How Silicon Valley entrepreneurs are rushing to cash in on cannabis | Hacker News Reader

How Silicon Valley entrepreneurs are rushing to cash in on cannabis

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107 pointsds973 comments

I thought this piece on Vox was pretty clear-eyed about the economic impact of legalized marijuana; it's skeptical about the value of the pot startup market (its author is a legalization advocate, as am I).

http://www.vox.com/2014/4/16/5620322/how-legalized-pot-would...

If we are going to legalize pot, I would prefer that it be legal to send via post.

I'd support a method where any individual address could subscribe to a certain amount of pot delivered via mail per month.

I can already do this with a wine club... Why not a pot club.

> I can already do this with a wine club... Why not a pot club.

I'd be happy to have the wine club. It's illegal to ship alcohol to more than half the US states, including mine. Can't buy it at the grocery store either.

> Can't buy it at the grocery store either.

In Pennsylvania, some grocery stores get around this ban (which includes liquor and wine anywhere other than state stores, and beer in stores that are not exclusively beer distributors) by creating a small building within their store that operates somewhat separately as a "cafe" or restaurant, which are allowed to sell alcohol (since they also serve food).

For example, the "Whole Foods Market Devon-Mile Post Pub" (http://www.beermenus.com/places/2550-whole-foods-market-devo...) is basically a garden shed with a walkin refrigerator that is inside of the Whole Foods. While it can sell beer, the enclosing Whole Foods cannot.

Really a ridiculous system. If pot legalization progresses as alcohol legalization did/continues to, then we have a long road ahead of us.

Ironically, Colorado has alcohol laws that are even more bizarre than that. Until 2008, it was illegal to sell alcohol on Sundays. To this day, no corporate entity may own more than a single liquor store, and no grocery stores may sell anything other than 3.2% beer.

So, Whole Foods, Costco, and, more recently, Trader Joe's, each have a single location in Colorado that has an attached (but separate) liquor store. The other locations are not allowed to sell anything but 3.2% beer.

That is pretty bizarre--though I don't know if I'm ready to concede that it's more bizarre than Pennsylvania. Until recently you couldn't buy liquor or wine (but beer was okay, for some reason) on Sundays in Pennslvania unless you were being served in a restaurant. For a real spectacle of oddity you need to see the bottle shop dance[1] that I describe in another comment.

I don't think I've ever seen a beer with an ABV above 1% and below 4%. What kinds/brands of beer are these?

[1]https://news.ycombinator.com/item?id=7613369

Bud light and other light beers tend to land in 3.2% territory, I think. And some brands specifically make 3.2 beer catering to the PA market (it may not even be available in your area if your state doesn't have weird restrictions around 3.2%, like PA or UT).

Light beers are usually higher than 4%. Bud Light is 4.2%

[1] http://www.beeradvocate.com/beer/profile/29/1320/

EDIT: Ah, here's the confusion. I'm pretty sure the 3.2% is ABW instead of the usual ABV. http://en.wikipedia.org/wiki/Low-alcohol_beer#Categories

You're right, I looked up Bud Light and it was 4.2 and I was confused :/.

Not sure on if 3.2 and ABW applies in all 3.2 states. My only knowledge of this comes from my ~75 year old uncle, who told me that you used to be able to buy 3.2 beer when you were 18 (depending on the state; he was probably in CA or WA).

I don't drink anymore, but when I did, it was all craft / microbrews, which are typically 5-7% ABV ;). The lowest I've seen is 4.7% (Founder's All Day IPA, a session IPA). And some of the DIPAs and Imperial stouts and wild ales / Belgian trippels/quads go to 8-12% ABV.

Ridiculous? Pshaw! Obviously we'll just have a pot shack inside of the booze shack inside of the Whole Foods.

All kidding aside I find the PA alcohol laws just ridiculous.

If I'm planning a party and want a few bottles of wine, a quarter keg of something simple, and a few six packs of something more interesting I have to go to three different stores--and at the last store I can only buy 192 ounces per purchase[1].

All of this insanity because of historical inertia and conclusions drawn from correlation confused for causation. How shocking that the Delaware Total Wine[2] parking lots are regularly packed with PA license plates.

[1] For those who haven't encountered this it's quite a sight. If I go to a bottle shop to buy two 12 packs I have to buy one 12 pack, walk it outside the door to the store, put it down, come back in, and buy the second 12 pack. However, if I go to a distributor I cannot buy a single 12 pack but I can buy 100 cases (24 packs) as easily 1 case.

[2] Total Wine sells beer, liquor, wine, and related supplies in a store the size of a supermarket.

Pretty wild to think we are really still recovering from prohibition isn't it?

Many countries in North Europe share the same "ridiculous" limitations. For example, in Finland only state-owner Alko can sell liquor and it doesn't work on sundays.

(And they didn't have prohibition so it's not prohibition legacy)

The reason for this is limiting alchohol impact on citizenry without limiting citizens' rights. Alchohol in colder/continental climates is a scary thing enough for general public to support this arrangement.

Finland had prohibition from 1919 to 1932, when the state alcohol monopoly was created after a referendum, according to the internets, anyways.

In Canada this is a very common way to receive pot for medical marijuana patients. They get mailed quantities on a subscription-like basis.

Canada is in the process of privatizing the distribution of medical marijuana (independent growers) so this method of delivery will certainly increase. Local distribution is too expensive for most small legal growers.

Startups seem more consumers than potential producers. Further it smells like a market about to bud and quickly become a brutal commodity like coffee or tea.

It would be cool to see cannabis traded in the futures markets though.

So long as there is the ambiguity of the law at the federal level where people who might be following state laws to the T run the risk of getting put in prison for years there will probably still be money to be made.

"about to bud"

I see what you did there

you forgot "smells", which made me chuckle.

Paul Graham talks about people who "live in the future" -- in a specific area of their lives, they see clearly that some change is coming long before everyone else catches on. It seems the trend towards legalization of marijuana is one such area -- it probably is one of the next gold rushes. (In my opinion, 2 other such areas are virtual reality and the Rust programming language).

Many cannabis dispensaries and growers have been successful small business for a long time now in states where it's legal. In fact dispensaries in California lobbied against full legalization in an effort to protect the existing economics. I guess they are making lots of money already and fear consolidation and industrial grow ops will change the business and hurt their margins.

VR has a long way to go imo. Having used the first gen occulus, though interesting, it feels gimmicky and very much reminds me of 3D glasses(in terms of hype vs how cool the tech is in practice). Few people will willingly strap a vision obscuring black box to their face for more than a few minutes at a time to try it out. Probably worse than that, even if it was fun to play games with, it probably wouldn't catch on mainstream for a long time because the dork factor is incredibly high. It's like google glass on steroids.

Rust is not that different from existing languages.

I appear to be disagreeable today, apologies.

Lol, I appreciate well-thought out disagreement. You may be right about VR ... possibly it's too early. But it's day will come, undeniably. I also think full legalization of marijuana is undeniable, even if there are some roadblocks.

Rust, as far as I know, is the only language trying to pursue compile-time memory safety while still giving the developer control over memory allocation and cleanup. That's absolutely a game-changer, and no other language (that I know of) is even trying to tackle it.

There's a lot I don't love about Rust, but that one feature trumps everything. There are sexy languages I get excited about (Nimrod, Lisp, Haskell), but the feature the world needs most is memory-safety with low-level control.

I think once that feature is delivered with a full release, the world will flip from "ho hum" to "holy crap, we have to have this."

  > There's a lot I don't love about Rust

We'd love to get your feedback on the parts of Rust that you don't love, either here or on the mailing list!

https://mail.mozilla.org/listinfo/rust-dev

Does that mean that Rust would be a good candidate for writing security/crypto libraries in?

In theory, yes.

>Many cannabis dispensaries and growers have been successful small business for a long time now in states where it's legal. In fact dispensaries in California lobbied against full legalization in an effort to protect the existing economics. I guess they are making lots of money already and fear consolidation and industrial grow ops will change the business and hurt their margins.

That makes sense (even though it's disgraceful). Once cannabis is fully legalized small companies will have absolutely nothing to do with it, at least not in any major way.

The same way that small roasters and microbrewries have nothing to do with coffee or beer.

Okay, I wasn't precise enough. There will be small cannabis manufacturers just like microbreweries, but they're portion of the total market will be negliglible.

How does the Rust programming language translate into a 'gold rush?'

It seems that they're saying that marijuana legalization is like a gold rush, not that Rust is --- i.e. marijuana legalization, Rust, and VR, are all manifestations of Living In The Future, and additionally, marijuana legalization is a gold-rush situation.

No no no. There is nothing visionary about seeing pot is going to be big. Right now its a lot of small players that will have vicious,vicious competition. Are you going to be the one to win?

Rust will never be a 'gold rush'. The human brain will always be the limiting factor no matter how good a language is. The true gold rush will be when computers have strong A.I. and create everything for us, from concept to implementation.

Yet another cannabis article that completely ignores Seattle. Where's the reporting about Winterlife?

Winterlife is taking the opportunity to cash in for the next few months until full retail shops open. What is essentially illegal weed dealing in plain site, relying on the lack of enforcement to stay in business. Unlicensed, not adhering to the rules of i502, akin to me advertising and delivering beer I brewed in my garage. Ballsy for sure, not anything revolutionary.

Every time I meet one of their couriers in broad daylight, and they hand me a receipt, I feel like I'm just grazing a tiny part of history. It's not Rosa Parks level. It's a smaller matter, but it's still an important change for Western society, which legitimizes very, very few kinds of states of consciousness, and strongly favors the one that makes you most productive in a job.

For minorities it's not a small matter. i502 is about so much more than getting high, it's about eliminating a policy which was so often enforced at the discretion of the officer and prosecutor, which opened the door for all kinds of discrimination.

the war on drugs is one of the most damaging policies for society, and i502 is a substantial step in the right direction.

While you can legally buy from Winterlife, Winterlife cannot legally sell to you. They aren't operating in a technically legal gray area, rather they are technically illegal but in practice gray (with local authorities acknowledging that they are within the spirit of legalization and not pursuing them for illegally selling.)

Tranzbyte's new Zazzz marijuana vending machine looks pretty sweet though! I think it has the potential for countless uses, far beyond the cannabis industry.

http://www.usatoday.com/story/tech/2014/04/14/pot-vending-ma...

Have seen this for wine, and also required a breathalyzer. Cool tech but they eventually were removed and never saw it being used regularly.

Regulation stifling innovation. Sad.

I've started a pot delivery system where you can select your delivery location via a smart-phone app; Doober. Like Uber - but for Pot - PM for details!

I've spoken with people who work for the state of Oregon.... state employees who are working on the software infrastructure for recreational marijuana dealers. Licensing, taxing, etc. It's basically a scaled up version of the current system of medical growers/distributors but tailored for recreational use.

That's how confident they are legalization is coming in the next few years.

I thought it was legal in those states? Also, it's a bit of a virtuous cycle: legalization is coming because many people think it is coming.

"Defying projections, crime has dropped since the law went into effect January 1, and the flow of new tax revenue, more than $2 million a month, is on par with the state’s haul from alcohol taxes. Is this what the pot-friendly future of America looks like?"

It sounds like all rainbows and unicorns right? Well, not exactly. . .

"Marijuana is by far the No. 1 cause of student expulsions from Colorado public schools" - http://www.thedenverchannel.com/news/local-news/more-younger...

"Colo. kids getting into parents' pot-laced goodies" - http://www.usatoday.com/story/news/nation/2014/04/02/marijua...

"Colorado News: Pot problems in Colorado schools increase with legalization" - http://www.summitdaily.com/news/marijuana/8877953-113/mariju...

"Harmless pot? New marijuana study shows brain damage in those 18-25" - http://www.deseretnews.com/article/865601141/Harmless-pot-Ne...

Yeah the tax benefits are great for the state, but there's going to be a lot of unintended consequences. Not sure I'd want my kids getting exposed to this at a young age.

EDIT: I guess I shouldn't be surprised. Downvotes for a one article and nobody presenting any fear of their kids being involved with pot at an early age.

I will simply leave with you a family friends comment to me who's been a drug counsellor for 25 years, "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana."

"Harmless pot? New marijuana study shows brain damage in those 18-25"

Although this could certainly be the case, I do have an issue with the article. The conclusion of the research seems to be this quote:

"Breiter and his colleagues found that among all 20 casual marijuana smokers in their study — even the seven who smoked just one joint per week — the nucleus accumbens and amygdala showed changes in density, volume, and shape. The scientists also discovered that the more pot the young people smoked, the greater the abnormalities."

It is never actually stated that these changes in density, volume, and shape cause brain damage. Seems to be a bit of a sensationalist headline in my mind.

> "Harmless pot? New marijuana study shows brain damage in those 18-25"

I downvoted you for endorsing this stain on the reputation of science journalism. Tiny sample size, writer exaggerates findings to craft a clickbait article title, it's awful. We deserve something better than tabloid reporting in our science articles.

That's pretty unfair of you. Link-baity titles are par for the course for internet news sites. And the reported study is legit even if you don't like its findings.

I have no problem with the study [1]. However, I encourage you to search the study for any reference to 'brain damage.' I also encourge you to consider whether the mean frequency of cannabis use, 11.2 joints per week, really qualifies as 'casual' use.

[1] http://jn.sfn.org/press/April-16-2014-Issue/zns01614005529.p...

Are you implying that the study does not report findings of brain damage? Then you are wrong. Scientific texts tends to be as specific as possible which is why they write "deformations in brain part X, Y, Z" instead of the more general term "brain damage."

You know what else causes 'brain damage,' according to this logic? Becoming a London cab driver[1] or a musician [2]. You know what actually causes brain lesions? Alcohol.[3]

[1] http://www.wired.com/2011/12/london-taxi-driver-memory/ [2] http://www.cnn.com/2012/05/26/health/mental-health/music-bra... [3] http://en.wikipedia.org/wiki/Long-term_impact_of_alcohol_on_...

I also disagreed with the parent comment, but meta point: I'm not sure down voting is fair in this situation. Parent seems genuine and earnest in their comment. It seems like it'd be enough to simply reply with the counter point...

I think it is. Posting sources that are trivially debunked subtracts, rather than adds to the discussion.

I haven't seen an etiquette guide for HN anywhere, but if we can't downvote the promotion of bad science journalism, what can we downvote?

It isn't promotion of bad science journalism. It's a crap story, but there are 3 other links in there too. I'm strongly pro-legalization and think the concerns are overblowon, but a lot of people are using the 'bad science' complaint to silence a point of view they dislike.

It's true, I do find the old 'think of the children' appeal to emotion, and the trotting out of the 'gateway drug' myth to be distasteful. However, I'm not silencing anyone's point of view--I don't have admin rights on HN, just the ability to rate comments.

Its reasonable journalism. Certainly nothing worse then Legalize It! stuff I have seen that claim cannabis will cure all.

Hateful, bigoted posts, of course.

The poster is attempting to incite our fear for the children as a reason to fear the legalization of marijuana. He neglects to mention that Colorado has a 21+ policy, just like alcohol. He's ultimately arguing for a nanny state since he feels he is incapable of raising his children without them consuming the drug.

In short, he's sensationalizing, and that's not doing anyone any good.

> Not sure I'd want my kids getting exposed to this at a young age.

Is that a problem for legalization or parenting?

I think it's a problem of adjusting to something new.

Looking at alcohol for comparison, societies have evolved cultural norms for dealing with it. In W. Europe for example, wine is part of meals; in UK a pint at the pub is a routine social occasion. In the US, with the heritage of puritans, "reformers" and a younger culture, there is more of an "all or nothing" mentality, the prohibition experiment, and youth drinking to get drunk.

As cannabis legalization spreads, norms will develop to govern what's acceptable in households, coffeeshops, etc.

> in UK a pint at the pub is a routine social occasion.

This minimizes both the alcohol consumption and alcohol consumption to excess in the UK.

For instance, Britain ranks 17th in the world in terms of total alcohol consumption - just below Russia. [1]

More importantly, binge drinking rates in Britain and Ireland are the highest in Europe :

> "A Europe-wide study found that although the British are not the EU's most regular drinkers – only consuming alcohol an average of four times a week – they drink the most at one sitting." [2]

When combined, this data paints a slightly different picture than a nation of tempered well-acquainted drinkers who just hang out with a pint or two.

[1] http://en.wikipedia.org/wiki/List_of_countries_by_alcohol_co...

[2] http://www.telegraph.co.uk/health/healthnews/7616405/Britain...

Britain is not the only euro nation with youth acess to alcohol, so something else is going on.

I think it's a problem of adjusting to something new.

This sounds like "parenting," to me. You don't want your kids getting acclimated to something that is outside of your experience. Natural in some ways, but in this case I think it's overblown.

It's both, of course. Legalization means easier availability, even for something as relatively ubiquitous as marijuana.

That may be true, but I'm not convinced it is. There's some evidence to the contrary [0]. The explanation I've heard is, if what you're selling is always illegal, you won't discriminate much about whom you sell to since you'll get in trouble if you're caught no matter what. On the other hand, if you can make a bunch of money legally selling something to adults, you won't be as eager to take extra risk just to get a few more sales.

[0] - http://www.cbsnews.com/news/teens-pot-easier-to-buy-than-bee...

That's a valid data point. Without moving the goal posts, I'd like to re-phrase the logic :

The crux of this argument is that the supply chain for illicit marijuana will be disrupted by legalization. In other words, legalizing will cause current (illegal) suppliers to go out of business and/or stop doing business with street / kid / high school dealers - thus reducing availability for underage kids.

My issue with this logic is that I can't see why the demand for a product (marijuana) won't continue to drive supply once it's legalized. There will always be a way for a local high school dealer to find weed. Supply chains could easily re-route to accommodate demand in high schools.

What I do find to be a compelling argument, however, is the notion that demand could decrease post-legalization. This seems rational to me.

The alcohol comparison feels awkward, primarily due to the difficulty in trafficking in alcohol at the small scale. It's bulkier and decidedly more awkward to manage. Therefore, it's not exactly apples to apples.

At one point, I also considered the fact that legalizing could decrease profit margins. However, low level dealers really don't have much of a profit margin to begin with.

However, you have solid data and I'm primarily speculating :)

I agree there could be other explanations for the difference in accessibility of those drugs. I hadn't considered the the idea that weed/cigarettes are less bulky and easier to hide.

Overall I think the effect of legalization on accessibility to teens isn't clear, and I'd avoid making a definite statement either way.

I agree, when I was younger, it was much easier for me to buy cannabis than alcohol. Alcohol required knowing someone older than 21, cannabis required knowing a dealer, which was much easier.

A lot of the consequences you're referring to seem to be issues related to parenting and a lack of education (both for parents and their kids). A large majority of this ignorance exists because of its criminalized history and the blatant propaganda that's a result of the War on Drugs.

Maybe they shouldn't resort to expulsion for something kids have been doing for half a century anyway.

I'm not saying they should allow it blindly, but I feel like getting kicked out of school is gonna do more damage than the weed.

Under-tolerance is an ages-old issue for principal administrators. Kids often get kicked out of educational institutions for wearing or generating imagery of banned items.

> "In my 25 years of practice, all of my patients who came to me seeking help with their addictions, they all had one thing in common - they all started with marijuana."

This might well be true though I doubt it. I strongly suspect almost all of them started with alcohol.

Be that as it may, that's really not the probability we're interested in. It's not "percentage of addicts who tried Cannabis" but "percentage of Cannabis users who go on to become addicts". Given the wide usage, the first number is meaningless, the second likely very low.

Your friend's quote might as well be: "they had one thing in common: they all had a driver's license".

Even with pot being illegal a lot of my friends started smoking in their early teens. You can't solve that with regulation (and I'm not a hacker libertarian, I think some issues should be addressed with regulation).

> Not sure I'd want my kids getting exposed to this at a young age.

I don't have time to dig up a study on this, but pretty sure it was done - % of teenagers who tried pot in Amsterdam is much lower than in the States or other places in Western Europe, due to lack of "coolness" factor.

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