Blum Holdings Inc (BLMH)

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New IVXX Elevate cannabis oil "Powered by WeedMaps"






TECH AND WEED

“What Amazon did for books, that’s what I’m going to do for marijuana,” said Justin Hartfield as he walked through the bright and spacious offices of Weedmaps Media Inc. in Irvine.

A few months ago, Weedmaps moved from their 8,000-square foot offices to a space five times as big – cavernous for the 50 employees working there. There’s a room for regular yoga sessions and a TV studio. This afternoon, brownies, sandwich wraps and the remnants of lunch from Rubio’s covered the countertop of the big open kitchen.

Hartfield, who has a computer science degree, and Francis founded Weedmaps in 2007.

“I got my medical marijuana card, and I saw there was just a lack of information, especially like a Yelp-style information source (for dispensaries),” Hartfield said. “I wanted to create a site to see where they were, and a menu of prices.”

Last year, Weedmaps brought in more than $25 million. That mainly came from listing fees from dispensaries, but also from business software for dispensaries and from advertising on Weedmaps TV, the company’s YouTube channel. Weedmaps is profitable, but Hartfield declined to say by how much.

Peterson and Hartfield said they’re talking about moving Terra Tech’s offices to the Weedmaps building and creating a sort of “incubator” center for marijuana-related businesses.

“We think the synergies could be great,” Peterson said.

For now, Weedmaps is keeping direct selling of pot at arm’s length.

“But best believe, when marijuana’s legal, Marijuana.com (Weedmaps’ news and content site) is going to sell more weed direct to consumer than anybody in the world,” Hartfield said.

RISK VS. REWARD

Up until now, none of Terra Tech’s operations have dealt directly with the marijuana plant. That’s about to change.

The publicly traded company is moving into producing medical marijuana products, assuming the associated risks.

Peterson co-owns a medical marijuana dispensary, Blum Oakland, in the Bay Area. Terra Tech is traded on the over-the-counter market. To insulate investors, the dispensary is positioned outside the public company.

Terra Tech also owns a laboratory in the Bay Area, which extracts cannabis concentrate that’s then made into oils and other forms of marijuana sold in dispensaries.

Initially, Terra Tech planned to lease out the lab to medical marijuana companies for their own products. Last month, Terra Tech’s directors voted to start using the lab to make medical marijuana products under Terra Tech.

They’re using a medical marijuana permit in Oakland, held by Peterson and Salwa Ibrahim, co-owner of the dispensary. The company is working to comply with state and city regulations, Peterson said.

Peterson estimated the lab could generate $4 million or more a year. Separately, Terra Tech is projecting revenue of $7 million this year, mostly from Edible Garden.

“We’re crossing the green line,” Peterson said. “We want to make sure we don’t lose out to competition. So it’s that balance of risk/reward. We’re risking federal intervention. But if we’re not doing anything, we’re risking competitive intervention.”

Terra Tech is not yet profitable, however. Recurring losses have stacked up to a deficit of about $24 million as of June 30.

Terra Tech has applied for several permits for medical marijuana production and dispensaries in Nevada, another step toward merging the publicly-traded company with marijuana production. The state’s decision is due in November.

The risks for companies like Terra Tech lie partly in the conflict between state and federal law.

Twenty states and the District of Columbia allow medical marijuana use, according to the White House. Attorney General Eric Holder has said the federal government won’t crack down on medical marijuana sellers in states where it’s allowed. But the substance is still illegal under federal law.

That makes some banks reluctant to accept deposits from marijuana-related businesses. Terra Tech used to bank with Chase, Peterson said, until they were asked to leave.

MARIJUANA LAWYER

Aaron Herzberg remembered feeling burned out as a business attorney in Orange County, representing CEOs, professional athletes and celebrities. When he met Weedmaps’ founders, he wanted his own piece of the industry.

“When Colorado and Washington flipped the switch and voted in recreational, adult-use marijuana, I said now is the time,” he said. “I sold my practice, and I jumped in feet-first.”

It’ll take some time to get back to the $1 million-plus he made as a lawyer previously, Herzberg said.

“But I am involved in investments that I believe will be very lucative in the future,” he said.

He and business partner Leslie Bocskor are about to launch a hedge fund through their consulting firm Electrum Partners. They aim to raise $25 million to invest in the marijuana industry in states where medical and recreational marijuana are legal. He also has an interest in a California dispensary and is applying in Nevada to open a 20,000-square foot cultivation facility in North Las Vegas.

“The opportunity for relatively small entrepreneurs to get involved and make money is great, if you know where the appropriate opportunities are.”


http://www.ocregister.com/articles/marijuana-637494-tech-terra.html