Silicon Valley Tries to Alter the Perception of Cannabis | Hacker News Reader

Silicon Valley Tries to Alter the Perception of Cannabis

nytimes.com

85 pointsmackmcconnell95 comments

Very few people are going to get rich off of cannabis. There's really nothing novel about any part of the industry except that it's now legal. Indoor growing / hydroponics are used for a wide variety of plants, so the tech on the production front is already mature (if not commoditized). Because it's pretty cheap to produce and doesn't take a ton of special knowledge, wide legalization will see a race to the bottom on price (along with razor-thin margins for growers). Prices are still very high right now because nobody can achieve sufficient scale (again, thanks to the weird legal environment) but once they do, prices and margins will fall and a lot of growers will get bought out or go out of business. It doesn't really cost much to grow super-high quality marijuana on an industrial scale.

The rest of the value chain is really nothing novel either if you ignore the weird regulatory environment that currently exists. A retail store selling weed is not much different from any other retail store. A delivery service is still subject to the same fundamental issues as any other delivery service -- and when weed becomes really cheap, a $10 delivery fee may not make sense when you're buying $20 worth of weed. There's room in the market for differing tastes and consumption methods, but those too are more or less commoditized and can use general-purpose industrial processing equipment.

There's a boom right now because the market is growing quickly, but there will be a corresponding crash once the consumer market starts to hit the point where scale matters.

I personally feel you underestimate how much money there is to be made DURING the race to the bottom. Sure 5 years from now you may not be able to charge a $10 delivery fee. But that's 5 years where you can, grow a company, pivot when the time is right and new market trends emerge.

I think your sentiment towards the growing side is spot on though. Large players with experience growing produce and other plants will swoop in and dominate.

Delivery businesses in general are hard to make a buck in. Most of the ones currently operating are only successful because they either charge sky-high delivery fees or they're operating at a loss to gain market share. It's not like hiring people to deliver things is a new concept.

There may not be much money for very long in selling marijuana yourself, but there are probably good "selling shovels to miners" opportunities in providing products and services to help people navigate the "weird" legal and regulatory environment. That environment will stay "weird" for a good long time, probably indefinitely, if regulations regarding other "sin" markets like cigarettes, alcohol, and gambling are any indication.

Yeah, there's a market for consulting and compliance work because it will at the very minimum be regulated, but again - there are huge companies that already do a lot of this work, and once the legal status is cleared up a little more, they'll just expand their existing practices and maybe buy a few boutique companies for their client lists. I'm thinking Big 4 audit / accounting firms here, because that type of compliance work is right up their alley.

His point went far beyond 'consulting and compliance'. "Selling shovels to miners" is spot on - there's hundreds of millions of 'users' worldwide who spend money not only on the actual cannabis but also on items to supports it's use/storage/transportation.

> It doesn't really cost much to grow super-high quality marijuana on an industrial scale.

Personally, I grow one or two plants on my balcony in the summer. It costs me about nothing and produces more weed than I need (being an occasional consumer).

Anybody with a garden can easily grow a lot of weed. I wonder if individual growing could be enough to cover most regular users (following a cannabis social club model).

One area I know for sure cannabis startups are needed is in cannabinoid strain analysis and organic certification.

Only one dispensary in Vancouver I know of offers this as a service, and they hire a trained technician to operate a mass-spectrometer to analyze each batch as they come through for at least 9 extra specific active compounds in cannabis besides THC and CBN.

There are massive fluctuations in effect and potency even between the same strain (how are strains verified other than what the vendor claims?), and even same strain+vendor.

Another issue with industrial scale growops is that they don't 'flush' the plant properly before harvest, leaving a funky chemical taste.

Because it's pretty cheap to produce and doesn't take a ton of special knowledge, wide legalization will see a race to the bottom on price

This would be true if all strains of marijuana contained the same levels of cannabinoids, flavor, appearance, combustion rate etc. I think a big one will be balancing Cannabidiol (CBD) levels with Tetrahydrocannabinol (THC) to produce a more relaxed, less paranoid and happier strain. Given the varying affects on different humans due to different neurological makeups, there might even be a market for optimizing levels for individual humans both for medical and recreational purposes.

I don't think that matters much at all; it's really no different than developing different strains of tomatoes for size and color. Nearly every large produce grower has an R&D department that develops different types of produce for different uses with optimal yields (i.e. tomatoes used for making pizza sauce vs. heirloom tomatoes designed for straight eating).

Basically, if stoners have been doing this secretly in basement labs for the last 30 years, think of the progress an industrial-scale horticultural lab could make.

no different than developing different strains of tomatoes for size and color

I think it would be an oversimplification to compare a vegetable (OK, technically a fruit) to a drug with nearly 500 known compounds with varying effects depending on levels in the plant and physiology of the individual ingesting the compounds.

Producers currently aim for ball-park effects, appearance etc. However it would require a mix of medical testing at the individual (person) level and a map of effects with varying levels of compounds to achieve what I suggested. I'm not sure if you've ever tried a variety of strains but I can say they produce very different effects on mood and mind. It's inconsistent and there's no one kind of high. It's not like alcohol.

Ignoring the medical aspects and instead looking at the market - coffee and tea are a great example. There's the stuff that you can buy cheaply which you'll find in the kitchen of small businesses or grandma's cupboard and there's the gourmet stuff that you'll find at trendy cafes and restaurants. To condense my point - some producers will race to the bottom, others will play in the connoisseur market where good margins can be made. But there's also a tonne of work to be done in the medical realm. This is just the beginning.

"I think it would be an oversimplification to compare a vegetable (OK, technically a fruit) to a drug with nearly 500 known compounds with varying effects depending on levels in the plant and physiology of the individual ingesting the compounds."

You appear to be unfamiliar with the fanaticism and the breadth and diversity of the products of the tomato breeders. The differences in color, flavor, texture, size, hydration, phytochemical profile, and smell are very much like that of other subtle specialty plants. In fact, the first modern explosion of tomato varieties in the nineteenth century may precede the others.

You appear to be unfamiliar with the fanaticism and the breadth and diversity of the products of the tomato breeders.

Believe me I'm not. My partner's a vegetarian, which pretty much makes me a vegetarian. But I do love the taste of a good burger...

I think I'm perhaps not emphasizing the point that a plant with almost 500 psychoactive compounds that exhibits varying behaviors when ingested depending on the huge number of possible permutations in compound levels and the widely differing neurology and physiology of every individual. We're talking about the complexity of medicinal chemistry, not the flavors, shapes, shades, or textures of fleshy fruits from the nightshade family.

I'm confused. You seem to be supporting his point.

R&D departments are cheap? No special knowledge required? Race to the bottom on price? How has that worked out in the wine world?

R&D requires scale. There are relatively few jobs compared to the size of the industry.

And the vast majority of the wine industry is indeed in the $10-or-less category. Alcohol in general is a pretty well-consolidated industry, with a few global giants owning the vast, vast majority of the global brands and production.

And I never said there wasn't money in it -- there is, but it's not going to be made by VC startups. The problem is that it's a relatively easy market to get into (I.e. There are no major technical hurdles) and it's really obvious. People will make money, but its really not a hockey-stick market. The types of companies that will be successful will be ones with superior cost controls enabling them to outlast / outspend the competition on brand advertising.

I don't think anyone grows wine grapes indoors or hydroponically... Guess I could be wrong

I think you underestimate the opportunity. Just because the businesses won't be completely new (and who knows what people will come up with) doesn't mean there isn't an economic opportunity. McDonalds and Walmart aren't inventing entirely new products (though their systems are pretty impressive) but they still make billions of dollars.

Would you try to open a business to compete with Walmart or McDonalds? There's definitely profit potential in marijuana, but there's not a lot of opportunity for startups. Every piece of the marijuana market is adjacent to some other hundred billion dollar market, and the major players there will just slide over and crush the challengers with their operational / financial scale.

"Every piece of the marijuana market is adjacent to some other hundred billion dollar market"

Every?

How about the glass blowers? Where's the hundred billion dollar market they're adjacent to?

The comparison to microbreweries and wineries is a good one here, IMO. They've done alright. And so have the businesses and services that support them.

Glass blowing is a hundred-billion dollar market.

My bet is that Walmart will never sell marijuana. McDonalds, like other large companies could in 10 years when it's federally legal. What seems more likely to happen (and this is also what the SV investors and companies like Meadow[0] are betting on) is that a few of the niche players already in the business expand rapidly to fill the supply/demand vacuum as it becomes more and more legal at the state level. With it being federally illegal, it's nontrivial to build--can't plug in an easy payment processor like Stripe for instance.

[0]: https://getmeadow.com/

Craft beer is a better example, and it's booming right now.

Who is the current Walmart/McDonalds in marijuana, then?

Cannabis is the new wine. Midwest housewives are the fastest growing market.

Wine's trajectory in California doubled to $24 billion per anum over the course of 16 years.

And in the midst of all that is anything between a two buck chuck to some fancy Araujo.

Edibles/extracts/K-Cup infused/gel breathstrip infused/etc, and boutique craft beer type batches.

>People in the marijuana industry have lately taken to saying that legal marijuana is the next Internet, an untrammeled new market opportunity that is just waiting for its own big brands, the Google and Facebook of pot.

This feels like a very poor analogy. Legal marijuana is perhaps "an untrammeled new market opportunity," but I sincerely doubt it will completely revolutionize the majority of human business and recreational activity within a few decades as the internet has.

Speaking from Washington State so far, the best analogy is "microbreweries." When the product is consistent and labeled by strain, people learn quite quickly about getting the effects or taste they want. But still a boutique entertainment, ultimately.

Of course, many of the microbreweries were bought by Anheuser-Busch, so microbreweries were/are opportunities. But that's "latest trendy foodstuff" big, not "whole-internet" big.

Too bad there isn't an existing industry based on smoking dried, rolled up plant leaves that they could compare themselves to. Heck, if they realized such an industry existed, they could disrupt it.

You're right, and that's how I've always put the potential industry into perspective internally, but it would be suicide for cannabis producers to compare themselves to tobacco producers (or by attempting to "disrupt" it). The perception of cannabis is that it's "juvenile". The perception of tobacco is that it will kill you.

"an existing industry based on smoking"

Nobody wants to be compared to an industry that kills millions, ruins lives, and addicts children. Weed dealers have a reputation to protect.

Back in the 1970s somebody wrote a novel, Acapulco Gold, about roughly this situation. I suppose that it is long out of print, but it shouldn't be hard to find on Amazon.

Edit: Actually, I think it was about Big Tobacco disrupting the cannabis business, not vice-versa.

It seems incredibly likely that Big Tobacco will eventually dominate the cannabis business. The current protection is that the legal environment is still to fraught for corporations of that stature to take the risk.

I wish we could declare HN a hyperbole free zone.

I wish we could declare San Francisco a hyperbole-free zone.

I would try and help, but I'm too busy changing the world.

It can't possibly because plants don't scale like information does. They don't move as quickly and they don't make use of meta-information like data does.

I'm sure there's a good deal of money to be made, but it's not like we're going to have family marijuana plans or access to full-speed marijuana all-day long at your desk at work as we do with information services.

What may derail this is the proposal to move marijuana from Schedule I to Schedule II.[1] That makes marijuana a prescribable drug. This makes it insurance-reimbursable, but distribution is through the usual chain for addictive prescription drugs, with non-renewable prescriptions for specific quantities and reporting to the DEA. This would make it more available for medical purposes, but less available for recreational purposes.

[1] http://www.thedailychronic.net/2015/49457/hillary-clinton-en...

Moving to Schedule 2 is a policy that may have made sense twenty years ago. We're well past that at this point - MJ is legal in several states and the sky isn't falling.

Right, quite the opposite. In those states, drug arrests are down, prison population is dropping, tax dollars are being collected. It's looking like the right kind of policy from just about every perspective.

>drug arrests are down

Serious question, because this point gets brought up often in this discussion: Did people expect drug arrests to go up or even stay the same? If you remove the ability of police to arrest someone for something, don't arrests then naturally go down?

One of the main recurring arguments against legalizing marijuana is that it is a "gateway drug": people who try it are more likely to go on to harder drugs like opium or cocaine. This means that some people legitimately believe that legalizing it would get more people into these other drugs and increase the overall number of drug crimes.

It doesn't really make sense to me, but it seems to be one of the most common rationalizations for being against legalization.

>This means that some people legitimately believe that legalizing it would get more people into these other drugs and increase the overall number of drug crimes.

Okay, but according to the ACLU 52% of drug arrests are for marijuana. I know we've already exited the realm of logic with the gateway drug theory but to believe that legalizing marijuana would result in an instant increase in drug arrests -- that is, enough to overtake the majority of drug arrests in a single category, seems patently absurd.

[0]https://www.aclu.org/gallery/marijuana-arrests-numbers

Yes, that idea is silly and that's why none of us have seen anyone making such a polemic argument. I think you know the answer, people vote with emotion, not with facts.

Shouldn't we really be looking at the growth in usage of other drugs in that case?

The argument was more about criminal behavior than arrests. People on the Reefer Madness end of the political spectrum seem to think that pot will make people crazy like PCP, or do-anything-for-a-fix addicts like crack, heroin or meth.

It's the same kind of people who argue against transgender rights because "men will be allowed in the ladies room!"

The "Gateway Drug" argument is often used against cannabis. Some warned against cannabis legalization, saying that it'd increase cocaine and heroin use.

Heroin seems to be doing fine all on its own, thank you very much.

I know that HN often doesn't care for wordplay, but the inverse of this headline is both funny and true - "Cannabis tries to Alter the Perception of Silicon Valley".

The author really screwed up by not going with this title.

Anyone who thinks a plant has agency, and can "try" anything, has been smoking something.

Oh come on, it's used to indicate intention of non-sentient objects all the time. "The electron tries to fall into the lowest energy state."

Is getting medical marijuana really as easy as a quick video chat with symptoms of frequent heartburn? Prohibiting it seems especially ridiculous if that is the case.

Dude, not even. When I worked in the Valley I went to the THC doctor's office with a whole backstory about how I work for a big tech company and I drank to handle the stress etc.

When I got there I was given a medical form to fill out. The third page actually asked why I wanted medical marijuana. I simply wrote "anxiety" and figured I'd explain it later. Then I got the call that the doctor was ready to see me. I gave him the form, he flipped straight to the third page, then said:

"Hmm...anxiety...when you go to the dispensary, you're going to want to ask for Indica."

Well? Did it help? :)

Marijuana is an interesting drug. On one hand, it is like a stress reset button (along with a good night's sleep), but on the other, it's impossible to OD or feel sick on it, so, unlike alcohol, you can binge or have it all the time and feel few adverse side effects.

Thing is, studies have shown that too much use can dampen the brain's ability to absorb (not produce!) dopamine, making everyday successes feel less significant.

So yes, it did help, but it comes with caveats. Just because you can blaze all day erryday doesn't mean you should.

> it's impossible to (..) feel sick on it

https://en.wikipedia.org/wiki/Whitey_%28drugs%29

How much it too much would depend on your body and tolerance, but I've seen plenty of people feel sick from smoking too much.

I've definitely been sick from smoking too much, but it's always been a mix with alcohol included.

Can't say I've ever felt sick from smoking too much, except for a time when the munchies took over and I ended up ordering delivery from two restaurants in one night.

Could be that you've never smoked enough to get there, could be you're just lucky. Certainly it's a lot harder to feel shit after smoking than drinking.

>Could be that you've never smoked enough to get there

Believe me, I've tried.

I've never smoked enough to get there, though I know people who have, but I have eaten enough to get there. Edibles are easy to mis-judge, especially because they take a while to kick in.

You do get dehydrated though, and as a result feel sick.

in my younger days i used to see people get so stoned they threw up.

it's definitely possible, but you're not going to get to that level smoking the odd bowl or two, or joint. this is almost exclusively caused by overcommitting to bonghits above your paygrade.

> Thing is, studies have shown that too much use can dampen the brain's ability to absorb (not produce!) dopamine, making everyday successes feel less significant.

isn't that basically what "anti-depressants" do?

No, most antidepressants prevent the reuptake of serotonin (thereby increasing the degree of serotonin signalling).

A good friend of mine in Seattle had a night of very nasty dissociative hallucinations after eating what was labeled as a normal dose of a professionally-manufactured edible. Weed is mostly safe most of the time, but you need to be careful with edibles, especially when you're first getting started and don't know where your tolerance is.

For me, it doesn't. Or more precisely, it helps with anxiety, but at the same time I'm not able to do anything productive, so it's not a therapeutic option.

On the other hand, benzodiazepines (such as Xanax) have helped me a lot occasionally. For instance, I couldn't work properly a few days before a stressful event because I was too anxious (typically, before giving a talk).

I'm convinced that therapeutic cannabis is for the most part an excuse for legalization and there are better alternatives drugs with less side effects for most of the conditions it is advertised for.

I recommend looking into a licensed therapist whose practice is evidence based. I found one who uses Acceptance and Commitment Therapy (ACT) and it has honestly changed my life.

Thanks for the recommandation. But it's not really a problem anymore.

Getting a medical card for me involved meeting with an LPN for about 10 minutes. She took my blood pressure, asked what I wanted it for (I said "anxiety") and said ok. A couple weeks later the card came in the mail.

Prior to recreational legalization in Washington, it was extremely easy to get it medically; there were a plethora of doctors that specialized in offering prescriptions with the barest pretense of actual need. After the law passed allowing it to be grown, sold and used recreationally then it actually became more difficult to acquire a prescription for it, requiring proof of one of a set of conditions from a "real" physician.

This is roughly accurate with the few people I know that have gotten cards. But theirs were in person rather than video chat, but may as well have been.

https://www.youtube.com/watch?v=CRm1yqSmsGY Weed Card by Garfunkel and Oates (Official Video)

Riki "Garfunkel" Lindhome and Kate "Oates" Micucci sing about the perils of obtaining medical marijuana in California.

Apparently, the biggest holdup in Colorado is the backlog required to get the state to issue the actual card. But, since recreational use has also been legalized, you can still get cannabis, you're just paying higher taxes on it without the MMJ card.

Something to consider is the effect growing will have on the power grid. In Portland there have been some blackouts caused by grow houses:

http://www.oregonlive.com/marijuana/index.ssf/2015/11/mariju...

Yeah but four plants (the personal allowed number) can be grown on a few hundred watts. Nothing that's going to do anything to the power grid. And, brewing beer is legal but not every house does it. In fact, relatively few of them.

"Seven is not a lot," said Tom Gauntt, spokesman for the utility.

Our power grid is rickety and flakey, it needs some serious upgrades. 20,000W of grow lights is what, 40 modern desktops with 500W power supplies? The problem you're mentioning is more about fault tolerance and missing fail-over modes.

And growing in residential spaces that were never wired for that much power draw, instead of commercial/industrial areas.

I'd be surprised. Just because it's legal doesn't make it exempt from zoning laws, and surely if you're moving into it because of legalization you'd want to stay legal with the rest of your business.

And on the commercial real estate market. In central Denver, 1 out of every 11 industrial buildings is now being used for growing marijuana. It's gotten to the point that the owner of Mile High Comics is selling its headquarters building, looking to make a tidy profit in the process:

http://www.thedenverchannel.com/news/front-range/denver/mile...

Prohibition will slowly ebb until it reaches a tipping point, just like it did with alcohol. We've already seen that the deleterious effects of cannabis are minimal. Heck, if I weren't one of the unlucky few on whom it has no effect, I'd probably use it too.

Can you expand on why it doesn't have effect on you?

Not the original commenter, but typically nobody feels anything their first time smoking. Sometimes, people don't even feel it a couple times after that. I'm not sure what the biological reason for that is, but it's been that way for nearly every person that I've talked to.

I've never heard of anyone not being affected by it after a couple times of smoking or eating infused foods.

it's bullshit. if you gave him an edible he'd be higher than a kite, just like every other person on earth.

A lot of people with no smoking experience don't get enough in the lungs the first few times. Actual unresponsiveness to THC is very rare if it exists at all.

Cannabis should be treated the same as tobacco.

The funny thing about stoner stereotypes is how much lazy thinking is involved. And so people who like cannabis but don't fit the stereotype just shut up about it. I guess it's time to do away with the stereotypes, now that there is money to be made! Funny how that works too.

There are over 400,000 emergency room visits per year from marijuana. THC has biphasic activity. At low doses it can create the desired effects but at higher doses it has the opposite effects. These effects include irritability and even psychosis.

[1]New England Journal of Medicine (2014): Adverse Health Effects of Marijuana Use: http://dfaf.org/assets/docs/Adverse%20health%20effects.pdf

[2] http://www.menshealth.com/medical-marijuana/

Ha. I beg to disagree -- that number is gamed. See #6:

http://norml.org/library/item/your-government-is-lying-to-yo...

>There are over 400,000 emergency room visits per year from marijuana.

"In 2010, there were approximately 12.1 million diabetes-related ED visits for adults aged 18 years or older"

https://www.hcup-us.ahrq.gov/reports/statbriefs/sb167.jsp

Should we outlaws sugar and high fructose corn syrup ?

Anyway, looking at the full statistics on drug abuse emergency rooms visits it doesn't look like total [hypothetically successful] prohibition of marijuana would have any effect as OTC, other drugs and alcohol would obviously fill the void:

http://www.drugabuse.gov/publications/drugfacts/drug-related...

"Highlights from the 2009 Drug Abuse Warning Network

In 2009, there were nearly 4.6 million drug-related ED visits nationwide. These visits included reports of drug abuse, adverse reactions to drugs, or other drug-related consequences. Almost 50 percent were attributed to adverse reactions to pharmaceuticals taken as prescribed, and 45 percent involved drug abuse. DAWN estimates that of the 2.1 million drug abuse visits—

    27.1 percent involved nonmedical use of pharmaceuticals (i.e., prescription or OTC medications, dietary supplements)
 
   21.2 percent involved illicit drugs

    14.3 percent involved alcohol, in combination with other drugs

If you take the time to read the articles from NEJM, PNAS, and so on that have been cited, then you'll see the dangers of marijuana use. Please don't be critical until you've read the medical studies.

ER doc here.

I have seen people in the ED with marijuana-related complaints. I can count the total number on my hands. Every single one of those patients has been absolutely fine. Am I aware of patients with marijuana-related complaints who weren't fine? Sure, a few case reports. But overall, the "dangers" of marijuana do not exist in a real sense, compared to the dangers of every other recreationally-used/abused substance out there, or compared to prescription medications, both psychotropic and not. Not even close.

> Should we outlaws sugar and high fructose corn syrup ?

Did you just compare diabetes (which is a real illness) to marijuana induced problems? One is not your fault. The other is.

> other drugs and alcohol would obviously fill the void:

RIGHT! The bttr reason to legalize another drug because illegal drugs would fill the void.

> alcohol

Nobody thinks alcohol is not a serious problem in this country. And you mister high flying pot smoking moron would like to introduce another problem. Way to go!

Unfortunately many articles are behind paywalls. Here are some that are free to read. PNAS is a very high quality journal.

Proceedings of the National Academy of Sciences (PNAS):

Long-term effects of adolescent-onset and persistent use of cannabis http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3479595/

Persistent cannabis users show neuropsychological decline from childhood to midlife http://www.ncbi.nlm.nih.gov/pubmed/22927402

Personality may explain the association between cannabis use and neuropsychological impairment http://www.ncbi.nlm.nih.gov/pubmed/23460701

man, arguing against the cannabis on the basis that it is bad for children/teenagers ... We don't even let them drive cars - should we argue against cars on that basis?

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