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The Greed Rush: Venture Capital Enters Cannabis 

Wednesday, Apr 20 2016
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"There are a lot of big business people coming in, and their only goal is taking over," she says. "The prevailing attitude is dollars. It's all about the money and the returns."

Whether activist, dispensary, or longtime grower still cultivating a plant sprouted from seeds smuggled from Afghanistan, current cannabis industry players who want to stay in business now have a choice: Take on a partner and take investment, or get displaced. In serious business circles, and among cannabis's most successful entrepreneurs, there is little sympathy for the gray-market operations that were able to push product that would get laughed out of today's marketplaces.

And it looks less and less likely that the activists, outlaws, and hippies who made marijuana legal and paved the way for the plant to become the basis for a new industry — but lack the access to capital and the business savvy that the new wave of entrepreneurs enjoy — will be able to cash in. Or even remain in the game at all. In the last year, as the state considered regulations that would have denied licenses to people with drug convictions on their record, activists rightly identified the racial implications. How could you deny a place in the cannabis industry to those — mostly black and brown people — most affected by cannabis prohibition? But now a class divide is appearing — between those with access to capital and those without.

"This is the hardest transition of my life," says Tim Blake, the longtime Mendocino County marijuana grower who co-founded the Emerald Cup, the outdoor cannabis competition prized as much for its true-to-its-roots values as its high quality of the offerings.

At the Cup this past December, Blake took significant heat from his former friends and comrades in the semi-legal market for publicly endorsing Parker's AUMA initiative. He's since rolled out an Emerald Cup-branded line of cannabis products and is seeking investors and partners. When I reach him by phone on a recent morning, he's moving a million miles a minute, directing some of his employees, begging my indulgence to take other calls, and sending his kids out the door. He pauses to take a breath.

"It's a whole different world," he says. "If you don't know how to navigate that, you're going to get screwed."


When Rehmatullah and Thiel were studying business and making investments, Valerie Corral was learning how to prepare her friends' corpses for burial.

"It's harder than you think," she tells me over tea in her kitchen, in a rambling and shape-defying wood-frame "hippie house" built in fits and stages over the 30 years she's lived on a hilly plateau overlooking the Pacific near Santa Cruz. "Especially if someone is sick with cancer. The body can be very toxic."

Corral takes a sip from her mug and pauses. Muted conversation floats from the adjacent living room, where her mother, who is in her 90s and recovering from recent surgery, is laying on a couch watching a movie on an Apple monitor. The last rays of sun from the early April day — spent outside with a volunteer crew of about 10 people, preparing a hillside for another cannabis-growing season — can still be seen bouncing off the Pacific and lighting up the marine layer, visible through the French doors leading to the patio.

All around us are moving boxes. Corral, who will turn 64 this year, has until the end of the month to move out.

A petite barely five feet tall, with high cheekbones, piercing eyes, and dyed hair that almost matches the orange bandana she wore in the field earlier today, Corral has been getting stoned since she was a teenager in the 1960s. She started using cannabis medically after a car crash near Las Vegas when she was 20. She and a friend were out driving in a VW bug in the desert when a joyriding airplane buzzed them overhead, close enough to touch the car. Too close.

"I was sitting in the driver's seat rolling a joint," she says. "He basically landed on top of us."

Bumped by the plane, the car rolled several hundred feet through the desert, through "rocks and trees and brush." Corral was thrown from the vehicle. Everyone survived, but Corral had a massive head injury. Brain damage led to migraines, epilepsy, and grand mal seizures. They were out of control until her then-husband, Mike, read in a medical journal that marijuana had solved seizures in mice. A few puffs fixed Val Corral's head, too, so the couple started growing it illegally in the late 1970s.

By the early 1990s, activists and agitators like Dennis Peron, the military-man-turned-hippie whose marijuana sales in the Castro District reputedly helped fund Harvey Milk's early bids for supervisor, had publicized cannabis' healing power for AIDS and cancer sufferers, and were selling the drug openly. In 1993, Mike and Valerie followed his lead into the medical marijuana game. They planted a bigger garden. They sold to who could afford it, and gave the rest away for free to people who needed it, calling their organization the "Wo/Mens Alliance for Medical Marijuana."

WAMM has a small office on the west side of Santa Cruz that serves as the collective's dispensary. It's unlike any other in the state. You can go in and buy some of the organic outdoor grown on the hillside near Val's house — some of it for as little as $5 a gram, cheaper than other dispensaries by half — but only after you are interviewed and approved for membership. On my visit, while there were young men in their 20s behind the counter, speaking eagerly about the flowers available, the people sitting around the lounge smoking were old, infirm, military veterans, sick. Some had driven up from Monterey or Salinas. This is their closest and best option.

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About The Author

Chris Roberts

Bio:
Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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