Medical Marijuana a Growing Business for Arizona Entrepreneurs

by Francine on December 10, 2010

Marijuana is the new hot startup “technology” in Arizona. A new law, just narrowly passed, makes up to 124 dispensaries of medical marijuana legal in the state, and while the governmental entities struggle with regulations around locations, zoning, and licensing, the players — in state and out — have already started massing on the ground. Everyone has figured out that the small number of available licenses may increase in value, and everyone is trying to position himself to obtain one. That is, almost everyone. Fifteen states have now legalized medical marijuana, and there are actually some entrepreneurs who are experienced at this game by now. (Disclosure: an acquaintance of mine from the Bay Area operated a dispensary and wrongfully spent time in prison for his entrepreneurship)

Because I am a connection to funding sources and a collaborator with entrepreneurs, I’ve had a unique opportunity to meet some of the likely players.

The first company I met with about this new “biz opp” is headed by a serial entrepreneur who has owned a chain of night clubs. His idea, for which he is currently raising money, is to open a nationwide chain of integrative pharmacies, upscale and complete. He’s an Arizona resident, and has been planning the business since the initiative (which has been passed in Arizona before but never implemented) got on the ballot. Because Arizona is broke and all the states are looking for revenue, it was a little easier for people to both understand and vote for the initiative this time. However, Arizonans had to wait an agonizingly long time for officials to count the votes, because at first it seemed the initiative would lose. Surprisingly, the measure passed by a very slim margin. With all the aging Boomers in Arizona eligible for prescriptions, I would have thought it would be a landslide.

As soon as the measure passed, a retired doctor friend of mine (and some of his buddies) began talking to a group of younger people who were raising money for a dispensary and thought it would be a good idea for doctors to invest in the dispensary and then participate by going back into practice and examining patients to write prescriptions. When my doctor friend realized how difficult it might be to comply with the regulations, he and his friends decided to sit back and let the first wave pass them by. After all, they no longer practiced actively but they still didn’t want to run the risk of losing their medical licenses. My guesses is that younger docs will be more apt to participate, although I doubt that docs will invest. It’s complicated enough prescribing an MRI when you own an MRI facility. Weed? Not so fast.

A third group, Kind Clinics, wants to open a chain of dispensaries in Arizona and California and is holding seminars for potential participants/investors. This group has an idea for a secure vending machine for prescriptions. The machine, however, doesn’t exist yet. They are taking $25,000 refundable deposits, in exchange for which they will help you get your license. Apparently, they have some experience in California obtaining licenses. However, Arizona is not California, and I’m not sure the Arizona government has even written the regs yet. Because these are tech entrepreneurs, their approach is very professional. I worry about their domain expertise. Probably the night club entrepreneur has them beat:-)

The fourth entrepreneur, who actually operates two dispensaries in California, does not want to get into the fray in Arizona. He has been through these wars, featured in the Wall Street Journal, and called upon (harassed) by local police many times. Although he hasn’t been shut down, he has become fast friends with more attorneys than he ever thought would be necessary. Talking to him made me feel the other groups I had spoken to were naive.

According to Dan Halbert, it will take the local governments in Arizona years to figure out where they fit in vis a vis the state and Federal law, not to mention protecting their own constituencies from unwanted neighborhood traffic. During that time, dispensary operators will face many challenges. Having invested his life savings in the California dispensaries and fought these battles, he believes education is necessary well before the law is implemented.

So he has established a separate company, Greenway University, to educate people who want to participate in the surge of medical marijuana entrepreneurship that everyone knows will be nearly nationwide, on how to do everything from grow crops without pesticides to read a cash flow statement, to follow local laws and ordinances. He established the university in Colorado, and it is licensed and regulated by that state’s higher education authority. From the company’s press release:

Greenway University , the industry’s leading medical marijuana educational provider, has received formal state approval from the Colorado Department of Higher Education for its medical marijuana cultivation courses – making it the first and only such state approved and regulated medical marijuana cultivation courses in the United States. Greenway University is renowned for its compliance driven medical marijuana educational services in California, Colorado and the western US.

Want a laugh? The phone number of the university is 888-my420ed. I know what it means because I was a foster parent.

Any entrepreneur has to have a mixture of domain expertise and business acumen. I figure I can align with all of them on the education side; I’ve already learned a lot. All of these entrepreneurs are raising money, so I guess they can’t afford to pay me in cash. Should I take equity? Or….

{ 16 comments… read them below or add one }

tdhurst December 10, 2010 at 4:38 pm

This would be a fascinating business to be involved in. I’d be extremely interested in how they’d promote their product without making it sound like potheads.nnSome serious biz opps here.

hardaway December 10, 2010 at 4:54 pm

I see it going the way liquor stores went. They started out as small retailrndrive-thrus, etc in strip centers, and then later liquor got sold in drugrnstores, and now there are big box specialty stores and boutiques.

Magdalineage December 10, 2010 at 11:44 pm

I am an organic farmer in S. AZ who is interested in gathering a team of highly motivated individuals to quickly organize an agricultural enterprise that can meet the needs of medical mj patients in AZ. nMy contribution to this enterprise is approx. 100 acres of prime, irrigated farmland…including multiple wells, nRemaining investment: Install 1-3 (or more) solar water pumps, construct enclosed facilities, seeds, labor…love <3

John December 22, 2010 at 2:58 pm

Marc Kent is a executive director with Greenway University. He is a ex lawyer that was convicted of insurance fraud in California. One of the largest cases of fraud with many attorneys he recruited and then ratted on in the end to save his own ass. nnIt is true that Marc Kent has helped set up over 200 collectives in Southern California. Do you want to know what happened to the vast majority of these collectives he set up?? They got raided or shut down. He charged people $3500 or more to fill out a couple of sheets of paper at the LA business license office. He could not represent people as a lawyer because he was disbarred. He acted as a consultant that once the money was paid he was gone. Would you like to know how many collective owners are livid with his services. A lot….. Do yourself a favor and stay away from Greenway University…. Bad karma and bad business ethics all around. nnRainforest Collective in Los Angeles has some of the worst weed in LA…. Check out weedmaps and read the reviews for yourself.

John December 22, 2010 at 3:03 pm

Marc Kent is a executive director with Greenway University. He is a ex lawyer that was convicted of insurance fraud in California. One of the largest cases of fraud with many attorneys he recruited and then ratted on in the end to save his own ass. nnIt is true that Marc Kent has helped set up over 200 collectives in Southern California. Do you want to know what happened to the vast majority of these collectives he set up?? They got raided or shut down. He charged people $3500 or more to fill out a couple of sheets of paper at the LA business license office. He could not represent people as a lawyer because he was disbarred. He acted as a consultant that once the money was paid he was gone. Would you like to know how many collective owners are livid with his services. A lot…..nnCALIFORNIA | LOCALnLawyer Gets 2 Years in Insurance Fraud Case : Courts: The Granada Hills man is the last major defendant to be sentenced in ‘the Alliance’ scam involving a ring of L.A.-area attorneys.nOctober 16, 1991 | By MYRON LEVIN, TIMES STAFF WRITERnA former San Fernando Valley lawyer who enlisted other attorneys in “the Alliance” insurance scam and then became the star witness against them was sentenced Tuesday to two years in prison for his role in the fraud and legal corruption case. Marc I. Kent, 42, of Granada Hills, shook his head and lowered his eyes disconsolately as U.S. District Judge Judith Keep pronounced sentence, rejecting a plea to limit Kent’s punishment to a year in a halfway house.

MickeyFree January 26, 2011 at 11:34 pm

Im a grower as well hit me back with your email so we can discuss further details….

Rickdavone March 5, 2011 at 6:08 pm

Greenway University is a complete scam, they are a band of crooks from the mortgage business who are bent on taking over this business, DO NOT wast your time and money with them, they will rob you! These people know nothing about what they are teaching and are out for money, that’s it!Marc Kent is a executive director with Greenway University. He is a ex lawyer that was convicted of insurance fraud in California. One of the largest cases of fraud with many attorneys he recruited and then ratted on in the end to save his own ass.

It is true that Marc Kent has helped set up over 200 collectives in Southern California. Do you want to know what happened to the vast majority of these collectives he set up?? They got raided or shut down. He charged people $3500 or more to fill out a couple of sheets of paper at the LA business license office. He could not represent people as a lawyer because he was disbarred. He acted as a consultant that once the money was paid he was gone. Would you like to know how many collective owners are livid with his services. A lot….. Do yourself a favor and stay away from Greenway University…. Bad karma and bad business ethics all around.

Rainforest Collective in Los Angeles has some of the worst weed in LA…. Check out weedmaps and read the reviews for yourself.

GeoTech March 11, 2011 at 5:25 am

Type your comment here.

How can we reach you to help – highly motivated – experienced

Hastingssales April 11, 2011 at 7:24 pm

Would like to talk to you in regards to this venture. How do I get hold of you.

hardaway April 11, 2011 at 7:33 pm

Talk among yourselves:-) I definitely can’t grow medical marijuana:-)

Alampher April 15, 2011 at 4:42 pm

Would also love to talk with you. How can I get ahold of you.

Judimarie36 June 15, 2011 at 2:14 pm

medical patient in another state looking for info. on how to become a grower for other states. I grow for myself and would like to be in business with leagal dispensaries please advise judimarie36@yahoo.com

hardaway June 15, 2011 at 2:49 pm

I have no information because Arizona has sued for clarification of the
rules.

bubble bags July 4, 2011 at 9:58 am

Thanks for the post! :)

bubble bag monster

Rick Goodman July 17, 2011 at 9:54 pm

My name is Rick Goodman. I was first diagnosed with hepatita C about 5 years ago. The symtoms of this disease, as well as some other physical problems. have kept me from keeping full time employment for the last 3 years. My wife was the sole provider for our family(we also have a 13 year old still at home), until she fell of the roof of our house several months ago. The injurys she sustained required shoulder surgury, and she won`t be able to go back to work for 6 more weeks. The way I understand prop 203 is that I will be able to grow 12 plants for myself, and 12 plants each for 5 other people, for a total of 72 plants. I`ve also been told that I must offer ounces to my patients for 60 $, and whatever is left over I must sell to the dispensarys at 100$ an ounce. While I`ve never  grown indoors I have quite a bit of experience growing outdoors. I estimate that I can harvest 3 ounces per plant, every 2 months indoors,which at above listed prices comes to about 20 thousand dollars, every 2 months. I`m not looking to get rich doing this, alls I desire is to provide medicine to people who desparetly need it and to take care of my family. The problem is that I have no money, not even enough to obtain my medical or caregiver card. So if there is anybody out there that would be interested in investing in this venture, please contact Rick at 520-323-1432 or rrgtsn@gmail.com    Thank you

Skippy June 2, 2012 at 11:52 pm

I am looking for information about this as a business. Any information would be helpful. Do you still need some team members??/ Also live in southern Az and am highly motivated, need a job at something I enjoy doing…..Growing…..Growing…..and green.
Can contact me at fcastro13@msn.com
@msn:disqus 

Leave a Comment

Previous post:

Next post: