is a political process to put them on. people expect that to continue based on the spectacle around the appointments. that was very much the case with justice sotomayor a. that colors the perception. >> think back on some the nominations. my colleagues will correct me. but kennedy and scalia were unanimous? ginsburg, three votes against? that is not the world we live in. on that note, it is 2:00. we hope to see you back here next year. thank you. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] the first cannabis business summit in colorado. then members of the d.c. bar review the 2013-2014 supreme

court term. then janet yellen speaks at an imf conference. july 1 was the six-month marijuanay of legal use. next, business owners, activists , policymakers talking about the futures of me legal cannabis industry. it was front of the first cannabis business summit. this is two hours. >> our first speaker was scheduled from harborside. unfortunately, steve sends his regrets but has fallen ill with the flu and was unable to make it to denver. we are excited to be able to business partner, take his spot. we are grateful to troy for taking it at the last minute.

we've had the pleasure of working together for about a decade now, first with the marijuana policy project and then he founded the art view wasp right before ncia formed in 2010. troy a, more than anyone, understood early, early on that building a new kind of profitable american industry that is politically engaged and for howan example commerce can be transacted in this country with legal marijuana would change the world. be putely no one would behind bars and cages for using this plan. he is an inspiration, a mentor, and a friend to me and it's an honor to introduce troy. he is our first keynote speaker. [applause]

>> give it up for aaron smith. [applause] wow. there's a lot of people here. this is pretty impressive. i saw so many chairs and i thought this would really be the great next american industry. we've been saying that for a long time. now it seems that it's actually coming to pass. this is by far the largest number of people who has ever come to a business conference for this industry. here and for being taking whatever risks you've taken in life to wind up here. we will find out more about that as we go forward. i just want to take a quick moment to collectively acknowledge the fact we are

sitting on the soil where cannabis is legal. [applause] even though it's been well over one year since it has been through, it sends chills down my spine when i think about all the hard work and against all odds .hat was passed now, everything becomes possible. when i started in this movement when i was eight teen, i was a marijuana policy project first volunteer in 1995. basically through my life, most them ihave said i told wanted to make cannabis legal "that willuld say, never happen. that's hopeless." they would proceed to tell me why all the reasons making marijuana legal --

pharmaceuticals, parents, whatever. a litany of lists why we would never make marijuana legal. then something happened a few years ago. overnight, the storyline changed. then when i told people what i was working to do to make marijuana legal they would say it was inevitable. how did that happen? i think the commonality between those two approaches as they absolving the person of responsibility for doing anything. if it's hopeless, why do anything? if it's inevitable, why do anything? it's important to recognize it was not hopeless then and it is certainly not inevitable now. the inevitability is in everyone in here and everyone who cares

about this cause. in is in their hearts and ui their wallets. it's only inevitable if people put their desire and passion into this and continue to donate, take action, move the ball forward politically. if you donated your time or many of the political efforts of the past, can you raise your hand? let's give these guys a big round of applause. [applause] effort andor your your energy. the only reason there is now a market for legal cannabis where there is money to be made is because people have gone out against all odds work to change the future laws which will only be changed with more of the same. we have had just an amazing run

.ecently i want to of knowledge the recent house appropriations bill . for the first time, a body of congress has said something positive about cannabis by blocking the dea from spending laws.ces forwarding state it was amazing. even the most optimistic among us did not think it was going to pass this year. congress is always the last body to do anything. passed byid it and it a 30-vote margin. people are really waking up and you know people are breaking up are members of congress actually on your side. what politicians and elected officials are starting to realize is cannabis is a popular among their constituents. we will see more and more

positive reforms. let's give a nice round of applause to our fellow activists and business people from the great state of new york becoming the 23rd medical cannabis state. [applause] finally. for manybeen a slog years trying to get that passed. it's good to know there is something there and i'm sure it will expand over time. i also want to welcome minnesota -- minnesotatate as the 22nd state from a few months ago. [applause] it's also worth mentioning -- well, it's a great thing but beating theruguay you asked to the punch on becoming the first country to fully legalize cannabis for adults. [applause]

in thes not just here u.s. but it's spreading. the canadian market is opening up. across the world and it is just incredible. here's why. cannabis prohibition does not withstand the light of day. ignite aeded to do was conversation. once that conversation got pread in it read -- it s living rooms and cocktail parties across the world where realized cannabis was a reasonable adult choice with far less social harms than anything else we let people do. and also with great and if it. it is remarkable moment in history we are all getting a chance to be a part of. thingot just a political that all three of these things we are seeing such a remarkable

shift. we have some big, big things thatg up just this year could either continue this storyline that we are all building or it could send it in the other direction. there are three ballot initiatives happening in november. on legalization in november. we also have alaska voting on legalization for adults in november. and florida voting on medical cannabis. none of these three are a given. they are going to take a lot of energy and work and we have to win. momentumo keep this going. advance forin anything you are doing more will be doing to help make sure that

we succeed there. one of the best ways that we can all make sure that we succeed greatis by running businesses, running businesses we can be proud of that understand all the stakeholders that are at play, consumers, neighbors, the communities that , investors,he media etc. how you manage that will be just an incredible challenge and opportunity for this industry. it's not every day that a new industry just get started out of nowhere -- not that this is a new industry but a new, legal industry. an opportunity to build something that's different. not just a new industry that a new kind of industry -- but a new kind. that ouristake

continued freedom of cannabis issumers around the world dependent upon how we do business. they are watching. you know, it's only a small percentage of the population that consumes cannabis. we need the support of lots of non-cannabis consumers and may be people who don't even like it but are opposed that understand prohibition does not work. marketing, when it comes to labeling, when it comes to our ecological foot rent as an industry, these are need to make sure we are paying attention to in the frenzy or the green rush that occurring.

just out of curiosity, i'm curious who's here. how many people currently operate a licensed dispensary, cultivation, or infused product manufacturer? great. how many people hope to do one of those things? great. how many people here currently run an ancillary business in this sector? how many people hope to be doing it? great. how many people here think you will be raising capital for your business over the next year? or hoping to raise capital? lookingmany people are to invest in a business other than your own this year? great. thanks. it's just good to get a sense of who's here.

i also like to say that money is one of those things that can really galvanize these people. you are here mainly for money, that's great. i think a lot of people come to only because of the economic opportunity but that is not what keeps them. them are the people, change we arehe making, the pie in nearing spirit we are building. this is different. your businesses are not like other businesses. i think it's going to be an interesting ride as we look at our different motivations for sector.volved in this

we learned that if you want something done in this world, you have to figure out how to make it profitable. let's just say hippies keep being right. they were right about renewable energy. we were right about organic foods. we are right about cannabis. look at renewable energy and organic food. becausevements started people cared about something. they cared about the environment. they wanted to use renewables. they cared about the health of farms, the land, what we put in our bodies. it started out really small with a knack the best sort of flavor. but once they figured out how to have profitable business models around those ideas -- boom. now organic foods are everywhere. renewable energy is growing by leaps and leaps and bounds.

i think that's what the cannabis energy -- industry is doing for freedom. every time we show communities thatcan raise tax revenue, they can have businesses that provide benefits to their communities and investors can see this as a viable investment opportunity and entrepreneurs see this is a viable business opportunity, that moves things. has been kept in place in partial part because of the profit being made by the people who make money off of depriving people of liberty. when you start a business where is outcome of your business that people are more free as a

result of your business, that's a very powerful, powerful act so thank you. sorry. i lost my train of thought. i want to talk a little bit about how i got here. as i'm doing that, if you can start thinking little bit about how you got here, then we will compare notes. thisay i got my start in industry-movement, i was a senior in high school and some of my friends played a trick on me. i was consuming cannabis for the first time and i was always the paranoid one in the group, the friend like -- no, let's not do that. i was the one that was always

nervous about these types of things. they played a trick and they had a security guard come and put me in the car. they came in and they were laughing. they put their hand on the receiver. this is back when you had to pu sh the button down to turn the phone off. at that moment, it hit me in my corner. -- i realized i could not believe people were punished for this. that they wereow building an activist that day. here's the thing. for millions of people around the world, it's not a joke. it's not a joke. people are sitting in prison right now while we are here thinking about how to make money. we really owe it to them to make sure we do this right. to really make sure that we

build the right kind of industry. in 2010, i was the lead fundraiser for the marijuana policy project. i was raising money from high net worth individuals who were donating to change the laws and also high net worth people working in this industry in the dispensaries and such in california. what i realized is that these two groups of people needed to know each other. a lot of people were just donating to change the law. they were not thinking about business opportunities but many had money to donate because they have been successful in other businesses. there were all these entrepreneurs who had great ideas and wanted to expand their businesses and wanted to do sector.n this they did not know the investors. did not know how to scale a

business or put together business plans with financials and all this other stuff. every lies the one day i was like -- wait, these people need to know each other. i realized i could raise a whole lot more money as a peer. i set down with steve deangelo who runs harborside health center and he saw the same thing. he had all of these people coming to him with different is this ideas. he had no way to invent the ideas and nothing for them to invest in. there's something here, but i already have a job. i brought him this idea in late 2009 and he immediately saw it. if you want to figure out what's going to happen next, figure out what steve deangelo is doing now. just an incredible

visionary for decades pioneering much of what we see today. think he's crazy for doing it but then a few years later they are like -- aha. steve have the right idea. that was a real great affirmation for my idea because he was willing to become our first investor. we started this view then with the idea that the development of a responsible, politically cannabis industry would lead to a day when not a single adult is punished for this plant. couple things. probably the most notable is our investor network. meeting yesterday at the denver center for the performing arts. we had over 250 accredited

investors and doesn't companies pitching them. how many people were there? are upressed that you this early and i'm so sorry you had to hear me talk so much over the last two days. [laughter] great. over the last year, we've seen $12 million invested in a little over a dozen companies from these folks. remarkable to see how it's been growing in the new waves of people who are getting involved. the thing about being here in colorado is that there is this sphere we don't talk about. when we talk about the punishments, we tend to focus on the people who are caught and punished. challenge igreater all of the people who live in ,ear about being themselves

like feeling they need to keep ink from their family members and these sorts of things. get whenom that people they walk into a store -- i heard a friend tell me a story that they locked into a store here in denver and went up to the counter and the pe, do you consume cannabis? um, yes. [laughter] they are like, great. do you prefer -- >> that moment of randomly telling a stranger that you consume cannabis is a powerfully liberating act. the fear and society that pervades millions and millions of cannabis consumers we get to solve. i think one of the reasons we are seeing so much excitement about the market here is because in a lot of ways, they are not just dying cannabis. they are buying a taste of freedom.

it's a really amazing opportunity to be involved in this. story about how i got here and i wanted to check in with yours. close your eyes for a quick second. think about the first time you knew cannabis existed. think about the first time you knew someone had consumed it. inc. about the first time you realize that people were punished for this. about the first time you realized that was wrong. about the time when you realized someone benefited medically from cannabis. think about the first time you realized there was a business opportunity in this. the answer to all these questions leading up is, in many ways, how i imagine you got

here. i encourage as you meet people over the next few days that there is a thing that we do at business conferences. we shake people's hands and give the elevator pitch. you can have the exact same conversation 400 times, but it does not have to be that way. out whyactually find behind what people do and it just gets so much richer. i think there's going to be a lot of really exciting opportunities. i think the rays a huge agricultural explosion. we will see a lot of the knology coming out where cannabis will be leading the way. no one of senses over a plant like cannabis consumers and cultivators. we have underground botanists meeting up at the top plant

engineers in the world than i think what they are going to create will just be awesome. i think we are going to see a lot more in leafly. we'll start seeing acquisitions in a lot of these ancillary businesses where there are companies that are very similar but in a non-cannabis space. i think we're going to start realg a lot more the first acquisition of companies probably in the next few years and the most likely place that's beng to happen is going to the media space because it is the most protect it in the most easy to build them. i think that's what we are going to start seeing first. does a lot of money at the table right now and it's looking to find a waste. it's such a nascent energy -- industry. many ways, it's too

nascent. the money to build this industry is here. it's just a matter of figuring out which steps we need to go through. really it's going to be interesting to see what happens over the next couple of years as it rolls out. i'm going to be on a panel -- actually, my colleague will be speaking at one about the art report. arcview we found there is a 1.5 billion dollar industry in 2013 growing $2.8 billion.

that is 68% growth. find me another industry growing at that clip. find me another industry that does not have a single player at more than $100 million. her business. this is a rare opportunity for startups and small businesses to take a run at this before really big is mrs. start to come in. fascinating. be one thing you'll hear a lot about today and tomorrow in conversations is about the professionalizing of the industry. it's great. we need to professionalize this industry. challenge thatof notion a little bit. i agree. we want to professionalize the industry.

yourt depends on what definition of "professional" is. if professional is what people wear, where they went to college, where their last job was, sure. that can play a role. means me, professional you do what you say you are going to do, you honor the key stakeholders including the businesses in the community. and you treat people with respect to matter how long their hair is. some of the most professional people i've ever had the pleasure of working with did not look typically professional. some of the least professional people i've ever worked with have looked like we normally think of when we think of professionals. i encourage everybody to open up the concept of what that means

so that we can make sure we are building something that can be a new kind of industry that really embraces and we don't lose the lessons of this plant and the importance of the creativity that so many people discover through it as well. you know what? i got this message from steve deangelo last night and i wondered high was going to close this out. as i was trying to figure out how to close it out, i read his message and i thought since this was supposed to be his speech, why don't i read what he wrote to me enclosing? i think it's shockingly fitting. i will read that now and then we will close. fellowmy friends, entrepreneurs, and investors. i would like to thank troy for filling in for my speaking spot.

i would like to salute the voters, activists, and the cannabis community for their successful effort to create the first full access adult use market. may many more states follow your good example and soon. a sudden flu has robbed me of the ability to present with you in the room today, but i've prepared a brief summary of the talk i was going to give, the cannabis industry as a social justice movement. it really could not be anything else given the inherent qualities of the plant and everything to do with the people using it. the very first law prohibiting cannabis was passed in california in 1913 followed shortly thereafter by border states. those laws were passed as a racist reaction to the first great wave of mexican immigrants fleeing the brutal battles of

the resolution. this was just the beginning of a long, tragic beginning targeting racial minorities and other marginalized people. it was those early laws and the myths that propelled them inspiring the theme of william randolph hearst national propaganda campaign. once they produced the desired result of federal prohibition, some of the very first enforcement targets were black musicians. others were harlem that welcomed all races at a time when few if in a graded. the decadence of hollywood was also targeted resulting in the arrest of robert mitchum and others. actedjazz-loving beatniks up from african-american museums and passed it on to the hippies, cannabis laws provided cops of the great reason to hassle anyone with the wrong kind of clothes or hair cut.

started in 1913 has grown into a monster. 2001, 12 million americans have been arrested on cannabis charges. african-americans have an arrested at a rate four times greater that than white people. imprisoned aw larger percentage of its population than any other including north korea and the majority of those arrested will suffer a lifetime of other damaging consequences including losses of employment, housing, various professional licenses. equal or even more serious social issue is the denial of the effective medicine to people whose lives depend on it. for many years, we believed cannabis was just eight pallet of medicine. now we know that it may have -- was just a pallitive medicine. it could affect arkansas is,

alzheimer's. providings them from that help. anyone who has looked into the eyes of a mother whose child depends on cannabis will understand this instantly and we've not even talked about the tens or hundreds of billions of dollars wasted on cannabis enforcement or handed over to gangs and cartels which has been a force of robbery, a social injustice passed on every american where the hundreds of people killed by police in the the enforcement or those killed by gangs and cartels. our work to dismantle this engine of justice is bearing theyfruit everyday as remove criminal penalties and create new markets, each business will reclaim a portion of the dollars stolen by prohibition. as we build our success, let's remember that our industry was

burdened by a movement for social justice and we are dealing with many decades of struggles to deal with the laws and our future is inextricably bound with the cannabis policy reform movement. we must pass new laws if we are to gain new markets and the in other states and countries will not happen unless we find them and push them forward. i encourage you to embrace the future of our industry as a social justice movement. rarely have investors and atrepreneurs been handed such completely underserved market. take advantage of the unique opportunity we have built for our families and justice in our society. i would be disappointed if all we did was create another successful moneymaking industry. pioneers the early have the skill, dedication, hard, vision to do much more. i hope when we look back 20, 30,

40 years from now we can proudly say it is a new kind of industry with an ongoing commitment to social justice, and industry to set a new standard for others to live up to, and industry with an congress. an industry that values doing good as much as creating wealth. it will not work unless we do it all together. then make that commitment when we do gather in that room 30 or 40 years from now and we are congratulating each other on our success and wealth, we will be able to look in each other's the mostclaim valuable reward life has to offer any of us, the knowledge we left this world a little better than we found it. [applause]

thank you, steve deangelo. thank you. i look forward to building the next great american industry with you. have a great conference. [applause] >> thank you, troy. can i ask our panelists to come up to the stage for the next round. introduce theto of the campaign and a longtime advocate for marijuana law reform in colorado. brian was the first chair of the it was inand i think this building three-and-a-half years ago that we founded ncia.

2010, he was there from the beginning almost member number one if we had a numbering system back then. it's an honor and privilege to introduce mr. brian vicente. [applause] >> thanks a lot. it's really great to be here. it really gives me great pride. when we started the organization, i think there were 10 of us or so and i feel like any time i see his staff, i swell with pride when they say 50ey are up to 500, 500 th dues-paying members -- the dea drug dog is on to us. [laughter] there's a party going on wednesday at my law firm. it's a fundraiser for the united

for care campaign. that is the measure on the ballot this november in florida. i really hope we can win that. let's give them a round of applause. let's do it, florida. [applause] briefingave an insider about how the campaign is going. 10s only about five or minute walk from the convention here. please, head on down. i missed going to give a couple of very brief comments at the beginning then we will turn over to our wonderful speakers. it's profound that we are here in colorado at this moment. not many people are aware of this but when marijuana became illegal of the federal level, the first person arrested under that federal law was a man named samuel caldwell here in colorado. it's phenomenal that colorado began the war on america on and he went to jail for three years for smalltime distribution.

now it's really kind of the of where marijuana legalization and commerce is going. was very involved in the campaign to legalize marijuana that passed here in 2012 and i'm happy to report it to been very successful in terms of how the implementation has been going. it's been about six months since we have the commercial system in fore that you currently see legal recreational marijuana. of data onve tons how things are going, usage rates but it's important to keep in ion teen usage, driving. the state has been good at tracking tax revenue. i think it's worth pausing on for a moment because it was just going into the hands of the underground market and cartels.

using $25 million and we've already set that aside for things like treatment, prevention, youth education on marijuana. that is from the sale and now going into these positive things in our state. we produced over 10,000 direct jobs in this industry. 10,000. many of them get health care. there's thousands of indirect jobs. all we do is marijuana law. there have been tons of job creation driven by these laws. besides that, we set aside about $10 million from the state medical marijuana program. in ours of people country really use medical legally, but the

research has not always been there. we are setting aside a significant amount of money to fund actual research and see the positive is going on with medical marijuana. point out one or a two other things. i wanted to apologize in advance because my wife is 40 weeks pregnant. today is due date. i have my phone here at the ready. let's give her a round of applause. [laughter] send the positive mojo. if i need to run out, one of my capable staff members will pop up. i think i should be ncia supporter of the year but it's profound that we will have children that are born into a marijuanae marana -- prohibition is a thing of the past. to me, it's amazing. [applause]

my daughter will grow up thinking it does not make any sense. it's like alcohol prohibition. we look back and it's nonsense how many people's lives were destroyed. it's almost impossible to count. this is a new dawn and him excited to be here -- i'm excited. we will talk about about the challenges as well as the positive vast active legalization and their particular states. in case you were thinking of speaking out, you should not. at the very end of when the gentleman speak i will ask them a tough question. is there a nexus tension threat to legalization? existentiala nexus tn threat? will the pendulum swing back to prohibition? a lot of us are taking this for granted. we are going to be winning more,

blah blah. i think there are some real threats out there. how potentially do we address those? i think i'm going to start with washington, if that's ok with you? our firstroduce speaker, john davis. he's the founder of the northwest patient resource center, a dispensary in seattle. forlso has been involved years with an event i'm blown away by every time i attend, seattle hempfest. events ando a lot of seattle's is by far the most excellent marijuana event i've ever been to. hundreds of thousands of people. he's been involved in that since 1994. a projectworking on with the former president of mexico, resident -- president relation.x -- no

with that, let's give a round of applause to john davis. [applause] >> thank you. come here and speak. the title is colorado and washington, success and challenges from the frontier of post-prohibition america. post-prohibition, i think it's a little soon to be using this type of words. in thinking about this, i decided to lead with the successes we've had in washington. overall, the most important success we've had in washington, also in colorado, the psychological effect of simply passing legalization initiatives. no one at the time knew what that meant, if the federal government was going to respect .t

building was a vote in was the most important event that happened in this industry since california legalized medical marijuana in 1996. it sort of forced the government hand. are in states now violation of the single convention treaty. treaty allowsnal for medical and for research if you read the treaty. this is recreational. this is the first time this has happened and no one really knew how everyone was going to react. governmentseems the -- the federal government -- is willing to allow it to happen.

parts of the government are not the notion ofrall legalization, which is being called the great experiment, .ill be allowed to continue since legalization, the vote on legalization which, in washington, is still a little theoretical,cal -- it has jumped between 10% and 15% for those in favor of legalization but now the polling numbers being around 56% to 58% of the entire country including wantingople in oklahoma out right legalization and over two thirds of those people in our nation one thing some form of legalization including medical. conversation is not just

happening here. the conversation, just a cousin of the initiative's passing has been spread throughout the world. last week, they just had a special in australia that was of australia.nc. there are so many of these other countries looking at us saying -- wait a second. the united states put this on us and now they are going away from it. the conversation is happening south of the border. a lot of people don't know that the drug war really impacts south of the border. if you look at the usage rates of mexicans, of drugs am a they have appear than we in the united states. the united states is one of the ont drug using countries earth. mexico does not have a drug problem.

they have a border problem. they are on the border with a country that has a very -- that is a very large drug consumer. a lot of people don't realize direct confirmed casualties from the war on drugs since 1996. --0 of those confirmed children. we have journalists that are kidnapped and killed. we have truckloads of beheaded corpses dumped on the side of the road but that's down there. we don't think of this as a true war because people are not dying here. the cartels know if you turn up bodies on this side of the border there will be problems. down there, apparently they don't care so much. we heard this claim before for years that it will never be

allowed to happen. now we can pretty much put that behind us. now we can look at the other states. at thecan start to look path forward, what these votes did especially in the case of washington is create a framework, a scaffolding in which we can build on. what's been done in washington and colorado is not perfect, but i've been working on drug policy for a couple of decades now and i've yet to see the perfect legislation. basically what has always happened is we have taken the small baby steps and shored up our position and taken the next step. steps isof those next faltering. it's not perfect. we take it up in the next legislative cycle. also what's been a success in washington is the legalization

to force theing localities in washington to actually take this seriously and what it's going to take for zoning, what it will take for occupancy in usage. a lot of people don't realize just how important for businesses the localities are. they think it's legal, problem solved. no, you still need to get into your localities. this has been forcing the hand and now they are beginning to figure out just how they will issue the building permit for the large-scale productio of a schedule one substance. that brings us to the end of washington successes, unfortunately. [laughter] washington has a lot of problems. know, colorado is passing around a brochure where you can go within one mile and find some

recreational cannabis. that's not the case from washington yet. washington has done some things very differently. for people in various states, i think it's really important for you to look at what happened in colorado, washington, and even in florida. as you are going to the next , you of changing your laws can learn from mistakes that are made. we will get over these mistakes. smallust a process, a baby step forward. challenges. washington, when it was legalized dan kicked to the liquor control board and there it a lot of talk about what would look like, this notion of legalization, they did not want

to think about it from a business perspective. at the time, it is big ad business. they are going to advertise to isr children and business just a bad. understandable. when the industry reached out to the liquor control board and the powers that be, there were a lot of people in the community, what one of my colleagues calls, whack-tivists. they're very passionate but politically naïve people in the medical community typically. positivelyengaging with the process with the liquor they started

accusing them of things and a number of other things, being a real pain, shouting, not really having a message. that really turned the liquor control board off. they went to the academics and said, how do you do this? academics are not engaged in the business of cannabis. it's a tricky one. there's a lot to know in the business in order to keep your supply line right, in order to keep you on the right side of taxation. was to wait with what they called mom and pops. they did not want to have any capital requirements. they did not want to require any experience.

they did not want vertical integration. the initiative forbids it. if we are on the retail side, we cannot grow our own. they did not want to necessarily give medical which does not have the same amount of regulation in washington as it did in colorado a path to legalization. they ended up the property that was a sham, meaningless. people do not have to be tied to property. they could have listed kentucky fine.chicken saying it's the distance relationship is fine and they could change it later. then they ended up limiting the number of licenses per entity. aree are not inc. that

likely to laura investment into a market. you are trying to keep three stores and you have all of these other challenges. it has made it a lot more difficult. growers where the 3's could have three tier were they reduced the square footage and said you could only have one. they've taken a business and secured these facilities. they are holding high overhead and then you are playing against someone who has no overhead, no experience. waitse commonality was it if you can game the system. why would you not want to have money to help build your

infrastructure. it just makes it more difficult. .hen the liquor control board they have consistently changed the interpretation of the rules. existing industry has had some sway but they decided they will take more of an academic approach. let thecolorado existing medical go over. they were a lot further along with their localities and building permits. ofy had to create 70% everything they sold out of the retail stores so they had to get the building permits in place and they had that ready to go. that's why you saw colorado somelly roll out with product first. i cannot stress enough the locality role in implementation.

in washington state, we are still in the process of going to the individual localities and working with them to get some sort of zoning, occupancy, and some sort of way to get building permits. with all of the bureaucracies. you have clean air, solid waste, fire, water, labor, department of agriculture. a process with those people. they are nervous about standing out on the branch alone. they have to be worked with in order to figure out solid waste -- was is it -- what is it? can we put it on a train? can we treat it like any solid waste? is it hazardous? those questions are still being answered in washington. then you have the other factors. contrary to federal law, banks

won't work with cannabis industry not even on the ancillary, not yet. e areax challenges with 280 immense. i'm still wondering how we are going to -- how retailers are going to manage to file compliance and not go broke. we've achieved a lot. what we have to do in washington to let the system turned on july 1 and we will have to show a little failure. we are going to have to let the the system is not perfect. we are going to come back in and we will figure out what works, what doesn't, and we are going to make some changes. this is an ongoing process, as

my good friend vivian says, the legalization is not an event but a process. thank you very much. [applause] >> that was a really great overview. we will turn it over to our other panelist from washington state then focus on our colorado panelists. i wanted to focus on banking and the tax issues. those are two of the ork.erstones of ncia's we there's a panel tomorrow with steve i'm going to turn things over to her neck speaker from washington state. fromr next speaker washington state. i got to know him eight years ago when he was really doing some groundbreaking work with the king county bar association.

as a young aspiring attorney, i noticed you were pretty not position a year -- putting out papers saying the war on drugs was a failure. i got the bar association -- is my great pleasure to turn things over to roger. >> let me stand up so i can see you guys better. it is a pleasure to be back here in denver. working with brian. the time has flown by. i kind of have to pinch myself. you don't see a lot of tie-dye people.tailed reggae

i used to be the oldest person in the audience and i am not anymore. i think what i want to do is give you an update on some of the details of what is going on in washington state. i becamereform work, notorious in my area. a seat became open in the state legislature. iran and they hit me hard. they use the keywords. roger goodman is a lawyer crusading to legalize drugs. my poll numbers shot up afterwards. cultural find. i was fighting for the truth and had the courage to talk about this as a politician. people were saying, you are saying this?

i begged me opponents to hit me on the drug issue. it always backfires on them. if they say i raise taxes, that is different and i am vulnerable. but now, i find myself as the chair of the public safety committee in the state house of representatives. which used to have jurisdiction over cannabis. but it is legal now. i don't even have jurisdiction over the substance i helped to legalize. i also practice law and service cannabis businesses in washington state. -- johnn inside view davis is a pioneer. he is talking about the acceptance of the initiative.

all the soccer moms and sure to opposed the initiative said, let's do it. they are excepting it and acknowledging it. he even embracing it. despite bumps in the road, we are developing a regular us -- rigorous regulatory system that is going to satisfy public opinion. to answer brian's provocative question, i don't think so. it is a little bit of a surprise that -- it looked like we were going to happen back in the late 70's. boy did it whiplash against us. i was with jimmy carter not long ago in atlanta. at lengthth length -- with him about his position on marijuana. he does not believe it should be legalized.

marketedes it will be to children and is a dangerous substance. almost all his family members have died from lung cancer related to tobacco. opposed togly cannabis legalization. and is in favor of deke revelation. -- decriminalization. i said, don't you want to get rid of the criminal enterprises? i kind of stumped him. to let you know, jimmy carter was never in favor of legalization. a.b. it is not a surprise that we did not make it happen way back when. now, the dam has burst. is sitting here. we are unstoppable. if you put your finger to the wind, you see public opinion continuing to go in the same direction. i compare same gender relationships with cannabis

legalization. there is still a ceiling, a ceiling acceptability on same gender relationships. some people are still grossed out by it. when you talk about cannabis, it is a plant. the rapid cultural change and aceptance of cannabis as pipette ought to be regulated is gaining acceptance. i don't because going to go back. we are there. this is a good example of what is called to continuous change. nothing happens, nothing happens, and then the berlin wall falls. for us, colorado and washington, the beeler wall -- the berlin wall has fallen. in 2019, hillary

will have to bring down the wall the federal prohibition. five more years of federal prohibition is my prediction. the liquor control board, which we will rename the liquor and , but is doing the best a job they can. they are used to bottles of vodka out. they are not used to an agricultural product. they are learning along the way. sometimes behaving like bureaucrats. hindering the development of the market. here, and wehase are letting colorado run interference for us to see what lessons you are learning him a we are right behind you. the first retail shop should be opening in the first couple of weeks of july. we are penetrating the market slowly. a statewideeady had

uniform regulatory system for medical cannabis. we did not. we had a patchwork of local control, a quasilegal -- we have an initiative on the books. but the medical system is quasilegal. we have to invent something new, which is what we are doing. and then find a way to align medical cannabis with the full access market. use, and i am about to say, recreational as a word. it diminishes the use of cannabis. i don't go out for recreational beer. tobacco,you who use you don't go out for a recreational cigarette. i would encourage you not to use that word. word forngelo use the access market. general adult use. i try to use those words. there is medical cannabis and there is general adult use cannabis. word.t to use that it comes across as something

less than what it should be. we are now licensing to millions hang pete of canopy -- to million square feet of canopy. those 2 million square feet are estimated to satisfy about 15% of the demand. only 15%. we are just getting started. 25% of the demand in washington state is people under the age of 21. there will always be in on regulated market for those under 21. 50% iser 75%, unregulated. 25% is medical. we are starting to undercut the unregulated market.

it is a high-risk venture. for anyone who wants to get into business, as john was saying, it is unpredictable with the bureaucrats are doing. you are paying rent. you don't have a license. the liquor board changes the rules and you have to wait longer. for those getting into this, you need the resources. otherwise -- and quite a number of applicants have withdrawn because they found the do not have the resources. the challenges are banking. we have one credit union in the state that is willing to provide merchant services. i am actually working on a deal where retailers and maybe other sectors of the market would join an association. would, yet to be named, service the association rather than individual businesses. huge.e bank issue is

i'd rather answer questions about what is going on with washington then talk at you. we are moving in the right direction. bumps in the road. in terms of medical, we will be a few medical retail, but it will be general use. i am concerned about truly medically needy individuals who need a lot and might not be served by the market. i want to make sure we provide for the truly medically needy who consume a lot. they probably ingest. you need a lot of material. that is my major concern. and then locals. one big difference between colorado and washington is we do not have arguably a local opt out.

has saidney general locals can opt out come of it that will be litigated. i'm in favor of revenue serine -- sharing. ideologically opposed so much as they want a cut. revenueto provide local to make it a statewide market. it is a pleasure to be here. thank you. [applause] >> thanks, roger. electedl to have officials here. we will shift and talk about colorado. i want to remind folks, we will have an open q&a. then we will have questions from the audience is. if you have earning questions, please hang onto them. i will have ugly it speak. -- elliot speak.

he is the ceo and cofounder of a prominent medical marijuana and adult use dispensary. they have a reputation for being top of the class. incomes from a background oil and gas as well as agriculture. with that, i will turn it to him. and him a round of applause. -- give him a round of applause. [applause] >> thank you for the glowing review. challenges toand me seem to overlap in this industry. the things that have made us successful in colorado are also the biggest challenges going forward. it.prior panelists covered the cliché is all politics are local. in this industry, we are the political face of the commercial

side of the movement as well as, for the patients and people who have helped create this opportunity. here in colorado, we have seen regular change from both legislative and revelatory sides. every three months, once things the first law passed for the constitutional change. which open the door for the opportunity. we existed as a caregiver model. it was all still kind of four line underground. -- borderline underground. in 2008 elections happened, you saw a lot more people become openly advertising they are running a commercial style caregiver business. that triggered the city of denver to make the first move to push us into a regulated retail

outlet and production model. the buildingime, departments did not know what to do. these have existed outside of traditional building codes and requirements. that level overexposure to the regulatory bodies for the marijuana industry is what is defining the go forward path. we are regulatory management companies in colorado. we produce a product and sell it. we have to manage and provide data to the regulatory bodies to give comfort to the federal government that we are couple sharing the eight old points on their memo. points on their memo. the politics are local.

regulatory agencies are the ones answering to the federal government saying we are doing our best to prevent child consumption. that is where the biggest foot dragging will come from. the bureaucracies will not want to readily assume the burden for playing interference with the federal government. say, butig request to these guys produce a schedule the middle ofin what the federal government considers active prohibition. know who youru to local entities are so you can have comfort with them that your investments and opportunities are going to be stable. you are making good business decisions. have learnedo, we once the rules get rolling, plan 43-6 month ago mental changes.

3-6 month changes. caught sudden you can be buying something that is not available. my answer to the challenge of what could derail this, if we don't develop good business to government relations, we will slow ourselves down. there is probably no going back, but it is our turn to show we can run a business and work with the government. the government is already there. you are trying to become a business. you need their permission to do so. theare going to have to -- activism is important, but the business relationship is where we are making the changes.

have alwaysouse sought to have a strong relationship with our city. that's the person that inspects you. that tells you yes or no. you can be upset that there is a regulatory body we can figure out how to beat participatory. participatory. the rules change any taxes are high, but here we are doing it. it is going to change. be prepared for change continuously. [applause] >> think so much, elliott. much, elliott.

his brief background, he is a harvard law graduate. he was the chief of staff for the lieutenant governor of colorado. theit is the -- is first-ever director for marijuana coronation for the state. let me talk about -- i will let him talk about challenges and successes from his vantage point. give a hand to andrew. [applause] >> thank you. it is a pleasure to be here. i want to thank everyone. they are big thought leaders in colorado, not only for the amendment, but for the people you see -- to see around corners. they are seeing the challenges they will have in the future.

it is that kind of thought process and partners that make me want to come here today. my hope is we are will be -- is that we will be cultivating that spirit. i'm the governor posture of marijuana ordination. -- co ordination. which is a title my law school friends are jealous of. with theas less to do debate over marijuana legalization and more to do with , we can have the debate is much as we want. i tend to not injure into that debate. the other thing we have to do is implement the system -- a system no one has incremented without federal oversight. we are in a new territory which requires a lot of government work. i consider my role to be a good government role. it has little to do with marijuana and more to do with the kind of business relationships and forward thinking relationships that can

get us to a place where we have equitable and fair regulatory systems that protect our youth. protect public safety and public health. these are the kinds of conversations we will have to have. what will not straddle the industry but work here. it is going to be an ongoing conversation because we have never done this before. not done thiswe for marijuana but we have never regulated and industry just on the state level without also being a federal conversation. what have we done well? i would say the amendment 64 tax ta to put together hundreds of people working onsk force all the places that needed to be regular. business interest mixed with people who are marijuana proponents. and opponents. also legal, public safety people, public health people.

saying, what do we need to do? of packages kind that says, here you go, here are the bare-bones. we were ablefor -- to go on january 1. i think that is the biggest miracle so far. the skeleton of that thing and what allowed for a lot of people to calm down, including the federal government, is we had in inventory tracking system that was ready to go on day one to read -- day one. single cloneevery all the way to maturity into the point-of-sale -- and to the sale.ioof becomes soation important.

that was a skeleton. the department of revenue work on that is the home run hit we have had so far. everything we do on the regulatory basis is built off that model. the other thing that i would say we continue to do, will we monitor anecdotes and data, we are hypervigilant at trying to get on top of things. we don't want things to escalate out of control and have to come back to them. we do it in a way that we are reaching out to industry. health.d people, public we are doing a good job of not being overly reactionary. coming up with smart solutions. the edible task force is a good way of showing it. we see anecdotes and things going wrong. we are hearing a lot about out-of-state users overindulging. everybody is working together.

how are we doing? the sky has not fallen. that is the most we will ever be able to say at this point. i caution both sites. i get a lot of, this is the worst thing that is ever happened. there is no data to to support that. another 5-10 years to work out the exact impact with public health and education. with that being said, we have not seen an increase in crime or usage. the world has not ended. data we want to get ahold of. moving atng that and a speed unseen before. we have brought in about $80

million -- $18 million in revenue through april. ththe ballpark of where we ought we would be. there have been thousands of jobs created. we are working on taking initial data. i'm going to end with, because i want us to get to questions, we are working on edible's. there has been a task force put together with representatives from industry and public health. the concerned citizens. is, how do weise try to prevent accidental ingestion by young people. the second is, how do we make it taking in my knee consumer without any sort of

cultural or public education about it. how do we make it intuitive when they are having one serving? so they should know how much they are eating, anybody -- absent anybody telling how much they said split it? his emergencyee rulemaking that says, a serving therehould line up -- should be a demarcation or stamp or physical product separation. on baking, we are concerned. i am jealous of washi6gton having a credit union. that is not something we have had yet in colorado. i think we have been working with washington state and the goernor on trying to together to find a federal solution. every other solution will be on shaky territory. that is what bankers are saying. we will do what we can. we passed a bill last session that allows for the formation of

basically a credit union style co-op that can go straight to the federal reserve and ask for access without having to get insurance, which is a roadblock. credit unions for to create marijuana only credit unions. any solution is a good union to us -- solution to us. are workinging we hard on is use prevention. months, i hope we will come out with our youth prevention campaign. it will not be about the legalization debate. it will be about teenage use. we will be working closely with the industry. i think everyone can understand one of the things that would really stop legalization in its tracks is if we see a dramatic increase in youth use. that is not to say that is where we see the data is going, but

it's up to us to make sure it stays out of the hands of people under 21. this is an incredibly fascinating field day today. thank you for having me here. [applause] >> think so much, andrew. e governor to see th takes a thoughtful and collaborative approach. we did not see eye to eye. he campaigned against us. now that the voters endorsed it, it is nice to see we can have a conversation. two quick one or questions. we have many good questions from the audience. i want to hit on what we talked about in the beginning. i will ask each speaker to briefly address this. is there an exit stencil threat to legalization? is there a policy issue you are seeing related to this?

how can we grapple with it? let's maybe jump -- andrew, are you prepared? >> can you talk about what you mean by the existential threat. >> the fact that it has only been legal for 18 months. chance that marijuana, the pendulum will swing back and legalization will be overturned? if so, what is the issue that would make that happen? is it edibles, labeling, banking? business to government relations not being good enough? job, myecond i got this book,iend picked up the smoke signals. it a history of the legalization effort. i will always say yes.

there is a complete chance that a year from now, everybody says that was nice but that is done. that is a politics question. i don't have a good read on where the politics will go nationally. i would say, the shaking as we we have iskiness tied up in banking. as the last bastion. that is where i see the most the various influences coming in. -- nefarious influences coming in. if we can do this as far as -- that is great. if it becomes a big money laundering operation, i think there is a whole separate ground for sharing this thing down. do you have any thoughts? >> the machine that is

prohibition did not just go away. there are people that make money off this. industries that rely on this. there are areas of the country where the law enforcement really sees marijuana as a tool to get away with a lot. there are a lot of people invested in the status quo. the pendulum is clearly swinging in the direction of legalization, but if you don't think those people on the other side are going to try, no matter what happens, spin it as failure, you are wrong. they will spin it as failure. what can we do to help them? we can be lexa days ago about our mix -- lacksadasical about arm exiting -- our messaging. irr responsible --

esponsible. the baking is a challenge. a lot of people are working in an all cash environment. for those who were here for the keynote, the words that were written by steve d angelo about industry needing to have a soul and social conscience, that is because it is the right thing to do. but also because the downside risk in this industry is not just losing your investment money. it is federal prison. [laughter] clients,er i said with i am obligated to say, what you are doing is an unambiguous

violation of federal law. we smile and move on. but i would not be a competent lawyer if i did not warn them every time. swung sharply from the 1970's to the 1980's. there's a major distinction today. since the 1980's, 30 years, the grassroots have taken hold. the people have been heard. constitutional, in colorado, framework has been established. it was not just cultural and personal references. we have established an infrastructure that is going to be very difficult to dismantle. it is also based on rationality, which is not necessarily what drives politics. i do not think we are going back. we will have bumps in the road for economic reasons. reasons of public safety. reduced alcohol consumption, duis.

teens reporting it is harder to get. teen use down, from what i understand in colorado. we will have some incidences. the rapid response on the edible issue is a good example of addressing an issue. it if the industry is not responsible, you will so your sow your own demise. i have been encouraging cannabis to distinguish themselves from tobacco and alcohol and not market to children. [indiscernible]

safety ishealth and our job as an industry to prove we can do it before the regime and we get into the next wave of legislative battles. i have a bunch of excellent questions. i would add my two cents on the existential issue. the edible issue is a tough one. as someone who wrote the legalization measure and codirected the campaign, we did not see be edible is she --

industry leading to the high-profile incidents. people eating a cookie this big and has 10 doses and they do not realize it. really bringing a thoughtful dialogue that perhaps airs on the side of overregulation, if we want to have a long-term sustainable industry, we have to look at how this looks right now. in terms of how to keep your business option name, -- functioning, the guidance on this industry from the federal government laid out eight things. always taking the time to look back at that. we did have an audience member share their thoughts on whether there is an x essential thought -- whether there is an

existential thought. the individual says, i am concerned about these cannabis businesses going public. a lot of them have had stock trade orders by the sec. you seem to be scams that are fleecing investors -- there seem to be scams that are fleecing investors. tomorrow, there is a panel on the sort of going public. how public company can operate. the check that out tomorrow. check that out tomorrow. will have toes legalize cannabis in some form for the federal government to start to act? basically, what is your prediction on how soon we see action on the federal level? we will start with andrew. >> i have no great insight into

this. pass, except last name.ked for my freedman. >> i think there is going to be serious discussion about it in 2016. 016 is the lip -- the world convenes and discusses her national treaties. -- international treaty. the federal government can't just say, yeah, washington and colorado are behind you. it is a validation of treaty. it has to be handled on an international level. you are going to see become position start their and hopefully will make some progress. my prediction is, it doesn't matter how me states.

it is about the treaty. >> i will stick with my seat of the pants prediction that five years from now the federal law of prohibition will come down. i can't believe it is possible. but look at where we are now. there is no movement in congress, so it will be up to the executive. the executive does have the power to reschedule and introduce enough policy initiatives so the controlled substances act becomes meaningless. >> it is anybody's guess. i wouldn't want to say the power is where you want to follow. the people with the votes, they are the people that will make the shift. my vote is new york and florida will make it happen. i i would note, too --

apologize if i don't get to your question. onre is a panel tomorrow which states are primed to legalize or move forward with medical marijuana. two-minute -- do not miss that panel. a couple of washington specific questions. changes do you hope to see in the 2015 washington legislative session? >> i actually killed a bill at the end of the last session which was not going to serve patients well. which is premature. amending both initiatives in the next session. the medical marijuana initiative, which was enacted in 1998, and initiative 502. aligning them so patients will

be able to -- they will probably have a state card that will allow them to purchase significantly more than a general adult use consumer. retail outlets will need special training if they are going to be providing to medical. just trying to think of some of the others -- trying to accommodate those who are medically needy. as far as the general use market, there are little tweaks as far as giving liquor control board. but in general, the system isn't laced. we are watching it roll out. but in general, the system is in place. we will watch it roll out. >> we will need to address washington taxation. there will be 2-3 stores open on july 1.

the liquor control board wants that. they want to show progress. the prices you will see, you people in colorado are going to