It was inevitable that the legalization of cannabis would attract a certain number of insensate greedheads to the industry. And I suppose it was also inevitable that some of them would be terminally stupid and self-destructive.
That’s one explanation of today’s announcement by former Microsoft employee Jamen Shively that he plans to create a national brand of marijuana and is working out the details about how to import it from Mexico.
Mr. Shively has now painted a target on his shirt-front. Should he actually engage in the business of growing or selling cannabis, or owning businesses that do so, he has a very good chance of a long, all-expenses-paid vacation at the expense of federal taxpayers.
If, when he says that he’s been smoking cannabis for a year and a half, he means that he’s been stoned continuously over that period, it’s barely possible that he doesn’t understand the risks; in that case, he might be sincerely misguided.
But when Shively talks about “minting more millionaires than Microsoft,” I start to wonder whether he’s engaged in a racket much safer than pot-vending: to wit, stock promotion. If you were really going to sell cannabis, you wouldn’t toot your horn. But if you wanted to sell securities, a press conference with Vicente Fox sounds like just the thing.
Since there’s one born every minute, Shively should have no problem raising a bunch of cash from greedy suckers, keeping a large fraction of the stock in his new company in his own hands. There are a number of legal and quasi-legal ways of moving the investors’ cash from the corporate balance sheet to the promoter’s pocket. Or he could just sell some of his stock before the market gets wise. As long as he never actually engages in the cannabis trade, he’s safe from the DEA. The SEC isn’t nearly as aggressive, and the potential sentences are much shorter.
Update Despite the pre-announcement hype about a deal with Mexico, the actual press conference didn’t actually commit to much of anything. Vicente Fox showed up, as promised, to bless the whole thing and thus demonstrate his post-Presidential enlightenment on the drug issue. Shively grandiosely announced an “international” network and the “first national brand of retail cannabis,”and said that his new venture had “acquired the rights” to various medical-pot vendors and created a “risk-mitigated investment vehicle,” but why anyone would bother to buy the Diego Pellicer brand of weed was left as an exercise for the reader.
The firm’s website explains how they’re going to conspire to commit federal felonies while remaining “completely legal”: “We are committed to building our business under the assumption that the federal government will permit us to operate” wherever cannabis is legal under state law.
Tell me: How many legs does a lamb have, if you are committed to building your business under the assumption that the tail is a leg?
I admit I haven’t done any deep thinking on this, as it never occurred to me someone would try it. But isn’t part of the point of legalizing to *stop* sending money to bad people doing bad things in Mexico? I am not aware of any legal or non-DTO mj from Mexico, though again, I’m in the bleachers.
I do not necessarily agree that such a stock scheme would work, though. There can’t be that many dumb people, can there? The MS association aside, maybe he’s not very, um, reality-oriented?
I’ve worked in the financial industry. Yes, there are that many dumb people. Many, many multiples of that many.
Mexico is a No-Go as far as legally importing marijuana. The smart way of going about it would be to produce as many jobs here as possible( not to mention the already large workforce in the medical marijuana business that would lose employment to the interface of a corporate market) rather fueling greedy Mexican drug lords. Although I’m in favor of the movement toward legalizing freedom and taxing revenue, I do not condone the importing from Mexico. That’s the wrong way of doing it.
Interface=Emergance
If, when he says that he’s been smoking cannabis for a year and a half, he means that he’s been stoned continuously over that period, it’s barely possible that he doesn’t understand the risks
*Rolls eyes*
Yes, indeed, there are a number of legal and quasi-legal ways of moving investors’ cash to one’s pockets. None of them involve telling outright lies. And the SEC isn’t the only possible enforcer-most state AGs are out to make a name for themselves, and this is the case to do it with.
It’s still safer than pot-vending.
Just what we need: Looks like Shively wants to do for the marijuana market what Paul Allen and Ticketmaster did for live entertainment — buy up the market and then jack the prices way up with “convenience fees”.
Leave it to a former Microsoft corporate strategy manager to completely ruin what should otherwise be a pleasant experience. Next thing you know, you’ll have to accept an “end user agreement” that “licenses” you to use the product (but only in ways approved by the licensor), and you’ll be accused of “piracy” for sharing a joint with your friends without paying for extra license fees. After that, they’ll extort license fees from their competitors who wish to avoid impossibly expensive civil trials with nebulous claims of unauthorized use of their undefined “intellectual property”, ala Microsoft vs. Android phone manufacturers.
Maybe it’s just me getting old, but the way things are going in Washington, it’s looking like legalized marijuana could soon have folks longing for the “good old days” of prohibition when grass was cheaper and freer. Go Colorado!
A wholesale tax on recreational marijuana was capped at 15% until the year 2017 as a way to ensure that prices of the drug will be kept low. “The idea is to put the underground marijuana market out of business,†Tvert said.
I’ve wondered what might happen should pot become legal nationwide, and “corporate pot” seems all but inevitable. Wouldn’t THAT be the thing that would make folks long for the “good old days”?
It’s funny how people who long for the ‘cheap weed’ of the ‘good old days’ never seem to calculate the whole ‘going to jail’ possibility in their reminiscing.
“Going to jail” is always going to be a possibility, regardless of marijuana’s legal status:
“There is no one in the United States over the age of 18 who cannot be indicted for some federal crime,” said John Baker, a retired Louisiana State University law professor who has also tried counting the number of new federal crimes created in recent years. “That is not an exaggeration.”
The brand name should be “Brooklyn Bridge”.
or maybe “Eiffel Tower”.
My vote’s for “Trojan Horse”.
Since they are talking about “branding” of Mexican cartel pot, I suggest “El Brickada Schwagado”. At least that’s descriptive of the actual product.
He too late there is many cannabis stocks, and I have made a lot of money on some of them!
It won’t be long before the US begins imposing sanctions on countries that
a) ban or limit importation of marijuana produced in the US,
b) violate or fail to protect the trademarks of marijuana produced or marketed by the US, or
c) try to counteract the US’ policies to stimulate marijuana exports (dumping, subsidies, etc.)
Gart Valenc
Twitter: @gartvalenc
Yet another argument for legalizing in order to regulate.
(in case the comment thread mistakes the url for a chocolate chip cookie and gobbles it up, here’s the link: http://www.lawyersgunsmoneyblog.com/2013/05/the-cost-of-illegal-marijuana-to-owls )
No marcel, we can’t legalize marijuana, no matter how much harm comes from it being illegal, because that would mean more people abusing it. Hasn’t Kleiman taught you anything?
Not sure whose work you’ve been reading, but it certainly isn’t mine.
There will be advantages to getting rid of prohibition. There will also be disadvantages (including people doing for real what this stock promoter is pretending to do: relentlessly promoting drug abuse for profit).
Once you understand that actual policies have both good and bad results, you’re ready to start arguing about whether the results of some specific form of cannabis legalization (they’re not all the same) would be better or worse than the results of continuing current policies, or modifying them in ways other than legalization.
You don’t know me Mark so I understand I have no esteemed credential for you to gauge my opinion with, so I will just say that I’m an educated person capable of high level critical thinking. I will add to that that I’ve spent over 30 years as a professional in the cannabis trade in northern CA along with related experiences around the world. None of the drug policy experts I’m familiar with have anything like the firsthand on the ground experience with this subject that I do. And that matters, quite a bit in fact. It vexes me to no end that basically all the folks in a position to make policy have little to no actual practical living experience with the plant and it’s users across the spectrum of real daily life in America.
Certainly, the repeal of marijuana prohibition is not a black or white, all good or all bad proposition. However I very strongly disagree with the idea that the argument about legalization can be assumed to be roughly balanced or reasonably fought to a draw. Actually, I find that notion ridiculous. The single biggest factor that weighs on the side of the resistance to legalization (that is a legalization equivalent to the status of alcohol in the form of beer and wine), is the status quo, that’s all. All the handwringing and speculative concerns I see put forward as arguments for retaining and preserving anything less than legalization are made purely on the basis of giving too much weight to unsubstantiated fears that exaggerate the true realistic scale of the potential harms or problems. Allow me to assign hypothetical percentages to the weighted outcomes of any genuine debate that was limited to actual facts, and did not allow hyperbolic speculations or assertions. The preponderance for legalizing would easily exceed 65 to 70%, while the arguments for preserving criminal penalties for possession, use or even production and distribution would be lucky to muster 30%. Obviously this example is easily dismissible, but I use it only to qualify and respond to the point you’ve made. There’s absolutely no way that continuing current policies would on balance be a better choice than a well implemented legalization.
I take issue with your apparently assumed premise that all use of marijuana is abuse, any more than relentlessly promoting the fine pinot noirs and chardonnays from Burgundy is promoting alcohol abuse for profit. You don;t really think that do you?
Axe. Meet Grind.
That seems unfair, CoffeeJunkie. Surely Ned knows that legalization will put him and the other “professionals in the cannabis trade” out of business. That’s why the Emerald Triangle voted against Prop. 19.
But Ned, try reading what I’ve written before criticizing it. Of course not all use is abuse. But equally of course half or more of the volume consumed and sold is sold to and consumed by people with bad habits, just as is the case for alcohol.
Isn’t this whole thing transparently asinine and fraudulent? If he’d said he was going to launch a Washington State marijuana brand, with plans for expansion as other states made it legal (under state laws), that would be one thing, though he’d still have huge federal problems from the interstate commerce. But he’s announced his intention to traffic in marijuana across state lines and across the flipping US/Mexico border. Even if - as we hope against hope - the Feds don’t interfere in Washington’s experiment, there is little chance they’ll ignore commercial marijuana shipment across state lines, and none they’d ignore commercial marijuana shipment across the US border. Heck, those are the areas where the Feds have the best constitutional arguments for interfering in the trade, and they’re not exactly well disposed to it.
Wow. Just Wow. Reminds me of those small-town, carnival barkers trying to get people to play a game to win a big, stuffed animal.
Of course, those games are rigged where it is almost impossible to win and you only lose your money.
Hiding behind SEC rules will not save you from the DEA, DOJ, FBI, IRS, or DTOs.
Let’s wait and see if he is arrested for conspiracy to traffic.
Seems to me he’s trying to create an uproar to force a federal response so he may move forward. He’s quite wealthy independently and has no need to fleece people.
Everyone is assuming that Shively is independently wealthy. We simply don’t know whether he is or he isn’t, however his new company, “Diego Pellicer”, has only raised $125,000. This hardly sounds like a new venture being funded by a millionaire. I don’t think I’ve ever seen this much international press regarding a new company with so little capital investment. Don’t you need more than that to open a “7-11” or a “McDonalds” franchise? How many of the “1,000 new employees” can be paid with a paultry $125,000?
At least Shively’s, rather non-descript, “investment” in John Davis’ two dispensaries may allow Davis to finally pay off his current outstanding debts to his previous partner in the two dispensaries. You can bet that Shively’s name is not anywhere on the corporate paperwork or tax forms for these two illegal marijuana sales outlets. I’m willing to bet that Shively’s “option” in this deal is to be able to “opt out” of any possible criminal prosecutions for ownership of this illegal marijuana distribution company that is currently violating both state and Federal laws.
I’m sorry, but your contention that he is wealthy and thus “has no need to fleece people”, is just naive. The name “Bernie Madoff” comes to mind as just one of the many millionaires who have used their own wealth to perpetuate a gigantic “ponzi” scheme on other millionaires. It’s pretty tough to be working a 9-5 job at Starbucks and get millionaires to invest with you in a crazy, and federally illegal, scheme to control “40% of the worldwide marijuana market”.
Every independently wealthy individual knows the first rule of business — NEVER use your own money.
From what I’ve been able to glean, Shively is bringing the Microsoft mentality to the issue full-on. His angle seems to be all about “intellectual property”. He hasn’t been talking about getting into pot production and distribution directly, he’s been talking about buying “rights” to marijuana “brands” produced and distributed by others who are doing the actual federal-law-breaking. I think he thinks he sees a lot of opportunity for rent-seeking in an emerging market and he’s trying to beat everyone to it.
But he HAS been talking about growing and selling marijuana! He’s talked about buying hundreds of dispensaries. Even if you’re correct, his activities in financing, and profiting from, these illegal activities, fall under the RICO statutes. If that weren’t the case, all the drug cartels would do is simply set up front companies for their illegal activities and use them to hide their profits from the Feds.
OH….forgot….they already do that! So what in Shively’s plan make him any different or anymore immune from the Federal laws?
I think Kleiman is absolutely right on this…it sounds like a classic penny stock scam. If the Feds don’t get him first, the State Attorney General certainly will. If he goes any further, the DEA and the DOJ will show him that the “rent-seeking” model is probably not going to work and he may very well beat others in this “emerging market”…..to a federal prison cell.
He’s made a calculation about the movement and current state of public opinion and the political circumstances. The higher profile he is about this, the more difficult a target he becomes. Prosecution of very high profile people in this creates ever bigger PR problems for Federal prosecutors. Prosecutors are accustomed to playing the White Knight against the “bad guy”. That’s no longer the case with Federal pot prosecutions in many parts of the country. That’s becoming a major factor in prosecutorial discretion, whether they admit it or not.
Or this is the perfect opportunity for the Feds to send a clear message to any other millionaire pot investors that think they can get away with violating Federal laws with impunity, simply because they’re high profile. Bernie Madoff was very wealthy and very high profile. That didn’t stop the Feds from aggressively prosecuting him.
Well, having spent the majority of yesterday afternoon meeting with my prospective business partner, and having backed the numbers out of the current proposed scheme, there were two hard and fast conclusions we took away. The first was-Shively is a joke, he can’t do what he’s proposing. He’s selling castles in the clouds. The second is, it will be quite a feat for the legal market with the proposed levels of taxation to ever take a sizeable chunk of the Black Market away. The numbers aren’t there. I am actually beginning to wonder if there will be any Marijuana available in the State Stores at all. I not only do not see big business taking over pot in Washington, I do not see ANY business taking over the pot in Washington. We are moving ahead on the premise that pretty quickly the State will have to come to the same conclusion. Otherwise, Washington State is on a fast track to a grey market that you aren’t going to be able to tax.
The Colorado legislature has already promised to kill their “legalization” initiative (64) if the promised revenues do not materialize. Washington’s I-502 has even less chance of creating the revenues promised by the initiative’s sponsors. It won’t be the Feds that kill off I-502. All they have to do is wait and the state legislature will do it for them. How many more millions will the, cash strapped, Washington legislature pour into setting up this program without seeing a dime of tax revenue?
I’m glad that Mr. Kleiman has now pointed out that ANYONE who aquires a Liquor Control Board license to grow and sell marijuana is likely to get a lengthy, all expense paid, trip to “Club-FED” on the taxpayer’s dime. Mark, your analysis of Shively was spot on and I applaud you for it. Do you finally understand why I opposed this initiative? We now have the first voter approved “per se” DUID law in the country, no stores or tax revenues, and the state legislature attempting to put the Liquor Control board in charge of forcing medical cannabis to comply with the provisions of I-502….which include now personal growing and no concentrates, like “Rick Simpson” oil for treating cancer patients. What’s next, putting the state “Fish and Game” Department in charge of brain surgery in Washington? I-502 is creating now creating exactly the “Alice in Wonderland” experience for all of us that we predicted two years ago.
I-502 will go down faster than the Titanic and the state legislature, with the help of the LCB, is going to make sure that medical cannabis patients are neatly loaded on board the ship before they sink it. Remember Alison Holcomb promising that I-502 would affect the patients? Even Pinnochio would be proud of Holcomb. I’m just wondering why SHE hasn’t commented on Shively’s vague statements about a “trade agreement” with the ONLY people growing marijuana in Mexico….the same violent drug cartels that I-502 was going to put out of business. And to think, all this entertainment and we’re barely seven months into the juiciest parts of this drama. This can only get more bizarre as the Liquor Control Board is finally forced to answer some of the really tough questions regarding the implementation of this law…. like how are they going to collect all of this tax money when none of these businesses can open a bank account?
Welcome to “legalization”, Washington style.
In what world, what reality, in what State, would the failure of the State marketing and taxation scheme overturn a citizen initiative? Steve, you are turning into a joke. You hate I 502. You worked to kill it from the moment you heard about it. Get used to the idea, because it’s here, it’s going to stay, and eventually, it’s gonna work. Because the basic premise is sound, the particulars can be sorted.
No matter how much it may vex you, the failure of the tax and retail scheme does not mean the initiative will be thrown out. I expect the State will wise up, and it’s going to happen quickly….as soon as real businessmen (like me) step up and provide a real working template.
You are correct that I fought I-502, in fact, I ran the “NO ON I-502 Committee”. That’s not a secret (I hope!) Unfortunately, it will never work, which is why I opposed it in the first place. Despite your agruments to the contrary, “the basic premise” was NEVER sound, and because of that, it can never simply be “sorted out”.
It was a shame that $6.5 million was spent to pass a “legalization” bill….that did not actually legalize marijuana, even on a state level. For that much money, we could have actually legalized it. We could have descheduled it here in the state and called for the State Attorney General to inform Holder’s Justice Department that they must take it out of Schedule 1 Federally. The state could then have fought off any attempt at Federal premption under Title 21, Section 903…the same federal law that keeps the feds from stopping the passage of state medical cannabis laws. But they didn’t do that. Marijuana is still illegal in the state of Washington. I don’t quite know how to get that past your cloud of potential profits, but legally, it’s the truth.
As for the state changing a voter approved initiative, including getting rid of it altogether, that’s simple. The legislature can ALWAYS get rid of an initiative. In the first two years it’s a little tougher to change it here in Washington. It takes a 2/3rds majority in both the Senate and the House, but that’s it. The legislature has already changed part of I-502 this session and it only took 48 hours, and they did it with a 99.5% majority. In Colorado, the legislature there has promised to kill their initiative (64) if it doesn’t bring in the promised tax revenues. Washington’s legislature can, and will, do exactly the same thing. As I’ve said so many times before, this initiative was written to pass, but never to actually be successfully implemented. Once the state has given the Liquor Control Board millions of dollars and there are still no tax revenue flowing back the other direction, the spigot will be shut of very quickly. Again….48 hours is all it took this year to get a 99.5% vote to change the initiative. No tax money….no more I-502…bank on it.
I’m glad that there are “real businessmen” like you who plan to straighten out the legislature and “provide a real working template”. I’m not sure how you plan to “wise up” those legislators, but I’m certainly looking forward to learning by your example.:-) Anyone who goes by the name of “darkcycle” must certainly have a secret plan for this. I’m certain we’d all like to hear what your “replacement” plan for I-502 entails.
I-502’s success will not “vex” me on little bit. Frankly, watching this whole thing play out, just as predicted, is providing many of us with more entertainment than the first “Cheech & Chong” movie. We have a “Microsoft millionaire”, a former Mexican president, and Mexican drug cartels ready to set up a trade agreement to sell Mexican brick weed through the State Liquor Control Board stores. If you wrote a script like that and tried to sell it, everyone would say that it’s simply too unbelievable.
It’s sad because we proved we could have passed real legalization here in Washington. I’m mad because this will now set us back so far that we will end up far behind most other states in finally passing a workable law here in Washington.
Feel free to contact me when you have you I-502 business up and successfully running. Then you can send me a big “I told you so”. In the meantime, I’ll continue to watch this sad comedy play out. I just hope that the legitimate patients don’t have to suffer because Alison Holcomb sold the voters a Trojan Horse.
No license for you! Come back in 10 years. (aka Seinfeld’s “Soup Nazi”)
I have the solution for his little problem with federal law. My attorneys will be filing my petition in the U.S. Supreme Court next month. You can read my petition for rehearing in the appeal court at: http://resources.iowamedicalmarijuana.org/petition/usca_11_1265_20130209.pdf
You can read more about this petition at: http://petition.iowamedicalmarijuana.org/