A local medical marijuana facility has found itself propelled into the forefront of the drug’s push into normalcy in American society, joining forces with a business model and significant financial backing poised to get cannabis to the people through a unified brand and chains across the nation.
Sometime in the next 90 days the signage outside the nondescript Northwest Patient Resource Center (NWPRC) at the corner of 35th SW and SW Roxbury will change. It will reflect a yet unnamed - but likely to become - nationally known brand, representing the retail face of the medical cannabis industry.
Two branches of one company
In a news conference in Seattle that drew international attention on May 30, former Microsoft Executive Jamen Shively appeared with former President of Mexico Vincente Fox and NWPRC owner John Davis to announce that his new company Diego Pellicier Inc. would bring retail branding to the marketing of marijuana. He wants to create a chain of "premium marijuana retail stores," all intended for the recreational user. At the same time, Shively announced that he would partner with NWPRC’s Davis, to develop retail and medical product outlets where and when jurisdictions across the country will allow it. It was not widely reported, but President Fox paid a visit to the NWPRC West Seattle location that same day.
Tricky business: forming a technically illegal company
Davis, whose company has been all over the national and international news in the past few weeks, has no concerns about this even greater exposure, despite the fact that technically he's involved in a criminal conspiracy, at least under federal law.
"I sleep well at night," Davis said, "and you could argue that we are actually conspiring to help the law and improve the situation."
"A number of my colleagues have been calling and paying their last respects saying they don't expect to see me for awhile, but I'm still here and not bound by chains," he joked.
Davis met Shively through a mutual friend and Shively had read about Davis in the press. Now they talk daily.
Politics before business, at least for now
Both men say they view this effort as much a political effort as a business venture, despite the obvious financial incentives. Today the illegal market Shively estimates is at $100 billion with the legal market potentially doubling that figure. But the political equation looms large.
"Nothing that I'm doing here is legal under federal law," said Davis, "It's not a firm foundation so politics is everything. You want to be talking to those people who could arrest you to get their opinion."
Shively added, "This is something that I'm very passionate about. I became passionate about (marijuana’s) benefits as a consumer and as I learned more about the industry and the question of illegality and legalization I learned how big of an injustice it is. How many lives it is costing."
Still, he's keenly aware of the massive upside. "Being profitable initially is something to make sure that we do but as I thought about it, it also became obvious that it was the single biggest financial opportunity that I or someone like myself could jump into and be the leader of a multi hundred billion dollar industry."
"He's become an activist," Davis said of Shively. "This country has become the largest jailer in the history of history and when we picked up Vincente (Fox) at the airport on the ride in he was talking about the ravages of the drug war in Mexico. You can't be around that and not be affected by it.
"We're conspiring to make a success in the system. Someone is going to have to step up in this legalization effort and actually do it, in order for the system to actually work (…) We're going to say, here's the thing, this is what we do. We're moving forward. Obama's response has been, 'We're studying the initiatives and we'd like to have the ability to make a comment fairly soon. They're still studying? It's a recorded message. They're going to continue to say that. The Obama Administration views the Ogden Memo (a notice released in 2009 that appeared to dial down enforcement efforts), as a fail."
Davis explained that despite the appearance of a more relaxed attitude and the wide reporting of this impression, the Obama Administration in fact has done the opposite. Dispensaries proliferated but were quickly prosecuted.
"They don't want to issue another 'Ogden type memo' but if you see them issue something, it will be in that vein (…) it was inevitable that in the absence of guidance someone would step up and say, 'We are moving forward and we are giving guidance.' "
Changes locally, with plans to replicate nationally
Present customers of NWPRC won't see many changes, aside from signage. The model is already built. "We will have more cash," said Davis. "I'm still running things and in charge. We just have new capital partners and will open more retail locations when we go multi-state." The company has said it will be at least one year before any retail recreational stores will open.
The branding including the graphics for the new identity are all done and ready to go, said Davis, but he can't announce it yet. "The structure of doing it so it's risk mitigated to the point that you can have Wall Street involvement, that's a thinker," he said.
He's even in favor of taking the company public in the future, "If we need that type of capital. We've got to see what our revenue projections are and maybe we don't have to, if we can grow it fast enough. But what we're talking about is a massive undertaking."
The term "Starbucks of Pot" has been applied in some circles to what Shively and Davis are planning but he says that's inaccurate. "The laws are going to vary from place to place, which is going to dictate quirks in the overall design." There are plans in process in Washington and Colorado where the rules and laws are now more relaxed. But Davis explained, "It's more than just the laws that are in place. It's who is your U.S. Attorney? Because those things have to be looked at."
"Legal marijuana is only reality in two states," said Davis, "but there has been a shift in policy. As it shifts we will be able to respectfully open up other markets and spread a good business design, with good consumer protection to other places. That is going to include medical and recreational. My brand will be the brand that opens up new markets. Diego Pellicier will be only in tried and true legal recreational markets. They will be the high end." He expects the medical marijuana market to be the "door opener" in "some cases."
"I believe my brand will morph with what the local laws are, to bring successes to programs as they come online,” Davis said. “And to show successes in the program we have here to the point that other people look at us and want that. They want a reduction in youth use. They want a reduction in organized crime. They want consumer protection for a substance that their children are already using. They want to keep it away from the kids."
Davis, who has been the primary organizer for Seattle's HempFest, said that NWPRC would likely be one of the main sponsors for this year's event "as a last hurrah" for the NWPRC brand. The event runs Aug. 16 - 18 at Myrtle Edwards Park on the Seattle waterfront. The new brand will likely have a presence there too, however.
The Diego Pellicer brand will get the majority of the marketing push. You'll see T-shirts, caps, and other retail marketing the brand since it represents the very first branding in a potential multi-billion dollar market. The new medicinal brand Davis is launching, however, won't be seen on packaging but will appear on signage and possibly some swag, like T-Shirts. He doesn't anticipate putting the brand on any marijuana product, primarily because he can't. "It's RCW 69.50.8328." That law prevents any economic interest in the production of marijuana products. Money from cannabis cannot flow interstate, which means the new company will create individual corporations in each state. "There won't be any cannabis money going across any border," said Davis.
To help navigate a very murky legal landscape, the law firm they've hired is Dorsey Whitney.
Beyond selling weed
Shively also sees the model he's building (and the potential cash flow) as one that could be replicated in certain aspects to literally end world hunger.
"It's a system to model and optimize world food production and distribution, with the goal of ending world hunger and feeding the planet in a nutritious way that is also environmentally sustainable." He sees hemp, the non-psychoactive fibers of marijuana, as being beneficial to removing CO2, in being more productive in terms of pulp for paper, and creating building materials. All of this would, in his articulated vision, also create new jobs in new industries.
Bringing down the wall
What will it take to breakthrough and make cannabis legal nationwide, and to create the opportunity for Diego Pellicer to become a household name? Davis has a one word answer. "Texas." He asserts that if a medical marijuana law were to pass in that state, other states would follow like dominoes.
“We have 19 states and the District of Columbia. When we have more than half of the states you can start to make an equal protection argument. When you can point at someone in a neighboring state and say, 'why do they have protection under the law and I don't just because of where I live?' you have an argument," said Davis.
“The Berlin Wall of Prohibition is clearly coming down. All we did last Thursday (at the press conference) is to publicly take a swing at it with a large hammer."
