Pubdate: Sun, 01 Mar 2015
Source: Washington Post (DC)
Copyright: 2015 The Washington Post Company
Contact: http://mapinc.org/url/mUgeOPdZ
Website: http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Author: John Woodrow Cox

BUDDING POT MOGULS CRUISE D.C.'S FIRST EXPO

In a chandeliered banquet hall not far from the U.S. Capitol on 
Saturday, a man with a Duke MBA and a Wall Street background offered 
the same sort of tips often given to aspiring entrepreneurs in places 
like this one: Develop a clear business plan; raise enough capital to 
weather setbacks; find a niche and own it.

Listening were 150 or so people packed into rows of cushioned 
red-and-gold chairs at the District's first "Cannabis Academy," an 
event perfectly timed to capitalize on the rush from the city's newly 
legalized marijuana-growing marketplace. Butthe stereotypical images 
of stoner culture-leaf-adorned-Bob Marley flags and smoky photos of 
piled-high pot-were, by design, nowhere in sight at the Holiday Inn. 
The crowd, more grayhaired than long-haired, sipped coffee and 
thumbed through 100-plus page workbooks with categories such as 
"Legal" and "Accounting & Merchant Services."

Less Cheech and Chong, more Berkshire Hathaway. And for good reason. 
Attendees had paid up to $299 each for instruction on how to get 
rich, not high, in an industry that a recent report said could 
generate $35 billion a year by 2020 if the wave of marijuana 
legalization continues.

So, on the first weekend since pot became lawful in the city, the 
city is hosting ComfyTree's two-day training session and job expo to 
prepare the nation's capital for the "Green Rush," a term used for 
the deluge of financial opportunity expected to follow legalization. 
How green that rush will actually run in the District, of course, 
remains unclear given that the city still prohibits the drug from 
being bought or sold.

This convention, though, isn't just a how-to. The academy's polish 
and professionalism attempts to convince skeptics that the marijuana 
industry belongs not inside hazy basements or beneath darkened 
bleachers but in the commercial mainstream, alongside wine, liquor and beer.

The academy was created by a University of Illinois PhD student and a 
finance manager at a Fortune 500 company. It was organized by a 
public relations veteran who has planned D.C. conferences for heads 
of state. Its expo was attended by the subsidiary of a Washington 
state firm that invests exclusively in cannabis companies and expects 
to amass $75 million in its latest round of fundraising.

"The industry is changing," said Micah Tapman, one of Saturday's 
presenters. "This isn't about showing up in a tie-dye T-shirt and 
long hair to pitch to an investor."

Tapman, a retired Marine with an MBA from George Washington 
University, is a partner at Canopy Boulder, a company in Colorado 
that has raised $1.2 million to invest in and accelerate the growth 
of "cannabusinesses," as they're often called.

The bustling expo, expected to draw about 1,000 people over the two 
days, had a broad range of commercial enterprises - everything from 
security systems to insurance, from clothing brands to energy drinks.

The academy and its sponsors represent, in a sense, a classic attempt 
to rebrand a product still haunted by the ghosts of "Reefer Madness". 
But it won't be easy. Throughout the afternoon, the expo's main room 
smelled of its star product, and some people wandered around visibly stoned.

Still, the industry's leading entrepreneurs have developed Web sites 
as refined as those of big-money private equity firms, and they talk 
more about policy, regulation and taxes than they do about strains, 
effects and highs.

Even terminology is carefully managed, with pot, weed and dope 
avoided in favor of a more clinical moniker: cannabis. 'Trying to get 
a foothold'

Behind a table at the expo's center stood a guy in a dark beard, 
black-rimmed glasses and a baseball cap adorned with the image of a 
man smoking a blunt while flying a bicycle. It is intended to evoke 
the iconic scene from "E.T. the Extra-Terrestrial" - because Rico 
Valderrama's clothing brand, "Phone Homie," is also a play on the 
film's famous line, "phone home."

As two men sifted through a stack of his stickers, a woman nearby 
overheard Valderrama, 38, discussing trademark issues. She handed him 
a white business card.

"Mindy B. Pava," it read. "Kelley Drye & Warren LLP." Pava is an 
associate attorney at the law firm, which has offices from coast to coast.

"This is a big up-and-coming industry," she told him. "We're 
interested in seeing if there's any legal needs for these companies."

Her firm, she said later, expects the burgeoning market to create a 
multitude of new revenue streams for law practices. New companies 
will need help understanding zoning laws, tenant rights, labeling 
guidelines and corporate real estate.

Her pitch spoke to a big question that lingered throughout Saturday's 
event: How do District entrepreneurs legally profit off pot if they 
can't legally buy or sell it?

Some have suggested "pot clubs" in which people pay for a membership 
to participate in some other activity (knitting, for example) and are 
"gifted" marijuana. And though D.C. Mayor Muriel E. Bowser (D) 
submitted emergency legislation last week to prevent that exact 
activity, cannabis entrepreneurs doubt such enterprises can be prohibited.

But the law does allow residents to home-grow up to six marijuana 
plants, three of which can be mature at once.

Daniel Funk, 37, works in construction and predicts that many D.C. 
residents will want to grow their own-though perhaps fewer will want 
to undertake the involved process of installing the necessary equipment.

That, Funk hopes, is where he'll come in. "I'm just trying to get a 
foothold," he said, gripping a stack of business cards.

Meanwhile, in the expo room's farthest corner, a crowd had gathered 
around an object that looked like an extra-large white vase capped 
with an inverted saucer.

"ROOT" is, in simple terms, an automated growing device - which looks 
more like a sculpture - and can hold up to four plants, depending on 
their size. It's priced at $299 and is scheduled to ship to consumers 
by year's end, according to its creators, each of whom boasts a 
degree from the University of Pennsylvania - one in mechanical 
engineering, the other in architecture.

'Trainwreck' and 'AK- 47'

For aspiring entrepreneurs, the industry's murky future is a 
double-edged sword. While ever-evolving and unpredictable legislation 
increases their risk, it also allows them to exist. If the market was 
suddenly stable, it could attract massive institutional investors so 
powerful that smaller players couldn't compete.

The legal cannabis market grew from $1.5 billion in 2013 to $2.7 
billion in 2014, according to research by the ArcView Group. That's a 
significant leap, but probably still not enough of one for a private 
equity fund to invest, say, $500 million. Instead, the growth has 
prompted an invasion of fortune-seeking MBAs.

Still, despite the new presence of ties and wingtips, the industry 
may never fully shake its bleary-eyed, not-so-adult, giggles- and 
munchies-inducing image in American culture.

The District's top strain of pot, for example, is called 
"Trainwreck," according to user ratings on Leafly (essentially the 
Yelp of marijuana). Other national favorites include "Green Crack," 
"Girl Scout Cookies" and "AK-47." Compare those to some of the 
country's most popular wine brands: Beringer, La Crema and Clos Du Bois.

The industry's quirks were on subtle display throughout Saturday's event.

Two bearded attendees melted into a pair of lounge chairs and, 
between long stretches of gazing at the ceiling, discussed how much 
they wished a rave would break out on the table in front of them. 
Nearby, a woman with a hair clip that resembled marijuana leaves 
stood behind a table covered with children's books starring "Stinky 
Steve," a green-striped cartoon skunk who explains pot to kids.

This "Cannabuddy," as the skunk's Web site describes him, transports 
curious children to his "magical forest" and "gazing pond" where, 
apparently, he answers their questions.

And then there was Valderrama, the entrepreneur who took the lawyer's 
business card. His film-themed clothing brand, he explained, is 
inspired by the way friends used to describe his blunts: As big as 
E.T.'s finger.
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MAP posted-by: Jay Bergstrom