A Multi-Billion Dollar Industry

Sheet of a hemp on a background of money
A new multibillion dollar industry became a reality when Colorado and Washington States approved recreational marijuana in late 2013. For the first time, re-sales of marijuana and marijuana extracts and edibles are legal transactions in two of the United States.

When the President of the United States publicly refers to the relative impact of alcohol and marijuana on our nation’s social ills, as he did in early 2014, some form of Federal legalization, regulation, and taxation cannot be that far behind.

Together with a jump in the share price of publicly-held marijuana-connected companies, the private placement market for marijuana-connected businesses has exploded.

Marijuana funding portals, now permitted under new SEC rules, offer marijuana businesses with a minimal intermediation drill and burden. For the first time, marijuana entrepreneurs can meet prospective investors online at a neutral forum with clear guideposts along the way.

There will no longer be a need to pay membership fees to join a group of people most of whom are actually afraid to share too much with each other anyway.

So . . . capital is flowing in, new companies are launching, existing businesses are expanding . . . and all the while a “prohibition-premium” still obtains with cannabis connected investments.

Where are these outsized, grey market opportunities? How can there be any real opportunities insofar as growing, processing, and retailing marijuana all remain illegal under Federal law?
Because, while nothing has changed in the eyes of Federal law, everything has changed in the eyes of Federal law enforcement.

Since “the Cole Memo” was released late in 2013, as long as marijuana businesses comply with easy-to-follow Federal rules and regulations and do not violate applicable state law, these businesses have nothing to fear from the Federal prosecutors!

Public perception of using marijuana, historically a sore point, has never been more positive, especially with the young. Sales of edibles and extracts and vaporizers, which lack the traditionally negative stigma of “smoking a joint,” are booming.

Getting “high” in a healthy way has become a new fashion. Many prefer to alter their consciousness with a dried flower extract as opposed to alcohol. The next day both your friends and your body know the difference, just for starters (gratuitous editorial note).

Over twelve U.S. States are predicted to legalize some form of marijuana in the coming two or three years.

There will come a day when the Federal government will no longer classify marijuana in the same category as heroin. The inevitability of the ultimate demise of a failed war on the wrong drug is becoming more and more obvious to a majority of Americans.

Challenges remain, some serious, such as banking and taxes, and others less serious, such as regulations, moratoriums, and security This handbook is an introduction to making money in marijuana businesses, including cultivation, retail sales, manufacturing edibles and infused products, payment processing, packaging, paraphernalia, testing laboratories, and paraphernalia.

About Douglas Slain

Doug received a JD from Stanford Law School, a MA from the University of Chicago, and a BA from DePauw University (Phi Beta Kappa). After practicing real estate and finance law at then Pillsbury, Madison & Sutro, he founded four national monthly law reporting titles now owned by Thomson-Reuters. He served two consecutive terms as chairman of the American Bar Association’s General Practice section’s Professional Responsibility Committee. Slain was an ABA-appointed rule of law consultant to the Ministry of Economy for the Republic of Latvia as its secured transactions adviser. He taught briefly at Stanford Law School as an adjunct clinical law professor. Slain has been the managing partner of Private Placement Advisors since August 2009. In January 2013 he founded Outliers Network.

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