Pubdate: Sat, 25 Jan 2014
Source: San Francisco Chronicle (CA)
Copyright: 2014 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Alison Vekshin

POT PITCHES HITTING THEIR HIGH NOTES

Daniel Yazbeck stepped to the podium before about 140 investors in a
Las Vegas conference room with 15 minutes to persuade them to bankroll
a handheld testing device that helps pot users evaluate marijuana.

Yazbeck, a lead investor in the product called MyDx, told the group he
was seeking $1.25 million in exchange for a 20 percent stake in the
analyzer company. He was the first of 12 entrepreneurs invited to
pitch at a conference organized by ArcView Group, a San Francisco firm
of angel investors.

"It's a tool that will not only educate, but will also empower people
with healthier lives by knowing what's in everything they eat, drink
and inhale," Yazbeck, 36, said Thursday before showing a video on the
tester, which also will be able to detect pesticides in food and
contaminants in water.

The meeting coincides with the start of legal marijuana sales in
Colorado, where retail shops opened Jan. 1 to long lines of consumers.
Investor interest has surged since voters in Colorado and Washington
state became the first to legalize recreational marijuana use in 2012.
Stores are expected to open in Washington later this year.

"Welcome to the golden age of cannabis investing," Steve DeAngelo,
ArcView's president, said at the start of the meeting.

"There will never, ever be another time when the deals for investors
will be as good as they will be over the course of the next couple of
years," said DeAngelo, co-founder of Harborside Health Center, a
medical-marijuana dispensary in Oakland and San Jose. "So be cautious,
do your due diligence, be deliberate, be wise. But have your
checkbooks ready. The time is now."

Jon Cooper and Dooma Wendschuh, co-founders of Ebbu, took to the stage
to pitch marijuana products from pre-rolled joints to refills for
ecigarettes, all labeled to show the high they produce, ranging from
"chill" and "giggle" to "bliss" and "energy."

"What happens when you walk into a dispensary?" Cooper told the crowd.
"You see rows and rows of glass jars, and each of them contain a
different strain."

"With upwards of 500 different strains, you can see how this is really
confusing for the cannabis consumer. How do you find a strain that's
right for you?" Cooper said.

"No more half-hour conversations with the bud tender," Wendschuh said
of their labeling system. "It's simple, and it's going to change the
world."

Investors at the meeting included Joby Pritzker, whose family started
Hyatt Hotels Corp. and who declined to be interviewed.

Tom Bollich, a founding employee of Zynga, said investing in the
marijuana business feels similar to the mobile applications industry.

"It's like the Wild, Wild West," said Bollich, chief executive officer
of Hydro Innovations, a Boulder, Colo., company that makes
climate-control systems for marijuana growers.

"Right now, it's a gold rush and we're trying to sell shovels,"
Bollich said outside the conference room, between brief interviews
that resembled speed dating. Investors and entrepreneurs lined up
across from each other with a few minutes to talk before moving to the
next person.

Twenty states, including California and Massachusetts, allow the
medical use of marijuana. While federal law still classifies the drug
as an illegal substance, the U.S. Justice Department said in August
that it wouldn't challenge the legalization laws in Washington and
Colorado, provided the states prevent out-of-state distribution,
access to minors and drugged driving, among other things.

President Obama said he didn't think marijuana is "more dangerous than
alcohol," in an interview with the New Yorker published Jan. 19.
Noting that he smoked the drug during his youth, he also said he views
it now as a "bad habit and a vice," and "not something I encourage."

Leaster Gibson, 38, an investor from Missouri, said he's interested in
backing a couple of companies that made pitches, while declining to
name them.

"Marijuana is the best growth industry probably in the next five to 10
years," Gibson said in an interview in the conference hall's
courtyard, where the smell of marijuana filled the air. "I think
there's a tremendous amount of money to be made."  
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MAP posted-by: Jo-D