By Meghan Cahill
Washington, D.C. – At first glance, the ComfyTree Cannabis Expo held Saturday, February 28, 2015, at the Holiday Inn Washington-Capitol Hotel in Southwest, appeared to be a typical Washington, D.C., conference. It was in a hotel, there were plenty of out-of-towners networking, and there was a registration area. However, it only took a few seconds for an onlooker to realize it wasn’t your run-of-the-mill D.C. summit. The ComfyTree Cannabis Expo is a traveling full-day conference dedicated to helping local entrepreneurs get ready for the green rush.
Mixed with the professionally attired attendees at the conference were dreadlocked hippies, bong-lined product tables, a young woman with a marijuana hair clip selling her Stinky Steve children’s books (Stinky Steve is your cannabuddy, here to explain medical marijuana safety to kids whose loved ones use it), and ComfyTree staff adorned with marijuana leaf-stamped t-shirts handing out marijuana leaf-stamped bags.
Walking towards the conference area, attendees passed the office of FEMA’s Department of Homeland Security. Once this moment of irony passed and one took an even closer look, it was evident this expo was held during a monumental moment in the District’s history and its fight for statehood via recreational marijuana legalization. It was also apparent that conference sponsors and speakers are making a lot of legal money with marijuana ventures. Expo entrepreneurs and conference attendees alike are all on the cusp of the green rush gamble, one that might actually pay out for those willing to take the risk.
Residents of Washington, D.C., voted to legalize recreational marijuana this past November. Despite Congress’ control over the District’s laws and its hopes of making the law void, the Council of the District of Columbia defied Congress. Initiative 71 was enacted on Thursday, February 26, 2015.
The District’s new homegrown marijuana initiative was clear motivation for many local residents to attend ComfyTree’s event. Medical marijuana has been legal in the District for some time under strict regulations, and now citizens want to prosper from the financial opportunity that might take place in their own backyards.
D.C. Council member David Grosso was on hand to discuss his stand for the voter-approved legalization and the steps that brought him and the District to their current Initiative 71 status. The ACLU’s report The War on Marijuana in Black and White pushed Grosso and other local politicians to support decriminalizing marijuana after reading that even though there is an almost equal 50/50 split of marijuana usage among blacks and whites, a disproportionate 91% of those arrested for marijuana in D.C. are African-Americans.
“The medical [marijuana] question was not one that was necessarily motivated from a racial justice perspective as much as the [decriminalization initiative] was; and obviously, for me, legalization is. But [medical marijuana] was a first step … a really powerful first step in D.C. to show that the sky didn’t fall when we had medical marijuana here and that it wasn’t that big a deal,” said Grosso. “It allowed us to move to the next step.”
The District’s current recreational legalization of marijuana is not taxed and regulated, and it is illegal for citizens to buy cannabis for recreational purposes. It is more or less a behind closed doors, trade your cannabis with a friend type of situation. Grosso stated D.C.’s states’ rights issue bluntly:
“Well the good Congress pretty much sucks … D.C., we are the only city in the country and the world that doesn’t have representation in Congress and has no voting power up there. But [Congress] oversee[s] our function.” He continued, “So basically we pass laws in the Council. We pass the budget, and then it goes up there [to Congress] for review. Ninety-nine percent of the time it just comes back after a layover period of 30 days or 45 days. Every so often, though, we have a member of Congress that, on some hot button issue, wants to get engaged in D.C. to get some points back in their own district. And this is where marijuana is kind of an interesting question.”
Regardless of this political quagmire, local citizens came to the conference to learn from experts who are already making money in the industry so they will be prepared for their next business venture if and when the purchase of recreational cannabis becomes legal in the District.
Corey Barnette, owner and operator of District Growers, a registered medical marijuana cultivator based in Washington, D.C., shared some tips at the “Marijuana 101” session. He addressed how to run a successful marijuana dispensary through solid business practices and sound market insights. As far as a dispensary business model goes, if the sale of recreational marijuana becomes legal in D.C., he believes that strategy and developing a niche product will be the key to success. “There are some people out there that just want to be the low cost high volume provider. I think it’s a horrible business strategy in the cannabis world,” said Corey. “You can sell your Hyundai. I’ll sell my Beemer.”
Initiative 71 allows the District’s residents to grow up to six marijuana plants (three mature) at a time in their home, possess two ounces of cannabis in their home, give one ounce to a friend in their home, and consume cannabis within the walls of one’s D.C. home. Note the importance of the word home. The possibility of accidentally possessing marijuana on federal land in D.C. is high, as federal sidewalks, monuments and parks are woven throughout the city. If you possess marijuana on a federally designated space, you are committing a federal offense and may be subject to some serious jail time.
Regardless of the ambiguities in Initiative 71, the conference’s expo room was packed with local and national advocates touting the District’s marijuana legalization win and its financial opportunities. Alongside the stereotypical marijuana paraphernalia product tables, the surprising standouts were not stoners and pipes.
The expo was overflowing with sleekly logoed booths manned with professionally dressed investment and insurance executives looking to back or support legal marijuana businesses; Orange County software gurus connecting cannabis customers to their perfect strain based on personal mood and user reviews via the Leafly app; and entrepreneurial product tables filled with hemp energy drinks, creative clothing lines, protein bars and lighting systems. Businesses, investors and brands were at this conference to make money or to learn how to make money.
The “Run your Cannabusiness like a Fortune 500 Company” session’s first two speakers were Micah Tapman, Partner and Program Manager of CanopyBoulder, and Scott Greiper, President and Founding Partner of Viridian Capital & Research. For those looking to find the capital to support their cannabusiness, this was the go-to team to learn how to get financial backing from investors. Turns out, it’s not unlike acquiring financial support for most businesses.
Tapman gave simple advice on what he needs to see from a potential cannabusiness investment opportunity. “[I’m looking to see] if you can work well with others and can you convince anyone your ideas are good.” The easiest way to do this is have a business partner or partners, even if it’s a friend, neighbor or family member. If you have at least one person on your team, it shows you can work with others and that your idea has been accepted as a good business opportunity. Then, Tapman said, you must validate your idea. “I’m not going to believe you until you take a survey with 100 people.”
Greiper, an investment banker and analyst straight from Wall Street, hammered home that the industry is growing incredibly fast and most investors are new to this game, including him. Viridian was founded in 2014. For cannabusinesses to succeed they need the proper financial know-how, and his company can provide the CFO and COO expertise for companies looking to fill that void. “What’s lacking [in cannabusiness] is seasoned professional executives,” said Greiper, “the Achilles heel.” He stated that the industry is an infant in terms of age but gaining participants fast. “Now there are [approximately] 200 public cannabis companies. Three years ago, there were only five.”
The one-day conference agenda was packed with informative investment, legal, business and current events sessions that were sandwiched in between several speed rounds of speakers. All sessions took place in a chandelier-adorned banquet room packed with 150 to 200 attendees throughout the day. Attendees were mostly advocates, media and those looking to make money responsibly.
In addition to the sincere attendees, there were a handful of get-rich-quick schemers, those so novice to the cannabis industry that they were unfamiliar with common terminology (one audience member asked what would happen when he picked up his “medicine” from a collective – did you pick up “your plant?”), a few stoned stereotypes, and a few shamelessly self-promotional people asking poorly veiled questions to hawk their own product or service. However, the majority of attendees simply wanted to learn how to set up a cannabusiness or invest in cannabusinesses despite the industry’s nebulous legal issues and stigmas.
If you want to learn how to set up a cannabusiness before marijuana is legal in your state, the ComfyTree conferences are a good place to start. If you decide to attend, do your homework in advance and refine your situational awareness skills so you can find opportunities that are right for you.