South Florida business owners discuss prospects of profiting from legal pot

It looked less like a Cheech and Chong movie than a junior chamber of commerce meeting as would-be marijuana entrepreneurs — ganjaneurs, as many of them call themselves — gathered in West Palm Beach on Saturday to plan for the day when weed is legal in Florida.

Heartened not only by a proposed state constitutional amendment that would permit medical use of marijuana but by three bills before the Legislature running the gamut from easing restrictions on industrial hemp to outright legalization of the drug, about 100 potential businessmen met to trade tips on the new almost-industry.

Once upon a time, conversation among marijuana dealers mostly ran along the lines of cigarette boats, Glocks and cash-counting machines, the tools of an illegal trade. But Saturday’s chatter was about convertible stocks, vertical integration and other trappings of an industry that now is at least partly legal in 20 states and the District of Columbia.   And the crowd having the conversation was practically indistinguishable from an Amway conference in the same hotel. “I’m so glad I didn’t wear my tie-dyed clothes and dreadlocks today,” cracked Miami filmmaker Billy Corben as he started a speech on the campaign for the constitutional amendment.

“These aren’t people who want to sell a couple of bags of weed in the parking lot to defray the cost of their own smoke,” said Robert Platshorn, who organized the $400 a pop conference. “These are businessmen who want to make serious money.”   Platshorn himself made serious money in the marijuana industry while running the infamous Black Tuna Gang, a 1970s smuggling operation so wildly profitable that its headquarters — the Presidential Suite in the Fontainebleau Hotel — was equipped with a grand piano and a spiral staircase. He eventually served more than 30 years in prison, one of the longest sentences for a marijuana conviction in U.S. history.

There were signs that a few of the people at the conference might share a bit of his adventurous history. When an attorney asked, hypothetically, whether an old conviction for narcotrafficking would be enough to keep somebody from getting a license to sell medical marijuana, several shouts of “Hell, yes!” — accompanied by knowing chuckles — rang out across the room.

But most of the group was decidedly non-outlaw in outlook. “I don’t like growing,” said Oscar Fonseca, 27, who was there in hopes of finding a tenant for warehouses he owns in Medley, Hialeah and Doral. “I’m not a huge fan of the product. But I am a fan of money.”  And at least one potential marijuana merchant came from the other side of the fence. A law enforcement officer who, prudently, identified himself only as “James,” said he got interested after the prices of stocks of companies associated with the industry in Colorado, where marijuana became completely legal on Jan. 1, went through the roof.

“Some of them jumped 1,000 percent almost overnight,” he said. “I was impressed enough to take a $20,000 loan against my retirement to buy into some of them.” Not impressed enough, however, to tell his buddies back at the station that he was going to Saturday’s conference: “I don’t know if they’d disapprove, but, well …”

There was general agreement that Florida will be a lucrative market when — nobody seemed to think it was “if” — one of the medical marijuana measures is enacted later in the year.  “You’ve got so many older people here, people with all kinds of illnesses,” said one man, a former flower-grower who has knocked around at various jobs since foreign imports killed off his industry a decade or so ago. “That’s a business-driver. Cancer! Bone diseases! If you had those, what would you rather take for the pain? Something easy and organic like cannabis? Or an addictive opiate?”

But many of the experts who addressed the conference warned attendees that they’re getting into a business that’s a lot more complicated — not to mention hazardous — than it looks.  “I want people to watch out,” said Norm Kent, a Fort Lauderdale attorney who has been defending marijuana cases for more than 40 years. “It’s a pioneering industry, with rewards to be had, but risks to be dealt with.”

Many of the risks stem from the peculiar legal twilight zone in which the marijuana industry exists. Even in the states that have legalized it, it remains against federal law — a fact that makes other businesses shy away.  “There’s a word for you that they use at the federal level, and that’s ‘felon,’ ” said John Makris, a Palm Beach County accountant.

Because the federal government considers anybody who knowingly does business with marijuana industry to be accessories to narcotrafficking, even legitimate businessmen will find it difficult to open banks accounts or find landlords, he warned.

Much of his speech was devoted to arcane bookkeeping tricks to minimize taxes for an industry that’s specifically prohibited by federal law from taking ordinary business deductions like payroll and rent.  Others cautioned that states squirmy about removing criminal sanctions against marijuana have compensated by hyper-regulating it, turning it into a bureaucratic swamp of fingerprints, fines and fees.

“They’re looking for a three-ring binder full of documentation,” said Stuart attorney Michael C. Minardi, describing the maze of business permits and licenses required to go into the marijuana business in other states. “You can’t show them pictures of your closet grow. That’s not gonna do it.”

Source:  March 2014

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