Big Weed

by Christian Hageseth

  I hope this book speaks to a lot of different people. But those who’ll get the most out of it are people like these:

  entrepreneurs of all stripes who are considering starting any new venture, or who are considering entering the cannabis industry in particular

  investors who have heard from their friends, attorneys, and accountants that cannabis is the hot new thing but who are hesitant about parting with their money until they learn more about the industry

  middle managers and small business owners who are interested in seeing how someone made the transition from a small business to a multimillion-dollar corporation

  employers who are interested in motivating or educating staffers with stories of success

  longtime marijuana lovers (and haters) who are intrigued by the big business that has literally grown around this strange little plant

  observers who are fascinated by the shift in American society and who are eager to learn more

  For all its seeming sophistication, the industry is also in a bit of a Wild West phase right now. On one hand, you’ve got entrepreneurs like me who are racing to establish market share. On the other hand, you’ve got cops, judges, and state regulators who are trying to figure out what legal marijuana means for their hallowed institutions. How do we decide case law? How do we regulate it? And the fact that it’s still a federal crime to grow and sell marijuana has huge implications beyond my inability to carry a corporate checkbook.

  Though most of my business dealings are privileged information, I will take you inside some of my meetings and conference calls to show you how it all goes down. You will meet a bizarre cast of characters in this book. For every Wall Street suit who’s dreaming of a piece of the big old marijuana brownie, there’s a colorful millionaire—a captain of industry or hip-hop star or an athlete—who is ringing my phone off the hook, wanting to invest in this burgeoning trade.

  But the way I see it, the real heroes of this story are money and the American public.

  Why do I say that? Look at it this way: When I was a kid, you could gamble legally in only two places in the United States: Atlantic City and the state of Nevada. Today you can enjoy a casino experience in twenty states in the country, and some form of gambling—racetracks, lotteries, scratch-off cards—are found in forty-eight U.S. states. Why? Money. As much as the powers that be hated vice, they hated losing potential tax revenue more.

  Here’s where the American public comes in. Consumers changed the history in the past simply by broadening their minds. In the 1930s, Americans toppled Prohibition. And they gradually let their lawmakers know that they were open to the idea of legalized gambling. The legislators listened. They had to.

  Well, today we’re in the same position with marijuana. The citizens of the United States were once content to believe what the federal government told them about the evils of marijuana. Now that they’re older, wiser, and have a few tokes under their belts, voters are less likely to be snowed. They know in their guts that the drug policies of the past forty years have failed massively and that it just might be time for their nation to try something new. Every time a voter hears someone—a politician, an activist, or some other naysayer—rail against marijuana, the voter is likely to think “Well, I smoked marijuana a couple of times, and nothing bad happened. I didn’t get hooked on cocaine. I hold down a decent job. I make decent money. I have a house, a mortgage, and kids. Ergo, methinks you’re full of shit.”

  Think about that: The thing that was once so evil is now being regarded as something responsible adults can enjoy, just the way they occasionally smoke, drink, or gamble.

  For decades, marijuana was in the hands of an underground culture—stereotyped as hippies and stoners—but it’s now shifting into the hands of mainstream America.

  What’s that mean? For one thing, it means that the story of marijuana in the twenty-first century will be told by people like me.

  Sit down, light up a joint, and let me tell you about my world.

  1

  Brave New World

  It all started the way a lot of businesses begin—on the golf course.

  The year was 2009, and I was between jobs. My attorney and good friend thought it might be a good idea for me to meet a client of his. He invited us to come play at the Red Rocks Country Club, one of the nicer country clubs in Denver, nestled in the same geologic formation as the iconic Red Rocks Amphitheatre.

  The guy I met, Jake, was a stocky Latino, with the build of a boxer.

  “What kind of business are you in?” I said.

  “You’ll like this,” my lawyer said, with a smile on his face.

  “Marijuana,” Jake said. “Legal, medical marijuana.”

  Oh yeah, I thought. I’d heard something about it, only in the vaguest way. I was a citizen of Colorado. I read the papers. I watched TV. And I knew what the average citizen knew: Voters had approved a law allowing medical marijuana back in 2000. Since then, the cannabis industry had risen from home growers cultivating a few plants on behalf of a few patients to a small number of professional dispensaries scattered throughout the state. But that was about all I knew. I had never set foot in one of those places. I knew nothing about the business. I was a businessman with a wife and three kids. And when medical marijuana was in its infancy, I was busy running a real estate enterprise.

  That said, I also was no angel. When I wanted to get high—and I did, from time to time—I bought my weed the old-fashioned way. From a buddy.

  “As a matter of fact, gentlemen,” I said, rooting around in one of the pockets of my golf bag, “I have some on me right now.”

  With a flourish, I whipped out a wooden “one-hitter,” a small wooden box that had both a small metal pipe and a small storage area that contained some ancient street weed. I had no idea when I’d bought this marijuana or how long it had lain hidden in the confines of my bag. I was just foolishly proud of the fact that I had it. Like I was some cool businessman living on the edge. Counterculture and proud.

  Well, Jake took one look at that shit and shook his head. “Check this out.”

  He produced his own Ziploc bag and handed it over.

  My God, there was no comparison. My weed was nearly black with age and smelled like the ass of a mummified skunk.

  Jake’s weed consisted of plump, sticky buds that were bright green and shot through with fine tendrils of floral color. They looked exactly like what they were: the flowers of a beautiful, generous plant.

  “Where did you get this?” I said. I needed to know his guy!

  Jake just laughed.

  I looked over my shoulder to be sure we were alone. On a weekday in summer, a golf course can be one of the most deserted places on the planet.

  “Can we smoke this here?” Jake asked my attorney.

  Well, we did, and we were still smoking when we got to the seventeenth hole, and let me tell you: Oh, wow. The beautiful view from the seventeenth hole at Red Rocks County Club just became that much more spectacular. Looking down the fairway as it disappeared out of sight, the tall buildings of downtown Denver seemed to be just beyond the hole.

  Holy shit.

  The second I took that first puff, my mind expanded. And I don’t mean that in the woo-woo, New Agey sense. I mean it in the practical sense.

  One puff, and I knew.

  I could smell, feel, and taste the difference between the street weed I’d smoked as a kid and the prime stuff lovingly created by someone who knew what he was doing.

  It was like night and day.

  Like the difference between that $8.99 cabernet sauvignon you tossed in your shopping cart at the supermarket because you needed some wine, any wine, tonight with dinner and that amazing bottle the sommelier brought to your table last year when you wanted something special for your anniversary.

  Like
the difference between a hastily gobbled Snickers bar and a nibble of an artisanal bar of hand-crafted chocolate with 70 percent cocoa content.

  Like the difference between Coors Light on a hot summer’s day and a microbrew crafted with the freshest hops possible and a few other things you didn’t even know you could put in beer.

  Like that.

  Holy shit, I thought. I’ve been smoking ditch weed all my life.

  “You should stop by,” Jake said. “We can help you get your red card.”

  I didn’t even know what that meant.

  Maybe you’re like me. When I get excited, I start thinking about possibilities. Opportunities. Implications. It took me all of ten minutes to go from a guy falling in love with what was getting him high to a business guy with some pretty obvious questions.

  “What’s it cost to grow?”

  Jake squinted as he lined up his shot. “Um, it varies.”

  “Well, what’s your margin?” He looked quizzical. “Your profit,” I said, trying to make myself clearer. “The difference between what it costs you to grow and what you sell it for. That tells you how much profit you’re gonna make.”

  “Well . . . I don’t know exactly, but the business has been great so far.”

  I looked at my attorney.

  He smiled.

  Jake was a nice guy. Medical weed was only his most recent endeavor. He had started a franchise restaurant, made it successful and sold it off, so he knew a good bit about business. And he knew a lot about weed. He had learned how to run somebody else’s business, but was he up to the challenge of creating something out of nothing? That is an entirely different skill set. It also happened to be my skill set.

  Jake, incidentally, has come a long way. As I write this, he and I are the respective chief executive officers of two of Colorado’s largest legal marijuana companies. We see each other occasionally at industry events and recently we met with the governor of Colorado together. But that day on the golf course, he needed some help, so I agreed to do a brief consulting gig with his firm.

  In that moment, though, before my buzz dissipated, I saw an entirely different business in my mind’s eye. I saw it as if it had already been built. They say that Michelangelo saw David inside that marble slab and only had to help the statue find its full expression. That’s how I felt when I realized what a great marijuana company could be like.

  A few days later, I was sitting in the office of a physician who worked in Colorado’s growing medical marijuana trade.

  If you wanted to buy medical marijuana in the state of Colorado, you needed to have a red card—official proof that you had jumped through all the hoops. Doctors didn’t write “prescriptions” for the stuff, they wrote “recommendations.”

  The doctor Jake hooked me up with was in his eighties. Kind eyes. Fuzzy gray hair loping over the tops of his ears. “So what’s troubling you?”

  Where do I start? The poor doc didn’t have enough time in the day to hear it all. Did he really want to hear how I’d lost my company more than a year ago when the market crashed? Did he really want to hear how I’d almost brought home a seven-figure payday—and then didn’t?

  “Anxiety,” I said, hitting upon a diagnosis he could probably use. “I have trouble sleeping. Been through a tough time lately. Does anxiety work?”

  “No,” he said. “It has to be one of the six qualifying conditions approved by the state, a physical ailment that the marijuana can help you treat.”

  That was marijuana’s gift to the world, its raison d’être in the new medical marketplace. While the rest of us prized it for its ability to get us high, there were people living with chronic illness—cancer patients, AIDS patients, to name a few—who wanted marijuana for its ability to extinguish pain, stimulate appetite, and banish nausea.

  Wait. Back in my youth I’d suffered an injury in a snowboarding accident and compressed a thoracic vertebrae in my back. The injury still bugged me. So much so that I used an inversion table to hang myself upside down from time to time. Stretching myself out was one of the only ways I’d found to chase the pain and numbness away.

  “That’ll do,” the doctor said.

  He initiated the paperwork and helped me fill out the state application. I stepped outside to get it notarized by someone in his office. Next, I needed to stop by the post office and mail it in to the state via registered mail. But I could walk out of the doctor’s office right now and buy up to 2 ounces of weed per visit.

  It sounded too good to be true. In fact, a lot of habitual marijuana users thought so, too. That’s why they stuck with buying their weed off the street.

  As I was about to leave, I lingered in the doctor’s office. I have a soft spot in my heart for docs. My dad was a former U.S. Navy flight surgeon. In December 1968, he soloed for the first time, earning his wings. The very next day, he delivered me at the hospital at the Naval Air Station in Pensacola, Florida. I grew up all over the United States—North Carolina, Washington, California, and finally Colorado. Ours was an interesting childhood, to say the least, but a distinctly middle-class one. The thought of an elderly doctor willing to write recommendations for marijuana struck me as odd.

  “If you don’t mind my asking,” I said, “why do you do this?”

  He shrugged and gave me another smile. “I always thought marijuana was harmless. I’m glad I’m able to finally do this for people.”

  Now that I had a red card in my pocket, I could legally enter any marijuana dispensary in the state. My first visit to Jake’s business impressed the hell out of me. Imagine walking in and hitting a wall of that powerful marijuana scent. Once again, I was blown away by the contrast between the smell of street weed and fresh marijuana.

  Jake’s crew had about ten tall glass jars, maybe a half gallon each, with latch lids on them, crammed with fat, healthy, colorful buds.

  His staff—people who called themselves “budtenders”—blew my mind when they asked me a single question: “What kind of marijuana do you like to smoke?”

  Well, shit, I didn’t even have the mental framework to be able to answer that question. As far back as I could remember, there was only one kind of marijuana and you got it from a buddy . . . who knew a guy who knew a guy who was going to pick some up from his friend today. So, if you brought your money by now, your buddy would have it later today. And sometimes those best-laid plans just didn’t go down.

  I remember being just a kid, about twelve years old, the first time I saw my older brother and his friends giggling over a black plastic film canister he was holding in his hands.

  “What’s that?” I asked them.

  “Nothing! Mind your own business.” They blew me off, dashed into my brother’s bedroom, and locked the door behind them.

  But I didn’t give up. “What’s that?” I asked the next time I saw them toting one of those little canisters.

  Nothing. Silence.

  And then one day, my brother blurted, “It’s just grass.” The smirk on his face gave it away.

  It’s just grass.

  It’s just grass.

  And then one day, they let me have a little toke. Wow. I laughed for the next few hours.

  I smoked in junior high and even high school. Not often, and I never allowed it to interfere with my relatively normal life. I played football and rugby and hung out with the jocks and preppies more than the stoners.

  But the memory of marijuana still remained with me, as did the whole marijuana experience. The semi-ridiculous dance of calling around all of your friends to see if anyone knew someone who had some. Finally finding that one buddy . . . who knew the guy who knew a guy. Then hammering out a price. Pulling together all the crumpled fives, tens, and singles you and your friends could muster. The meet. The buy. The furtive smokefest in your parents’ basement, always accompanied by the post-toke, ra
pacious romp through the pantry. Lots of laughter. Music. TV. The paranoia that sometimes gripped us: Would someone notice our red eyes, our incessant laughter, or the remnants of our outing?

  That was the 1980s for me.

  The marijuana we smoked as kids was always sourced the same way. We had one choice, paid one price when we were lucky enough to get to the guy who knew the guy.

  But here in Jake’s dispensary, I was beginning to learn that there were lots of different types of marijuana. Different strains. Each with different names and different personalities.

  I had a lot to learn, but right now I needed to get down to business. I needed about five or six hours with Jake to figure out how his business actually worked so I could put together a spreadsheet that spelled it all out.

  The numbers were fascinating. It cost vendors like Jake about $500 to $800 to grow a pound of legal marijuana. That probably sounds like a lot of money. It did to me. But what did I know? A plant is a plant is a plant. People grew tomatoes and lettuce in their backyards each summer, and it wasn’t rocket science. I didn’t understand why marijuana had to be that much more difficult or expensive. The kicker was guys like Jake could turn around and sell one of those same pounds—at a quarter-ounce at a time—for $6,400 retail. Or he could sell a pound for about $4,000 wholesale at that time.

  A profit margin of 800 percent to 1,300 percent. Un-fucking-believable!

  The numbers looked good for a retail business. Really good.

  So much so that I couldn’t get the marijuana business out of my head even after my consulting gig with Jake was up. I was talking about it with everyone I met.

  What surprised me was that, although everyone in the upper-middle-class suburban social circle I hung out in had heard that medical marijuana was now legal, very few people had had much experience with it. They’d say the most ridiculous things when I brought it up.