jericsinger

I promise you, everyone is trying their best. But the food and ingredient supply chain is extremely complex and doesn't lend itself to strict structure. Tracking an ingredient through multiple vendors in multiple countries while it changes form from raw material to component ingredient to sub-product to product requires a massive effort, care, and judgment. And it's definitely a chain that's only as good as its weakest link, so one small mistake early in the chain can void all subsequent efforts, no matter how diligent. My point is, it's really hard to do well, and nigh impossible to do perfectly.

Not quite. What would happen is that people would get rung up on drug trafficking charges and then the IRS would pile on by taxing the undeclared illegal income. In the late 70s/early 80s, a case[1] made its way through the tax courts wherein a petitioner, a convicted drug dealer facing a jeopardy assessment from the IRS, filed a tax return for the prior year in which he declared income calculated net of COGS and other misc business expenses. The IRS disallowed these deductions, which if upheld meant that the petitioner would owe tax on his entire gross income. The petitioner sued and won, which established a precedent that didn't quite gibe with the political climate of the day. In response, the Senate Finance Committee promulgated a code amendment generally referred to as 280E[2], which prohibits those engaged in illegal activities from deducting ordinary and reasonable business expenses when reporting their net income to the IRS. Only COGS can be deducted, which for dispensaries and other non-manufacturing license holders, can result in an effective tax rate of 70% or more. In fact, it's quite easy to lose money and still owe taxes in the industry if you let G&A run away from you.

[1] https://scholar.google.com/scholar_case?case=702348433062253... [2] https://newrevenue.org/2013/03/13/marijuana-tax-code-section...

This is not true. It's possible, perhaps probable, that Phillip-Morris employees have invested personally in the industry, but all retail states so far have strict domesticity requirements that no national corporation could satisfy. Colorado's even contemplating a law that forbids publicly traded companies from owning stakes in a licensed entity. But even if this weren't the case, it would make zero business sense for a heavily regulated, multi-billion dollar corporation to invest resources in marijuana right now. The revenue opportunity wouldn't register on their income statement, and would never come close to justifying the additional scrutiny they'd surely receive from regulators. The reasonable strategy for them is to wait until marijuana receives federal blessing and then acquire the best companies or teams available, or try to launch new products backed by massive marketing spend.

You're correct. And the ordering guidelines are...extensive. https://www.drugabuse.gov/ordering-guidelines-marijuana-mari...

It's utterly pharmaceutical. The consumer market thinks of marijuana in terms of whole strains. The federal government, or more precisely, the National Institute on Drug Abuse (NIDA), which directs UM's program, thinks of marijuana in terms of constituent cannabinoids, with a special focus on THC and CBD. Their marijuana product is distributed in a homogenized form that's mixed to spec, so if you were to place an order from their menu[1], you'd ask for X marijuana cigarettes with "Medium THC / Low CBD." Of course, what NIDA considers high THC (5-10% by weight) doesn't compare all that well with today's products in the legal markets. In Colorado, 16-20% THC plant material is pretty common.

[1] https://www.drugabuse.gov/researchers/research-resources/nid...

Organized crime is pretty well purged from Colorado (and likely Oregon and Washington as well). Prior to retail taking effect, the DEA and Colorado law enforcement flushed out anyone with even a remote relationship with, call it, persons of interest. Since then, all participants have been subjected to background checks, where the thoroughness ranges from cursory (for, say, an hourly employee) to proctological (for a license owner). There are currently strict domesticity requirements for all "owners" (broadly defined by the state enforcement agency as anyone with "control"), i.e., at least two years of residency in the state of Colorado. Then of course there is the standard clean background check. New laws under consideration would open the market to out-of-state investors as of Jan 1 2017, but those laws are awaiting the governor's signature.

This is called traceability, and it's a fundamental aspect of food quality and good manufacturing practice (GMP) throughout the food industry. The devil is in the documenting.

There are a few things worth noting when talking about Balmer and MSFT's share price. Since 2004, MSFT has returned over $164 billion [1] to shareholders in a ~50/50 split of buybacks and dividends -- on today's balance sheet, that cash would be worth an incremental ~$20/share (assuming $0 reinvested). Meanwhile, revenue and free cash flow have grown at a respectable 12.4% compounded, and it wasn't until 2012 that Apple passed Microsoft in terms of gross profit.

I don't think anyone would argue that Ballmer's been the most innovative CEO of his era, but as a custodian of shareholder value, it's pretty hard to fault him. Could he have done better? In hindsight, we know the answer is yes, but the answer in hindsight is always yes. He managed to try and fail at big ideas without bankrupting -- or even significantly impairing -- his company. Not many CEOs can claim the same.

What happened to Microsoft? It built and sold unsexy products that people were willing to pay gobs of money for. I'm sure many businesses would love to fail so successfully.

[1] http://www.gurufocus.com/financials/MSFT#cs. For the sake of reference, AAPL returned ~$26 billion to shareholders over the same period.

Network-based business models have always tended toward monopoly (AT&T, ConEd, and Western Union, to name a few early US examples). The internet doesn't change this dynamic at all; rather, by providing the first (more or less) open network in history, it simply removed what used to be the greatest impediment to a networked business: the construction of the transmission network.

The internet hasn't "changed" economics, it's just enabled a specific type of business model.

If you read through, this actually has a super interesting purpose. From the site:

>Why are we doing this?

Our research group is interested in the use of technology for development. We are building a low-cost, low-power cell phone base station platform for deployment in underserved areas. Once you set up your own cell phone tower, you can do a lot of cool things, like run a chatroulette service.

In this particular project, we are studying how choice and context affect the quality of online interactions. We will be deploying this service in a small isolated cell phone network at an upcoming event where we expect to have several thousand users. We're hoping the Internet can help us test how our system performs under load before the real deployment so we can work out all the bugs.

Actually, there's a much better writeup in the Chicago Tribune: http://www.chicagotribune.com/business/ct-biz-1222-orbitz-aa...

Well put. It's embarrassing, but it's the sort of thing that is bound to happen when you scale so fast so leanly. I'm sure they'll come out of this with a number of improvements and be much the stronger for it. And if they don't, then that tells a different story (but it's one I don't expect to hear).

Different type of growing pain, but this reminded me of when Foursquare forgot to renew their domain back in March (http://tcrn.ch/gk73zQ).