dread industry — medical marijuana — that is just the same. A Wash- competing for the same customer, but with ington State-licensed a completely different cost structure and Tier 1 grower, who minimal — or no — regulations and tax- PUBLISHER had been selling marijuana profitably since es, the results are predictable, and exactly GREG JAMES early summer, was in trouble. His predic- what we’re now seeing. And it will likely [email protected] ament was fairly straightforward — when get worse in the future. the wholesale price he sold his marijua- Legal recreational marijuana in Wash- EDITOR na for was $7-10/gram ington is going to go the GARRETT RUDOLPH ($3,500-4,000/pound), THE REASON way of the Dodo and the [email protected] life was good. Once it typewriter unless some- SALES MANAGER dropped to around $4/ FOR THE DROP thing changes quickly. gram ($1,800/pound), And, there are only two LISA SMITH he was barely breaking IS CLEAR — TOO routes to a healthy legal [email protected] even. recreational industry: (1) STAFF WRITERS The same laws of MUCH SUPPLY, radically alter and mod- supply and demand ify the current rules and CHRIS BAYLEY that govern everything TOO LITTLE regulations that govern PATRICK WAGNER from crude oil prices DEMAND. the legal industry. Make CONTRIBUTORS to orange juice futures them simpler, less costly Ben Adams David Kerr hit him squarely in the face, as too much and more like any other regulated busi- Joy Beckerman Aaron Stancik supply tried to squeeze into too few retail ness. (2) Level the playing field. There Michele Brooke M. Scott Sotebeer outlets. is no way one industry can exist and be Neil Juneja Colette Thomas Discussions with other producers and profitable, when another, selling the same MARIJUANA VENTURE VOL. 2, ISSUE 2 a couple retail buyers seemed to confirm product, has an enormous cost advantage Marijuana Venture (ISSN #2376-0710) is published that the price state-licensed growers are at every level. Untaxed, unregulated med- monthly by MJ Directions LLC. PO Box 1419, Renton, WA, 98057. Phone: (425)281-1348. Website: www.mari- getting for quality marijuana dropped ical marijuana sales are killing the I-502 juanaventure.com. Copyright 2015 by Marijuana Venture. precipitously from the end of summer to experiment before it’s even had a decent All rights reserved. Reprinting, in whole or in part, is expressly forbidden without written permission from the where we are today. In rough numbers, it chance to prove itself. publisher. fell about 50% in a little more than two It’s that simple. ADVERTISING months. In 2012, Washington took the plunge For advertising rates, call (425)281-1348 or email Greg@ The reason for the drop is clear — too to legalize and regulate a product that a MarijuanaVenture.com. much supply, too little demand. The fac- huge number of people thought should SUBSCRIPTION SERVICES tors behind the imbalance are a bit more never have been illegal in the first place. For subscription services, please call (425)281-1348, visit www.marijuanaventure.com or email Editor@Marijua- complicated, but still fairly easy to under- That was step one. Step two is a bit more naVenture.com. For change of address, please include the stand and predict. complicated, but is critical to the new in- old address and new address, along with an address label from a recent issue, if possible. Please allow up to three Let’s not mince words here. The li- dustry’s success: The marijuana business weeks for address to be changed. If an address is not up- censed, regulated marijuana business is a needs to operate in an environment that is dated when the magazine is mailed, we are not responsible for delivery of your magazine. If the Post Office alerts us very costly industry to enter. When you more or less the same as liquor, tobacco that your magazine is undeliverable, we will suspend our combine extraordinarily high tax rates or gaming. Taxed and regulated yes. Taxed subscription until a correct address is received. with strict regulations that govern where and regulated out of business … no! Marijuana Venture assumes no responsibility for any claims or representations contained in the magazine or you can locate, who can operate the busi- in any advertisement. All materials contained are for ed- ness, mandatory security and reporting ucational purposes and intended for the legal marijuana GREG JAMES business where allowed by state law. Marijuana Venture rules, inefficient storage and shipping does not encourage the illegal use of any of the products regulations, and a whole host of other po- PUBLISHER contained within. 2 | Marijuana Venture // February 2015 FEATURES TABLE OF CONTENTS 22 | Tim Cullen Former biology teacher has become a cannabis industry leader in Colorado 28 | Taxed to Death Washington businesses feel the pressure of overwhelming excise taxes 36 | Tommy Chong Still smokin’ after all the years, and still one of the biggest cannabis supporters 38 | Alaska Entrepreneurs prepare for rollout of cannabis industry regulations 52 | Legal Pages Alaska’s unique challenges, strict liability and the maintaining compliance 66 | Strains The conclusion of the two-part series on strains and strain selection 70 | Hemp The truth about cross-pollination between industrial hemp and marijuana 76 | GreenBroz San Diego-based company emerges as a leader in processing machinery 80 | Beyond Buds An excerpt from Ed Rosenthal’s most recent book on cannabis extracts Above: Clones from Rainforest Farms in Alaska. GUEST COLUMNS About the cover: Two jars of 86 | Aaron Stancik cannabis cure in the Alaska 90 | M. Scott Sotebeer sunshine with the beauti- 94 | Colette Thomas ful Arctic landscape in the background. Photos courtesy Rainforest Farms. OPINIONS 2 | Message from the Publisher MJVenture 96 | Letter from the Editor www.marijuanaventure.com | 5 CANNABIS CALENDAR Attendees listen to speakers at the first International Cannabis Business Conference. Feb. 7: The first session of a series on More information: www.cannabiscup. More information: cannacon.org. regulatory compliance will be from 9 a.m. com/southern-california. to 4 p.m., Feb. 7 at Seattle University. March 7-8: The Maximum Yield In- The event will be presented by DK Law, Feb. 15-16: After a successful showing door Gardening Expo will put on the first and will feature a guest speaker from the back in 2014, the International Cannabis of four scheduled trade shows March 7-8 Washington State Liquor Control Board. Business Conference opens 2015 with an at the Washington State Convention Cen- The first half of the seminar will include event in San Francisco. ter in Seattle. security, traceability, regulations on pro- The business conference will be at the The event is expected to feature hun- duction, transportation, storage, record Hyatt Regency, and will feature keynote dreds of exhibitors, interactive displays, keeping, testing and more. speakers Dr. Carl Hart, a drug addiction seminars and expert panels. The opening The second half will address penalties expert, and travel writer and TV host Rick day of the show is industry only, with a and how to defend yourself from possible Steves. The conference will address the schedule that includes complimentary a violations. latest in cannabis legislation, in addition VIP seminar and discussion followed by More information: www.cannabiscom- to being an opportunity to network with six hours of exhibit time to network, inter- mercecompliance.com. some of the biggest names in the industry. act and do business. More information: internationalcbc. The second day of the show is open to Feb. 7-8: The fourth annual SoCal Med- com. the public. Last year’s event prohibited ical Cannabis Cup will be held at the NOS discussion of marijuana on the first day. Events Center in San Bernadino, Califor- Feb. 18-21: CannaCon moves to Se- There will also be gardening expos in nia. The two-day event features a trade attle for its second industry trade show. Chicago, Los Angeles and Boston later in show and expo in a main building, with The event is dedicated to creating lifelong the year. an extended outdoor component and ad- partnerships in the emerging cannabis in- More information: www.indoorgarden- ditional booths. Booths range from glass- dustry. expo.com. ware and clothing to grow equipment and CannaCon will be at Bell Harbor Inter- artwork. There will also be three seminars national Conference Center at Pier 91 in March 16-18: Pacific Northwest resi- per day that cover legalization regulations, Seattle. The three-day show begins Feb. dents won’t have to travel far for the Na- political issues and more. 18. Tickets can be purchased online. >> CONTINUED ON PAGE 8 6 | Marijuana Venture // February 2015 CANNABIS CALENDAR << CONTINUED FROM PAGE 6 to showcase industry products and make sary owners, private equity leaders and top tional Cannabis Industry Association’s valuable business to business connec- lawyers. With Illinois recently joining oth- Cultivation Management Symposium, tions.” er states that have legalized medical mari- which is slated for a venue to be deter- More information: www.oregonhemp- juana, there will also be a “marijuana busi- mined in Seattle.