8 ms·

How Silicon Valley entrepreneurs are rushing to cash in on cannabis

107 points by ds9 12y ago

at-fates-hands 12y ago
"Defying projections, crime has dropped since the law went into effect January 1, and the flow of new tax revenue, more than $2 million a month, is on par with the state’s haul from alcohol taxes. Is this what the pot-friendly future of America looks like?" It sounds like all rainbows and unicorns right? Well, not exactly. . . "Marijuana is by far the No. 1 cause of student expulsions from Colorado public schools" - http://www.thedenverchannel.com/news/local-news/more-younger-students-bringing-marijuana-to-schools-around-colorado-investigators-claim http://www.thedenverchannel.com/news/local-news/more-younger... "Colo. kids getting into parents' pot-laced goodies" - http://www.usatoday.com/story/news/nation/2014/04/02/marijuana-pot-edibles-colorado/7154651/ http://www.usatoday.com/story/news/nation/2014/04/02/marijua... "Colorado News: Pot problems in Colorado schools increase with legalization" - http://www.summitdaily.com/news/marijuana/8877953-113/marijuana-schools-colorado-kids http://www.summitdaily.com/news/marijuana/8877953-113/mariju... "Harmless pot? New marijuana study shows brain damage in those 18-25" - http://www.deseretnews.com/article/865601141/Harmless-pot-New-marijuana-study-shows-brain-damage-in-those-18-25.html http://www.deseretnews.com/article/865601141/Harmless-pot-Ne... Yeah the tax benefits are great for the state, but there's going to be a lot of unintended consequences. Not sure I'd want my kids getting exposed to this at a young age. EDIT: I guess I shouldn't be surprised. Downvotes for a one article and nobody presenting any fear of their kids being involved with pot at an early age. I will simply leave with you a family friends comment to me who's been a drug counsellor for 25 years, "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana."
- smokeyj 12y ago
  > Not sure I'd want my kids getting exposed to this at a young age. Is that a problem for legalization or parenting?
  - doktrin 12y ago
    It's both, of course. Legalization means easier availability, even for something as relatively ubiquitous as marijuana.
    - Fishkins 12y ago
      That may be true, but I'm not convinced it is. There's some evidence to the contrary [0]. The explanation I've heard is, if what you're selling is always illegal, you won't discriminate much about whom you sell to since you'll get in trouble if you're caught no matter what. On the other hand, if you can make a bunch of money legally selling something to adults, you won't be as eager to take extra risk just to get a few more sales. [0] - http://www.cbsnews.com/news/teens-pot-easier-to-buy-than-beer/ http://www.cbsnews.com/news/teens-pot-easier-to-buy-than-bee...
      - potalc 12y ago
        I agree, when I was younger, it was much easier for me to buy cannabis than alcohol. Alcohol required knowing someone older than 21, cannabis required knowing a dealer, which was much easier.
      - doktrin 12y ago
        That's a valid data point. Without moving the goal posts, I'd like to re-phrase the logic : The crux of this argument is that the supply chain for illicit marijuana will be disrupted by legalization. In other words, legalizing will cause current (illegal) suppliers to go out of business and/or stop doing business with street / kid / high school dealers - thus reducing availability for underage kids. My issue with this logic is that I can't see why the demand for a product (marijuana) won't continue to drive supply once it's legalized. There will always be a way for a local high school dealer to find weed. Supply chains could easily re-route to accommodate demand in high schools. What I do find to be a compelling argument, however, is the notion that demand could decrease post-legalization. This seems rational to me. The alcohol comparison feels awkward, primarily due to the difficulty in trafficking in alcohol at the small scale. It's bulkier and decidedly more awkward to manage. Therefore, it's not exactly apples to apples. At one point, I also considered the fact that legalizing could decrease profit margins. However, low level dealers really don't have much of a profit margin to begin with. However, you have solid data and I'm primarily speculating :)
- zavulon 12y ago
  > Not sure I'd want my kids getting exposed to this at a young age. I don't have time to dig up a study on this, but pretty sure it was done - % of teenagers who tried pot in Amsterdam is much lower than in the States or other places in Western Europe, due to lack of "coolness" factor.
- atom-morgan 12y ago
  A lot of the consequences you're referring to seem to be issues related to parenting and a lack of education (both for parents and their kids). A large majority of this ignorance exists because of its criminalized history and the blatant propaganda that's a result of the War on Drugs.
- ericbarch 12y ago
  "Harmless pot? New marijuana study shows brain damage in those 18-25" Although this could certainly be the case, I do have an issue with the article. The conclusion of the research seems to be this quote: "Breiter and his colleagues found that among all 20 casual marijuana smokers in their study — even the seven who smoked just one joint per week — the nucleus accumbens and amygdala showed changes in density, volume, and shape. The scientists also discovered that the more pot the young people smoked, the greater the abnormalities." It is never actually stated that these changes in density, volume, and shape cause brain damage. Seems to be a bit of a sensationalist headline in my mind.
- ritchiea 12y ago
  Even with pot being illegal a lot of my friends started smoking in their early teens. You can't solve that with regulation (and I'm not a hacker libertarian, I think some issues should be addressed with regulation).
- deleted 12y ago
  [deleted]
- gdubs 12y ago
  Maybe they shouldn't resort to expulsion for something kids have been doing for half a century anyway. I'm not saying they should allow it blindly, but I feel like getting kicked out of school is gonna do more damage than the weed.
  - stephengillie 12y ago
    Under-tolerance is an ages-old issue for principal administrators. Kids often get kicked out of educational institutions for wearing or generating imagery of banned items.
- mullingitover 12y ago
  > "Harmless pot? New marijuana study shows brain damage in those 18-25" I downvoted you for endorsing this stain on the reputation of science journalism. Tiny sample size, writer exaggerates findings to craft a clickbait article title, it's awful. We deserve something better than tabloid reporting in our science articles.
  - gdubs 12y ago
    I also disagreed with the parent comment, but meta point: I'm not sure down voting is fair in this situation. Parent seems genuine and earnest in their comment. It seems like it'd be enough to simply reply with the counter point...
    - mullingitover 12y ago
      I haven't seen an etiquette guide for HN anywhere, but if we can't downvote the promotion of bad science journalism, what can we downvote?
      - nilkn 12y ago
        Hateful, bigoted posts, of course.
      - anigbrowl 12y ago
        It isn't promotion of bad science journalism. It's a crap story, but there are 3 other links in there too. I'm strongly pro-legalization and think the concerns are overblowon, but a lot of people are using the 'bad science' complaint to silence a point of view they dislike.
        mullingitover 12y ago
        It's true, I do find the old 'think of the children' appeal to emotion, and the trotting out of the 'gateway drug' myth to be distasteful. However, I'm not silencing anyone's point of view--I don't have admin rights on HN, just the ability to rate comments.
- deleted 12y ago
  [deleted]
- jonasvp 12y ago
  > "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana." This might well be true though I doubt it. I strongly suspect almost all of them started with alcohol. Be that as it may, that's really not the probability we're interested in. It's not "percentage of addicts who tried Cannabis" but "percentage of Cannabis users who go on to become addicts". Given the wide usage, the first number is meaningless, the second likely very low. Your friend's quote might as well be: "they had one thing in common: they all had a driver's license".
charlieflowers 12y ago
Paul Graham talks about people who "live in the future" -- in a specific area of their lives, they see clearly that some change is coming long before everyone else catches on. It seems the trend towards legalization of marijuana is one such area -- it probably is one of the next gold rushes. (In my opinion, 2 other such areas are virtual reality and the Rust programming language).
- pyre 12y ago
  How does the Rust programming language translate into a 'gold rush?'
  - deleted 12y ago
    [deleted]
  - sedev 12y ago
    It seems that they're saying that marijuana legalization is like a gold rush, not that Rust is --- i.e. marijuana legalization, Rust, and VR, are all manifestations of Living In The Future, and additionally, marijuana legalization is a gold-rush situation.
- soup10 12y ago
  Many cannabis dispensaries and growers have been successful small business for a long time now in states where it's legal. In fact dispensaries in California lobbied against full legalization in an effort to protect the existing economics. I guess they are making lots of money already and fear consolidation and industrial grow ops will change the business and hurt their margins. VR has a long way to go imo. Having used the first gen occulus, though interesting, it feels gimmicky and very much reminds me of 3D glasses(in terms of hype vs how cool the tech is in practice). Few people will willingly strap a vision obscuring black box to their face for more than a few minutes at a time to try it out. Probably worse than that, even if it was fun to play games with, it probably wouldn't catch on mainstream for a long time because the dork factor is incredibly high. It's like google glass on steroids. Rust is not that different from existing languages. I appear to be disagreeable today, apologies.
stephengillie 12y ago
Yet another cannabis article that completely ignores Seattle. Where's the reporting about Winterlife?
- Crito 12y ago
  While you can legally buy from Winterlife, Winterlife cannot legally sell to you. They aren't operating in a technically legal gray area, rather they are technically illegal but in practice gray (with local authorities acknowledging that they are within the spirit of legalization and not pursuing them for illegally selling.)
- chaired 12y ago
  Every time I meet one of their couriers in broad daylight, and they hand me a receipt, I feel like I'm just grazing a tiny part of history. It's not Rosa Parks level. It's a smaller matter, but it's still an important change for Western society, which legitimizes very, very few kinds of states of consciousness, and strongly favors the one that makes you most productive in a job.
  - rozap 12y ago
    For minorities it's not a small matter. i502 is about so much more than getting high, it's about eliminating a policy which was so often enforced at the discretion of the officer and prosecutor, which opened the door for all kinds of discrimination. the war on drugs is one of the most damaging policies for society, and i502 is a substantial step in the right direction.
- sv123 12y ago
  Winterlife is taking the opportunity to cash in for the next few months until full retail shops open. What is essentially illegal weed dealing in plain site, relying on the lack of enforcement to stay in business. Unlicensed, not adhering to the rules of i502, akin to me advertising and delivering beer I brewed in my garage. Ballsy for sure, not anything revolutionary.
420365247 12y ago
Tranzbyte's new Zazzz marijuana vending machine looks pretty sweet though! I think it has the potential for countless uses, far beyond the cannabis industry. http://www.usatoday.com/story/tech/2014/04/14/pot-vending-machine/7704059/ http://www.usatoday.com/story/tech/2014/04/14/pot-vending-ma...
- sandieman 12y ago
  Have seen this for wine, and also required a breathalyzer. Cool tech but they eventually were removed and never saw it being used regularly.
  - canvia 12y ago
    Regulation stifling innovation. Sad.
tptacek 12y ago
I thought this piece on Vox was pretty clear-eyed about the economic impact of legalized marijuana; it's skeptical about the value of the pot startup market (its author is a legalization advocate, as am I). http://www.vox.com/2014/4/16/5620322/how-legalized-pot-would-change-america http://www.vox.com/2014/4/16/5620322/how-legalized-pot-would...
- midas007 12y ago
  Startups seem more consumers than potential producers. Further it smells like a market about to bud and quickly become a brutal commodity like coffee or tea. It would be cool to see cannabis traded in the futures markets though.
  - joe_inferno 12y ago
    "about to bud" I see what you did there
    - sizzle 12y ago
      you forgot "smells", which made me chuckle.
  - pmorici 12y ago
    So long as there is the ambiguity of the law at the federal level where people who might be following state laws to the T run the risk of getting put in prison for years there will probably still be money to be made.
- samstave 12y ago
  If we are going to legalize pot, I would prefer that it be legal to send via post. I'd support a method where any individual address could subscribe to a certain amount of pot delivered via mail per month. I can already do this with a wine club... Why not a pot club.
  - dangrossman 12y ago
objnotdefined 12y ago
I've spoken with people who work for the state of Oregon.... state employees who are working on the software infrastructure for recreational marijuana dealers. Licensing, taxing, etc. It's basically a scaled up version of the current system of medical growers/distributors but tailored for recreational use. That's how confident they are legalization is coming in the next few years.
- StavrosK 12y ago
  I thought it was legal in those states? Also, it's a bit of a virtuous cycle: legalization is coming because many people think it is coming.
samstave 12y ago
I've started a pot delivery system where you can select your delivery location via a smart-phone app; Doober. Like Uber - but for Pot - PM for details!

107 points by ds9 12y ago

"Defying projections, crime has dropped since the law went into effect January 1, and the flow of new tax revenue, more than $2 million a month, is on par with the state’s haul from alcohol taxes. Is this what the pot-friendly future of America looks like?" It sounds like all rainbows and unicorns right? Well, not exactly. . . "Marijuana is by far the No. 1 cause of student expulsions from Colorado public schools" - http://www.thedenverchannel.com/news/local-news/more-younger-students-bringing-marijuana-to-schools-around-colorado-investigators-claim http://www.thedenverchannel.com/news/local-news/more-younger... "Colo. kids getting into parents' pot-laced goodies" - http://www.usatoday.com/story/news/nation/2014/04/02/marijuana-pot-edibles-colorado/7154651/ http://www.usatoday.com/story/news/nation/2014/04/02/marijua... "Colorado News: Pot problems in Colorado schools increase with legalization" - http://www.summitdaily.com/news/marijuana/8877953-113/marijuana-schools-colorado-kids http://www.summitdaily.com/news/marijuana/8877953-113/mariju... "Harmless pot? New marijuana study shows brain damage in those 18-25" - http://www.deseretnews.com/article/865601141/Harmless-pot-New-marijuana-study-shows-brain-damage-in-those-18-25.html http://www.deseretnews.com/article/865601141/Harmless-pot-Ne... Yeah the tax benefits are great for the state, but there's going to be a lot of unintended consequences. Not sure I'd want my kids getting exposed to this at a young age. EDIT: I guess I shouldn't be surprised. Downvotes for a one article and nobody presenting any fear of their kids being involved with pot at an early age. I will simply leave with you a family friends comment to me who's been a drug counsellor for 25 years, "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana."

smokeyj 12y ago
> Not sure I'd want my kids getting exposed to this at a young age. Is that a problem for legalization or parenting?
- doktrin 12y ago
  It's both, of course. Legalization means easier availability, even for something as relatively ubiquitous as marijuana.
  - Fishkins 12y ago
    That may be true, but I'm not convinced it is. There's some evidence to the contrary [0]. The explanation I've heard is, if what you're selling is always illegal, you won't discriminate much about whom you sell to since you'll get in trouble if you're caught no matter what. On the other hand, if you can make a bunch of money legally selling something to adults, you won't be as eager to take extra risk just to get a few more sales. [0] - http://www.cbsnews.com/news/teens-pot-easier-to-buy-than-beer/ http://www.cbsnews.com/news/teens-pot-easier-to-buy-than-bee...
    - potalc 12y ago
      I agree, when I was younger, it was much easier for me to buy cannabis than alcohol. Alcohol required knowing someone older than 21, cannabis required knowing a dealer, which was much easier.
    - doktrin 12y ago
      That's a valid data point. Without moving the goal posts, I'd like to re-phrase the logic : The crux of this argument is that the supply chain for illicit marijuana will be disrupted by legalization. In other words, legalizing will cause current (illegal) suppliers to go out of business and/or stop doing business with street / kid / high school dealers - thus reducing availability for underage kids. My issue with this logic is that I can't see why the demand for a product (marijuana) won't continue to drive supply once it's legalized. There will always be a way for a local high school dealer to find weed. Supply chains could easily re-route to accommodate demand in high schools. What I do find to be a compelling argument, however, is the notion that demand could decrease post-legalization. This seems rational to me. The alcohol comparison feels awkward, primarily due to the difficulty in trafficking in alcohol at the small scale. It's bulkier and decidedly more awkward to manage. Therefore, it's not exactly apples to apples. At one point, I also considered the fact that legalizing could decrease profit margins. However, low level dealers really don't have much of a profit margin to begin with. However, you have solid data and I'm primarily speculating :)
zavulon 12y ago
> Not sure I'd want my kids getting exposed to this at a young age. I don't have time to dig up a study on this, but pretty sure it was done - % of teenagers who tried pot in Amsterdam is much lower than in the States or other places in Western Europe, due to lack of "coolness" factor.
atom-morgan 12y ago
A lot of the consequences you're referring to seem to be issues related to parenting and a lack of education (both for parents and their kids). A large majority of this ignorance exists because of its criminalized history and the blatant propaganda that's a result of the War on Drugs.
ericbarch 12y ago
"Harmless pot? New marijuana study shows brain damage in those 18-25" Although this could certainly be the case, I do have an issue with the article. The conclusion of the research seems to be this quote: "Breiter and his colleagues found that among all 20 casual marijuana smokers in their study — even the seven who smoked just one joint per week — the nucleus accumbens and amygdala showed changes in density, volume, and shape. The scientists also discovered that the more pot the young people smoked, the greater the abnormalities." It is never actually stated that these changes in density, volume, and shape cause brain damage. Seems to be a bit of a sensationalist headline in my mind.
ritchiea 12y ago
Even with pot being illegal a lot of my friends started smoking in their early teens. You can't solve that with regulation (and I'm not a hacker libertarian, I think some issues should be addressed with regulation).
deleted 12y ago
[deleted]
gdubs 12y ago
Maybe they shouldn't resort to expulsion for something kids have been doing for half a century anyway. I'm not saying they should allow it blindly, but I feel like getting kicked out of school is gonna do more damage than the weed.
- stephengillie 12y ago
  Under-tolerance is an ages-old issue for principal administrators. Kids often get kicked out of educational institutions for wearing or generating imagery of banned items.
mullingitover 12y ago
> "Harmless pot? New marijuana study shows brain damage in those 18-25" I downvoted you for endorsing this stain on the reputation of science journalism. Tiny sample size, writer exaggerates findings to craft a clickbait article title, it's awful. We deserve something better than tabloid reporting in our science articles.
- gdubs 12y ago
  I also disagreed with the parent comment, but meta point: I'm not sure down voting is fair in this situation. Parent seems genuine and earnest in their comment. It seems like it'd be enough to simply reply with the counter point...
  - mullingitover 12y ago
    I haven't seen an etiquette guide for HN anywhere, but if we can't downvote the promotion of bad science journalism, what can we downvote?
    - nilkn 12y ago
      Hateful, bigoted posts, of course.
    - anigbrowl 12y ago
      It isn't promotion of bad science journalism. It's a crap story, but there are 3 other links in there too. I'm strongly pro-legalization and think the concerns are overblowon, but a lot of people are using the 'bad science' complaint to silence a point of view they dislike.
      - mullingitover 12y ago
        It's true, I do find the old 'think of the children' appeal to emotion, and the trotting out of the 'gateway drug' myth to be distasteful. However, I'm not silencing anyone's point of view--I don't have admin rights on HN, just the ability to rate comments.
deleted 12y ago
[deleted]
jonasvp 12y ago
> "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana." This might well be true though I doubt it. I strongly suspect almost all of them started with alcohol. Be that as it may, that's really not the probability we're interested in. It's not "percentage of addicts who tried Cannabis" but "percentage of Cannabis users who go on to become addicts". Given the wide usage, the first number is meaningless, the second likely very low. Your friend's quote might as well be: "they had one thing in common: they all had a driver's license".

charlieflowers 12y ago

Paul Graham talks about people who "live in the future" -- in a specific area of their lives, they see clearly that some change is coming long before everyone else catches on. It seems the trend towards legalization of marijuana is one such area -- it probably is one of the next gold rushes. (In my opinion, 2 other such areas are virtual reality and the Rust programming language).

pyre 12y ago
How does the Rust programming language translate into a 'gold rush?'
- deleted 12y ago
  [deleted]
- sedev 12y ago
  It seems that they're saying that marijuana legalization is like a gold rush, not that Rust is --- i.e. marijuana legalization, Rust, and VR, are all manifestations of Living In The Future, and additionally, marijuana legalization is a gold-rush situation.
soup10 12y ago
Many cannabis dispensaries and growers have been successful small business for a long time now in states where it's legal. In fact dispensaries in California lobbied against full legalization in an effort to protect the existing economics. I guess they are making lots of money already and fear consolidation and industrial grow ops will change the business and hurt their margins. VR has a long way to go imo. Having used the first gen occulus, though interesting, it feels gimmicky and very much reminds me of 3D glasses(in terms of hype vs how cool the tech is in practice). Few people will willingly strap a vision obscuring black box to their face for more than a few minutes at a time to try it out. Probably worse than that, even if it was fun to play games with, it probably wouldn't catch on mainstream for a long time because the dork factor is incredibly high. It's like google glass on steroids. Rust is not that different from existing languages. I appear to be disagreeable today, apologies.

stephengillie 12y ago

Yet another cannabis article that completely ignores Seattle. Where's the reporting about Winterlife?

Crito 12y ago
While you can legally buy from Winterlife, Winterlife cannot legally sell to you. They aren't operating in a technically legal gray area, rather they are technically illegal but in practice gray (with local authorities acknowledging that they are within the spirit of legalization and not pursuing them for illegally selling.)
chaired 12y ago
Every time I meet one of their couriers in broad daylight, and they hand me a receipt, I feel like I'm just grazing a tiny part of history. It's not Rosa Parks level. It's a smaller matter, but it's still an important change for Western society, which legitimizes very, very few kinds of states of consciousness, and strongly favors the one that makes you most productive in a job.
- rozap 12y ago
  For minorities it's not a small matter. i502 is about so much more than getting high, it's about eliminating a policy which was so often enforced at the discretion of the officer and prosecutor, which opened the door for all kinds of discrimination. the war on drugs is one of the most damaging policies for society, and i502 is a substantial step in the right direction.
sv123 12y ago
Winterlife is taking the opportunity to cash in for the next few months until full retail shops open. What is essentially illegal weed dealing in plain site, relying on the lack of enforcement to stay in business. Unlicensed, not adhering to the rules of i502, akin to me advertising and delivering beer I brewed in my garage. Ballsy for sure, not anything revolutionary.

420365247 12y ago

Tranzbyte's new Zazzz marijuana vending machine looks pretty sweet though! I think it has the potential for countless uses, far beyond the cannabis industry. http://www.usatoday.com/story/tech/2014/04/14/pot-vending-machine/7704059/ http://www.usatoday.com/story/tech/2014/04/14/pot-vending-ma...

sandieman 12y ago
Have seen this for wine, and also required a breathalyzer. Cool tech but they eventually were removed and never saw it being used regularly.
- canvia 12y ago
  Regulation stifling innovation. Sad.

tptacek 12y ago

I thought this piece on Vox was pretty clear-eyed about the economic impact of legalized marijuana; it's skeptical about the value of the pot startup market (its author is a legalization advocate, as am I). http://www.vox.com/2014/4/16/5620322/how-legalized-pot-would-change-america http://www.vox.com/2014/4/16/5620322/how-legalized-pot-would...

midas007 12y ago
Startups seem more consumers than potential producers. Further it smells like a market about to bud and quickly become a brutal commodity like coffee or tea. It would be cool to see cannabis traded in the futures markets though.
- joe_inferno 12y ago
  "about to bud" I see what you did there
  - sizzle 12y ago
    you forgot "smells", which made me chuckle.
- pmorici 12y ago
  So long as there is the ambiguity of the law at the federal level where people who might be following state laws to the T run the risk of getting put in prison for years there will probably still be money to be made.
samstave 12y ago
If we are going to legalize pot, I would prefer that it be legal to send via post. I'd support a method where any individual address could subscribe to a certain amount of pot delivered via mail per month. I can already do this with a wine club... Why not a pot club.
- dangrossman 12y ago

objnotdefined 12y ago

I've spoken with people who work for the state of Oregon.... state employees who are working on the software infrastructure for recreational marijuana dealers. Licensing, taxing, etc. It's basically a scaled up version of the current system of medical growers/distributors but tailored for recreational use. That's how confident they are legalization is coming in the next few years.

StavrosK 12y ago
I thought it was legal in those states? Also, it's a bit of a virtuous cycle: legalization is coming because many people think it is coming.

samstave 12y ago

I've started a pot delivery system where you can select your delivery location via a smart-phone app; Doober. Like Uber - but for Pot - PM for details!