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Josiah M. Hesse Josiah M. Hesse

Meet the Wolves of Weed Street


Worlds collided in Denver at "Weedstock," which hooked up the marijuana community with rich investors. Where will the marriage of capitalism and cannabis take us?

6 Substance
Score


“Would you like a bowl or a one-hitter?” a very nice lady asks me at 7 am, as I check in at the press table of the swanky Westin Denver Downtown Hotel. I select the bowl, and the woman places a frosted marijuana pipe into a tote bag reading “First Annual Weedstock Conference.”

Despite the title and the promotional paraphernalia, no marijuana is being smoked at this conference. I bet that exceptionally few attendees even smoke cannabis. We are gathered here to celebrate the wonders of a different green substance: money.

“Something like this would’ve been laughable only a year ago,” says Alan J. Brochstein, CEO of 420 Investor and organizer of the Weedstock Conference, a convention for those looking to make a Wall Street profit off the new legal marijuana industry’s projected “Green Rush.” “But this is not a party. It’s a smoke-free hotel.”

Having covered the Denver marijuana scene for a while, at first I find it refreshing to attend a sober, no frills, no hip-hop, straight economics event about cannabis. Over the next three days (June 29 to July 1), I’ll attend lectures on how to make millions in the weed game by investing in security companies, grow operations, vaporizer manufacturers, the marijuana hospitality industry, social media startups (apparently we should expect big things from MassRoots, a kind of Tinder-for-stoners app) and the inevitable cash tsunami that will come when cannabis becomes fully integrated with the pharmaceutical industry.

While there are a handful of women, minorities and medical-marijuana advocates with wheelchairs and crutches in the audience, the majority of faces staring up at power-point presentations and exchanging business cards are what you’d expect at a convention of wealthy investors: white men in middle age and beyond.

Since my only previous exposure to this world of high finance was through the films of Oliver Stone and Matt Taibbi’s reporting on Wall Street for Rolling Stone, the classist hairs on my neck stand up more than a few times over the course of the convention. In my hippiefied Colorado mind, marijuana is an eternal gift for the purposes of widening consciousness and bringing about enlightenment; the idea of using it for the myopic purpose of becoming a millionaire seems almost sacrilegious.

Yet even though I am an idealistic pauper whose monthly income is dwarfed by these guys’ bar tabs, I quickly recognize that we all share the same fiery root in our personalities: We are all nerds. Whether our motive is to get rich or just satisfy extreme curiosity, I am taking notes alongside these bald-headed businessmen like Jane Goodall studying the behavior of some bafflingly brutish species.

“When legalization happened at the beginning of the year, prices on marijuana stocks went up sevenfold—it was crazy,” says Brochstein, who founded 420 Investor (subscription only) in September of last year, an online hub connecting those with money to those with a marijuana upstart. “Some went up 20-fold. Then the market peaked last March and crashed, losing about two-thirds of its value.”

“There aren’t many intelligent, well-informed marijuana investors,” says Paul Cohen, who claims to have made $2 million since 2012 investing in marijuana stocks. “This is the biggest thing [in the stock market] since the Internet.”

This was around the time that Brochstein announced the Weedstock conference, and there was a fear that a drop in the pot market would lead to poor attendance at the first meeting of marijuana investors. Though he says that event attendance has exceeded his expectations, with people from all over the world flying in to Denver—most of them with no background in marijuana—in order to get into what is thought to be the next major stock bubble.

“There aren’t many intelligent, well-informed marijuana investors,” says Paul Cohen, president of the investor relations firm Grass Roots Research and Distribution, who claims to have made $2 million since 2012 investing in marijuana stocks. “This is the biggest thing [in the stock market] since the Internet.” Just as with the tech bubble of the ‘90s, Cohen says, there has been “a lot of speculation initially, with a lot of companies failing. I have 80 companies, and maybe 10% will make it. But the great thing about this is that the demand for marijuana is just overwhelming, which makes the financing of these companies very important.”

While addressing the conference at lunch, Brochstein cites statistics purporting that marijuana sales in 2013 reached $1.43 billion, and are projected to grow to $2.34 billion this year, making it a faster-growing industry than smartphones. And yet, at the same time, he says that around 65% of the funding for this industry is coming from friends and family of the business owners themselves. Similar to the end of alcohol prohibition, there is big money to be made for those who act quickly. Yet due to the cultural divide between investors and those who have been growing marijuana throughout its dark days as an outlawed product, the motives and methods of these unions have often made for a rocky dynamic.

“You have to respect people who have been in the industry for a long time,” Brochstein says. “They’re not always the best business people for a legal environment, but they know a lot about marijuana. The best companies have married the old, institutional knowledge of the industry with business people who understand how to work spreadsheets.”

“You don’t start a public marijuana company with anything less than $5 to $7 million—minimum,” Cohen says.

While my introduction to the world of high finance paired with legalized marijuana is initially fascinating, after two days of lectures about pink-sheet stocks, scaling up and why the SEC could ruin everything (their suspensions of various stocks killed investor confidence, contributing to the market’s plummet last spring), the novelty begins to wear thin. The technical language and alien aims of this community leave me violently bored. During one Q&A session, an audience member asks about “any interesting diversity venture funds,” and everyone laughs wildly, as if this is the funniest joke they’ve ever heard. I just moan like a goat and stab a pencil into my eye.

Most marijuana conventions are frustrating for their Vegas-like explosions of cheap personalities, loud music and giant breasts, but at least with them I have some frame of reference. As a lifelong fan of cannabis, I can keep up when people are geeking out about strains, dabs and the best THC-infused hummus in town. But I am not as motivated as these guys to enter an aesthetic-free universe of numbers and graphs merely for the end result of owning more money.

Ignoring his wildly baseless ideas about pot smoking, I inevitably ask the cigar-smoking dachshund—whose floppy ears are now shaking with anger—why he would want to profit from what he believes is such a harmful and addictive product. “I’m a capitalist,” he says. “I can separate my personal feelings from where I make money.”

This division between us becomes dramatically clear on the second evening when I am chatting with one particular wealthy investor in the marijuana stock game, sipping cocktails during a convention after-party. After he regales me with stories of getting into the game early enough that he made a killing, I casually mention that I am a daily pot smoker and therefore also had a vested interest in the direction of this market. (Seeing my press badge, the man insists our conversation be off the record—so in the name of journalistic integrity, I will describe him as an overweight dachshund in a pinstripe suit, a cigar in one hand and a cloth bag of gold coins in the other. This not true, but the conversation is completely factual.)

The millionaire’s face goes grave and annoyed, as if I’ve just said the name Voldemort within the walls of Hogwarts. He then begins a doomsday tirade about the inevitable wave of lung cancer that will soon sweep through the pot-hazed cities of Colorado. Marijuana is as dangerous to the lungs as cigarettes, he says, and vaporizers aren’t any better. This cannabis tycoon looks deep into my eyes with a frightening intensity, telling me I am a smart kid and should stop smoking pot immediately—but I probably couldn’t, he says, because “marijuana is incredibly addictive.”

Ignoring his wildly baseless ideas about pot smoking (scientific studies tend to show no link at  all between cannabis and any type of cancer), I inevitably ask the cigar-smoking dachshund—whose floppy ears are now shaking with anger—why he would want to profit from what he believes is such a harmful and addictive product. “I’m a capitalist,” he says. “I can separate my personal feelings from where I make money.”

This leaves me a bit nauseous. Is there really nothing more to this man than digits on a page? He is no different from a weapons manufacturer selling arms to both sides of a war, or the soda companies that fund public schools in order to blast their product into children’s faces all day. Obviously, I don’t share this man’s sentiments about marijuana. But if I did, I certainly wouldn’t feel good sleeping on a bed that was purchased with marijuana money.

During the closing presentations the following morning, I can’t shake the feeling that I am among people with a radically different worldview from my own. I am desperate to curb my snobbish impulses, trying to silence the idealistic voices inside my skull that demand that I feel superior to these people, insist that I am more enlightened and have a better concept of death and the fruit of pleasure. Though in the end, after being reminded for the thousandth time that getting in on marijuana stocks now could make me a millionaire in several years’ time, all I can think is: I should really get my portfolio together.

Josiah M. Hesse is a Denver-based journalist who covers marijuana, politics, entertainment and pop culture. His work has appeared in Westword, Colorado Public Radio, Out Front Colorado and Vice magazine. His previous piece for Substance.com was about how he learned to use drugs like an adult from counterculture author Tom Robbins.