Pubdate: Thu, 26 Nov 2015
Source: Boulder Weekly (CO)
Column: Weed Between the Lines
Copyright: 2015 Boulder Weekly
Author: Sarah Haas


Celebrities Bring Big Money and Big Names to a Capped Marijuana Industry

On Nov. 9, Colorado's weed scene gained its capstone endorsement - 
Snoop Dogg launched his very own line of marijuana products including 
flower, chocolate bars, shatter, wax, drops and other candies.

Although there is talk of other celebrities launching high-end 
cannabis product lines in Colorado - from Freddie Gibbs to Willie 
Nelson to Bob Marley's family - the first cannabis launch and 
surrounding media storm goes to Snoop Dogg. Ever since he came onto 
the hip-hop scene in 1992 as a featured artist on Dr. Dre's The 
Chronic, Snoop Dogg has been an advocate and unofficial spokesperson 
for marijuana, and his place amongst its emerging industry seems natural.

"Since I've been at the forefront of this movement for over 20 years 
now, I'm a master of marijuana," said Snoop at the brand launch 
event. "Leafs By Snoop is truly the first mainstream cannabis brand 
in the world, and I am proud to be a pioneer."

The frontier he enters with Leafs' launch is a complicated landscape 
of a new industry rife with economic and regulatory inconsistencies. 
For most entrepreneurs, the money, resilience and network required to 
succeed are not enough to outweigh the risk of a cannabis business. 
But for Snoop, a celebrity with lots of brand equity and money to 
leverage, the road is paved with green.

The scrupulous strategic planning preceding the launch signifies that 
Leafs' Colorado retail is only the first in a bigger, national or 
international effort. In February 2015, Snoop Dogg was listed as the 
managing member of a Los Angeles-based VC fund called Casa Verde 
Capital, L.P. The fund has raised about $25 million to invest in new 
agriculture, wellness and research.

In September 2015, Snoop launched a website called Merry Jane that 
heralds itself as "the definitive cannabis resource on culture, news, 
food and style dedicated to expressing a new cannabis mentality." The 
website also happens to be the perfect place to push content and 
marketing for Leafs by Snoop.

Behind savvy business moves and launch parties lie implications for 
Colorado's weed economy. The influx of venture capital to the 
emerging industry will provide both short-term and long-term fiscal 
advantages for the state in terms of job creation, revenue and tax 
income. But the big money from mainstream brands trickling into the 
state clashes with the regulations in place to encourage slow growth 
and ensure that the money and accountability stays local.

Because Snoop is not a Colorado resident, he cannot grow or sell 
cannabis in Colorado. Requiring that marijuana businesses be owned 
and operated by Coloradans is meant to act as a control on the 
industry to keep supply in balance with the unpredictable demand of 
the new market.

Instead, Snoop is partnering with LivWell, a chain of 10 medical and 
recreational dispensaries across the state, to grow all of the flower 
for Leafs indefinitely. LivWell's short history is rife with 
controversy, including an incident in which they allegedly gave out 
infused samples in place of plain chocolates and a lawsuit, filed in 
October, accusing the company of using harmful pesticides in their 
grow operations. LivWell has yet to be penalized for either incident.

And, for two years, a Denver moratorium aimed at controlling industry 
growth has allowed only existing medical marijuana businesses to open 
recreational dispensaries, grow houses or edible manufacturers. That 
was set to expire Jan. 1, a prospect that has had eager entrepreneurs 
and investors lining up. But talk of extending the moratorium for two 
more years has recently put a damper on such plans.

The extension is backed by many established industry businesses that 
lobbied to keep new competition from joining the scene.

Michael Elliott, executive director of The Marijuana Industry Group, 
said in a press release that current industry players support 
expansion of the industry based on market demand. "The marijuana 
industry has helped spark an economic boom in Denver but at this 
point it appears the number of businesses is in line with market demand."

But the reality of the moratorium is that as new startups are kept 
out of the emerging industry, established businesses like LivWell 
will continue to grow as they align themselves with the new wave of 
mainstream marijuana trickling into the state. You can keep out the 
little guys with moratoriums and regulations, but they are no match 
for the brand equity contributed by a celebrity endorsement and the 
25 million dollars of venture capital funding that the star brings with him.
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MAP posted-by: Jay Bergstrom