MARIJUANA

Inside one of Denvers largescale grows bespoke factories dedicated to harvesting marijuana.

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INC.
As legal weed continues to creep across America, we meet the suited pot barons and entrepreneurs set to hit some seriously high returns. Words Richard Clune
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TRIPP KEBERS BLACK HUMMER SMUDGES AN OTHERWISE EMPTY SIDE STREET OF DOWNTOWN DENVER.
Hey, jump on in, says the 45-year-old, motioning to the passenger door. Beneath a snarling metal grille sits the personalised number plate Dixie X. Kebers hair is slicked-down, his skin luminous in a way that you tend to see on the wealthy and the suit on his stocky frame, custom-made. Sharing the car with Kebers CFO and another acronymic executive, a smile spreads across my face prompted partly by the conspicuous transport but mostly by the fact that one of the biggest names in American marijuana is named Tripp. Of course he is. There have been other monikers, mind: drug baron, ganjapreneur, king of weed... He swats at them in stern rejection, though hes struggled to shake the Willy Wonka of Weed. It seems fitting as we barrel beyond the city limits of Colorados capital, cocooned in this whimsical machine. And, like Wonka, Keber looks set to soar. Come January, when legal recreational marijuana sales look likely to start and we mean fancy-a-hit, duck-downthe-shops kind of legal hes in a very good position thanks to his pot-infused business, Dixie Elixirs & Edibles, making marijuana sodas, chocolates, bath salts and beyond. When you invest in marijuana, you invest in America, states Keber, swapping Willy Wonka for Uncle Sam. Its a rehearsed line (I hear it several more times today), but its delivered with certain pride. What were talking about is big business as it stands today, the [medical] marijuana industry is bigger than the United States corn industry. Thats an estimated $1.7bn of sales in 2013, accounting for the 18 states and one district (Washington DC) where the sale of marijuana is available to the millions of medical consumers approved to inhale. Add to this the 12 states poised to introduce medicinal legislation, pack it down with the progressive moves of Colorado and Washington State regarding legal, recreational toking, sprinkle it with a recent Pew Research Poll that showed a majority of Americans (52 per cent) favour legalisation (up from 12 per cent in 1969) and its obvious the business of marijuana is about to ignite. Trade journal Medical Marijuana Business Daily (a Wall Street Journal of weed, if you will), recently projected marijuana sales revenues of up to $6bn by 2018. Should lobbyists ever achieve their ultimate high federal
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legalisation then were talking about an industry, according to economist Stephen Easton, that could reach $100bn a year. This is no longer about the oft-lampooned herb as dealt by half-baked hippies. No, this is the complete re-imagining and repositioning of an already lucrative commercial industry; the emergence of an agricultural sector arguably pivotal to aiding Americas ailing economy. And its an industry attracting people of Kebers ilk. Forget greying, doe-eyed activists swaying to Grateful Dead; this green rush sees a swarm of university-educated, non-smoking suits stuffing baggies with potent strains of business acumen and legitimacy. Welcome to Weed Country, USA. Welcome to Marijuana Inc. Kebers facility is a non-descript, single-storey affair wedged between a rusty rail yard and an eight-lane freeway. We did some risk evaluations on the location and it came up well, he offers as we enter. A cop shop sits nearby, one of few buildings in this recently derelict industrial precinct not growing hydroponic marijuana. Most of Kebers neighbours are grows 30,000 sq ft factories stacked with up to 10,000 plants. There are between 250 and 300 planted in the greater Denver area alone. The Dixie factory is a little more science than straight-up sativa. Following a tour of the office a beige setting ripe for an acoustic David Brent moment we move on to the lab. Sterile, with a lingering scent of tomato soup, here, the handful of workers sport white coats, hairnets and gloves. Some are busy infusing chocolate truffles, their discussions largely built on two acronyms THC and CBD. The first tetrahydrocannabinol is what gets you high. The second cannabidiol is an anti-psychotic hemp plant extract effective against a range of ailments. Keber points towards his six-figure centrepiece, a stainless-steel extraction unit: weed in one end, oil out the other. Another machine produces 175 cases a week of Dixie soft drink, the companys premier product. The sparkling fruit juices are all formulated with either 40mg or 75mg of THC and other cannabinoids per 12 ounce (3.4-litre) serving according to a sales brochure.

The Dixie product range takes in everything from edibles (crispy rice treats, fruit lozenges, mints) to elixirs (soft drinks and drops) and topicals (external creams, bath and massage oils and more). We founded in April 2010, operating with two employees, not including myself, Keber recalls. Wed make it in the morning, package in the afternoon and then sell [to dispensaries] in the evening. Every. Single. Day. The company has really come a long way in those three years weve just under 40 employees now in this facility and directly associated with Dixie, and then you expand into our

Tripp Keber

The Washington State and Colorado markets could exceed $1bn each.

other asset companies [a security company, dispensaries and cultivation facilities] we have about 110 and growing. Beyond the lab lies a large storage area and loading dock. Its as imagined labels, boxes, palettes, a forklift except for a heavily padlocked internal steel cage: the magic room. Here rest the relevant products prior to shipment and a safe guarding numerous bags of trim the leaves and stems which are the key ingredients of Kebers liquid green. I would be foolish not to be excited about the prospects of success. Were creating an incredible amount of wealth for this company Youre talking about a market, in Colorado and Washington State, that could exceed a billion dollars each. Originally from Washington, Keber studied political science before a segue into start-ups. I was a dot-com kid back in the 90s. Of the four start-ups, Ive had two that were successful, one was a pass and this one is TBD, he says, again with the acronyms. Though I must admit Im feeling pretty good about it. Our company [Medical Marijuana Inc], which is trading publicly, came out in August 2012 at about $30m and by February we were

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From top: the leaves and stems, known as trim, used to produce liquid green; infusing truffles with THC; Dixie Elixirs drops and mints.

worth half a billion dollars. Our stock was at three cents and it went to 50 cents. It was an exciting day for us. We didnt go out and buy Ferraris, but there was a lot of wealth being created. With more to come. Kebers currently negotiating the launch of a genetics company tapping the home-growing market with his own seeds and clones and a further four Colorado dispensaries. Given federal law prevents the interstate transport of marijuana, hes also finalising grow facilities in Arizona, California and Washington State. Massachusetts, Connecticut and New York are to be determined [pending votes on medical marijuana use]. But Ive got prospective partners in all of these markets. Our intention is aggressive expansion to have the Dixie brand in no less than four markets beyond Colorado by the end of the year. The brash suits, the bold statements Kebers aware hes not how most would envisage a pot protagonist. I got into this to make money and to build a business. But in a short period of time we realised that these products are also a wellness

platform. There are some people in the industry who dont like us the suits. We come from a different angle to the hippie dippies, who have a strong relationship with the plant thats not me. People often ask, Why are you in the industry? Well, Im in the industry to make money and to help people. It was on November 6, 2012, that Washington State and Colorado crushed wellestablished notions of American conservatism by voting to legalise the use of recreational, or adult use, marijuana. Legislation in both states reads similarly: adults, 21 years and older, can possess up to an ounce (28.5g); public consumption is illegal, as

is driving under the influence (current DUID levels are set at five nanograms of THC per millilitre of blood). Coloradans are permitted to grow up to six plants while users in Washington will eventually purchase their marijuana from state-licensed providers. Retail sales are expected to start early next year following further voting to set taxation levels (sales and excise). Educations highlighted as the key recipient of this money a popular political platform and one that was central to pot prevailing. Interestingly, more people in Colorado voted in favour of legalisation than did to reinstate Barack Obama whos largely smirked his way through any discussion regarding the new state laws that defy federal law claiming marijuana as a Schedule I illegal substance. Weve got bigger fish to fry, said Obama following the historic November vote. It does not make sense from a prioritisation point of view for us to focus on recreational drug users in a state that has already said that, under state law, it is legal. Speak to the people invested in pot and most arent worried about a sudden arrival of blacked out SUVs and armed federal agents swooping their various set-ups. Of greater concern is that the feds have forced banks into marginalising them. Marijuana, for all its predicted wealth, remains a cash business banks refusing applications for even a simple account for those involved in weed. Most former account holders had them forcibly closed over the past two years, while last June Visa and MasterCard ceased processing cannabisrelated transactions. Theyre worried about losing their federal insurance, says Denver dispensary owner Georgia Edson. What it means to us is that youre careful with your money. Running a cash business is challenging. Its also frustrating and a little scary, as you dont want to leave large sums of cash around. We just want to be treated like any other business, we just want to be able to write cheques. With just under 300 dispensaries in Denver its actually easier to find pot than it is to order a cup of muddy Starbucks. (There are allegedly three dispensary licences for every outlet of the coffee chain). Edsons discreet MMD dispensary is a 10-minute walk from downtown, among hip urban apartments and bars. Dispensaries can take anywhere between $500 and $5000 a day, depending on their size, she says. In fact, according to tax receipts, Coloradan dispensaries sold $186m of marijuana in 2012. You dont actually get into this business just because you like pot. You do it because you want to be in this business and you can swing it financially.
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At Edsons dispensary, a female staff member sits rolling joints 50 an hour on a good day. A wall-mounted blackboard announces the menu, detailed via the categories sativa, indica, hybrid, hash and house. Transparent jars beneath the glass counter are densely packed with bud Super Lemon Haze, Lodo Kush, Swiss Bliss Papaya, among others. A solitary green finger lies at the bottom of the Critical Kush jar. A mother in her early forties, Edson is also a licensed clinical social worker. Married to a prominent local lawyer, she runs marathons in her spare time. And no, she doesnt smoke. I use topicals [a lotion or balm infused with cannabis]. It doesnt make you high, just relieves the knee pain that I get from running. I have an eight-year-old son and his schoolmates all know what I do for a living. And Ive never had a negative reaction. We just want to look, act and smell like any other business and that particular issue permeates so much of what we do. Its why we are OK with being so highly regulated. It could be argued that Colorados cannabis regulations are oppressive an explicit series of rules that govern everything from the size of storage jars to the specific DVD player used to record security footage and the barcode system that tracks plants from seed to sale. Across town, at the comparatively stark MMJ dispensary, Jake Salazar and his team service 700 to 1000 patients a week. Asked what that equates to in takings, the 32-yearold son of a wealthy Hispanic businessman locks a steely gaze and shrugs: I cant tell you that. But were paying the bills. Salazar entered the medicinal market in 2008. He now owns three city dispensaries and a strong expansionist vision. I employ just under 100 people and Im looking to open another seven stores. When I first got into this, it was weird to say I was in the pot business. I didnt tell my family for more than a year; theyre very conservative and I didnt want them to know, I didnt want them looking at me like a drug lord. A new father, Salazar hopes his daughter will grow up to respect his business of choice. I hope she looks up to me and sees we took advantage of an opportunity. Weve worked damn hard to build a respectable company. To discuss marijuana legalisation and law reform is to presumably hear from a vocal opposition. Yet here, in Denver, beyond the occasional mention of mental health and child welfare, that opposition is noticeably muted seemingly resigned to the fact the fight is over. At a public meeting convened by The Denver Post, Amendment 64 and the Road to Marijuana Legislation in Colorado, the panelists, including Congressman Jared Polis, are largely pro-pot. Alongside Polis sits Diane Carlson, spokesperson for non-partisan
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alliance SMART Colorado, the tagline of which reads: Putting the publics interest ahead of the marijuana industrys. While Carlson speaks of proceeding cautiously, greater emphasis is placed on the implementation of DUID measures and the governing of THC potency levels. Denver mayor Michael B Hancocks stance is similar openly opposed to marijuana, though he stands by his constituents desires. While Hancock denied GQs interview request, he presented two letters he recently wrote to the city council outlining his position. My priority is to keep our citizens safe and healthy, and to protect our neighbourhoods, Hancock wrote in April. The passage of Amendment 64 is unprecedented and many federal, state and local questions remain unanswered. The mayor maintains a stance against public consumption and proposed smoking clubs. As a parent, I worry about how the increased presence of marijuana in our city will affect our children and our grandchildren. Despite a few lessons learned from medical marijuana, the long-term implications of that industry and the potential for an expanded industry will not be known to us for perhaps a generation or more. There is no denying, however, the potential for a negative impact on our kids on their home lives, their health, their education and their future. There are no easy answers to what we are facing. Councilman Charlie Brown readily accepts this final point. About the only certainty of this business is that nobody knows whats going to happen, Brown says, when we meet at his office an homage to his Wyoming roots and the ways of the cowboy, set against Cherry Creeks wealthy suburban backdrop. A giant photograph depicting a historic wagon scene dominates the wall behind his desk, a cowhide is splayed on the far wall, next to it a series of cattle brands. Wild West dioramas clutter his desk, while the chair next to me was most certainly a living bull at one point. A nearby hatstand boasts two Stetsons. Funny thing is, I grow tomatoes and I go to a store that supplies dispensaries to get my soils and my lights. Those stores didnt exist five years ago these are businesses that people hadnt thought of, that are here because of medical marijuana and that are going to be here because of adult-use marijuana. The commercial real-estate people have sure benefitted for the first time in years their phones have been ringing off the hook. Dressed casually in beige shorts and aqua polo shirt, the white-haired father of two (lets just say Im in my sixties) gives a sigh. I havent smoked the stuff in 50 damn years. I dont like it and I didnt vote for it.

I gave $250 to the campaign against it. But the voters have spoken and I believe in a representative democracy. Will it be good for Denver? Well see. It has employed people and will employ people. But there are days in dealing with this that are like trying to pick your teeth with a rattlesnake its so convoluted and complex. Right now its about how we regulate and control it. There are some people in the industry who are good and some who are not so good the more you get rid of the stoners, the better it will be for the industry. At the end of the day, all I know is that the whole world is watching and weve got to do this right. Yale MBA Brendan Kennedy admits his 2010 phone call to former university buddy Michael Blue was unusual. After school I went to work for a venture capital bank in California. Id listen to pitches to capital backed companies looking for investors companies such as Twitter, Facebook and Groupon, LivingSocial and Tesla Motors. Then, three years ago, I came across a technology company in the cannabis industry. I called Michael from a parking lot and said, I need you to quit your job and come join me, Kennedy recalls. Blues initial surprise soon transformed to excitement as the pair spent 12 months researching the industry, from, growers and dispensaries to workers, policy advocates and investors. We were pretty quiet to begin with and simply asked a lot of questions, Kennedy says of the period. Most people thought we were the DEA we realised that perhaps a suit and tie was a bit much.

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PHOTOGR APHY: GET T Y IMAGES; KIM SIDWELL; RICHARD CLUNE

Clockwise from left: cannabis cultivation; Tripp Keber the Willy Wonka of Weed; Denver dispensary owner, Jake Salazar.

Its not about partying for three days, its about people wanting to come and taste freedom.
Matt Brown, My 420 Tours

our lifetime. We are past the tipping point. Things are going to happen sooner than people imagine. Its with a sense of slight apprehension that I enter a 27,000 sq ft grow on the outskirts of Denver. At the rear of a cul-de-sac stuffed with facsimile metal factories, the staircase entrance dumps me straight into an office where a dozen men, most in their twenties, are picking sorting the bud from the trim. Through a series of doors and black tarpaulin curtains, up another set of stairs and I enter an air-sealed room stuffed with more marijuana than is imaginable. Fans whir as bright lights encourage the forest of young female plants to expedite the ageing process. Its an emerald sea of unmistakable jagged leaves. The white light of this room is replaced by orange in the next. Mature plants the facility holds around 7000 all up nursing sparkling, spherical buds: its as though Ive stumbled into the fantasy of a teenage boy (minus a naked Scarlett Johansson). Im handed a headlight for the adjoining room darkness cloaking the facilitys best lookers for the next 12 hours in lieu of a natural night-time. The smell is immediate, perhaps due to the lack of light, with the spotlit glimpses revealing advanced plants bowing under the weight of potent, bountiful buds. I need some air and head for the front entrance past the workers collectively chain smoking cigarettes. Each discusses their work as just a job, no different from gardeners manicuring school ovals or suburban verges. Its just a way to earn money, dude, says one employee. But the moneys alright and it beats waiting tables.

In early 2011 they launched Privateer Holdings, Americas first cannabis-centric private equity group. Put simply, the company secures wealthy individuals to invest in marijuana-related start-ups. Their first acquisition leafly.com, an online rating system for strains of weed popular among dispensaries and smokers was a reported six-figure spend. With current monthly traffic of more than two million hits, the site is now valued at $4m. We evaluated the business risks and said theres clearly a business opportunity here, says Blue. The next risk for us was purely reputational. Did we want to be known as the guys who went to Yale and then went into the cannabis industry? While neither would detail the companys next venture, they admit to securing $5m of a desired $7.2m from private investors. Theyre almost all looking for a financial return, obviously, says Blue, whos never smoked cannabis. But they are also looking for a social return. They are looking to end prohibition through the creation of mainstream business. Kennedy, 41, a competitive triathlete who last used marijuana via vaporiser a year ago, adds: Cannabis legalisation in the United States and around the world is inevitable in

I imagine there to be some obvious perks to tending such plants, though the facilitys manager quickly states that each employee is searched at the end of each shift. Theft, as in any other business, is not tolerated. So, whatd you think of the grow? Matt Brown later enquires over lunch at a downtown bistro. An articulate former Bloomberg banker and New York sales strategist, Brown (no relation to Charlie) went from flogging ATM software to the Middle East to easing fear of marijuana use among American politicians. As well as maintained marijuana consultancy, he recently co-founded Americas first cannabis-themed tour company, My 420 Tours. My response to Browns question is to smile a childlike grin more often etched on the faces of children walking into Luna Park for the first time. He appreciates the sentiment. Thats exactly what I want to offer people with the tours, that feeling youve experienced, Brown says, between bites of a burger. Its about understanding that people want to come here and experience something different. The real goldmine is not in partying your face off for three days, its about people who live somewhere that is completely different to here and who want to come and taste that freedom and not worry that the joint in their pocket is going to get them sent to jail. As such, proposed tours will take in grows, dispensaries, cookery, yoga and some smoking. I owned my own house and had roommates, and every month wed have somebody come stay and very quickly the word spread that the coolest part of the trip was to come and see my grow room which was a 10 by 10 ft, one-light little thing in my basement. I had all these signs up on the door a copy of the law, Do Not Enter and my [medical marijuana] card. Before wed go in Id say, youre here, this is the law and the state of Colorado has enabled me to follow these six silly little rules and as long as I do that, I dont go to jail. Id also tell them that if they thought they were going to come in and steal my pot, that Id call the police who would come and arrest them and return my pot to me. Wed all get a giggle out of it and then Id open the door to this blinding orange light and this huge ugly-ass sativa. They end up geeking out and asking all these questions about the plants, the law and the industry, and wed have these cool conversations. I see a lot of what were doing with the tours as the next iteration of that. I would love to send people home knowing that theres someone in Massachusetts going, Youre never going to fucking believe what just happened in Colorado its the coolest place ever. n
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