Pubdate: Fri, 30 May 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: David Migoya
Page: 14A

VENTURE CAPITALISTS LISTEN TO POT PITCH

Legal marijuana's only solution to its banking crisis is an act of
Congress, bank and industry experts say, one that will let Colorado's
newest and hottest business sector handle its finances like all others.

Speaking Thursday at the first Cannabis Capital Summit, sponsored by
the typically conservative Rockies Venture Club, industry leaders said
efforts to legitimize the relationship between banks and marijuana
businesses isn't the same as legalizing it.

"Put simply, these are businesses that very much want and need a
banking relationship, but will continue to press on and succeed even
without one," said Michael Elliott, executive director of the
Marijuana Industry Group, during a panel discussion about banking issues.

The first summit was a day-long, standing-room-only gathering at Mile
High Station, whose location near the stadium is an echo of the
subject matter's dark past-tucked into a corner of the city, under a
highway overpass, rather than in downtown's mainstream.

Nevertheless, venture capitalists swarmed the event, eager to hear
industry insiders offer tips, pitches and insight to the
multimillion-dollar business that is cannabis and hemp.

Pitches ranged from a commodity exchange for cannabis-related
products-much like the corn, soy and pork-belly futures markets work-
to a seed-growing operation for a genetically modified product.

"This is more successful than I had hoped," Rockies Venture Club
executive director Peter Adams said, noting more than 300 registrants
came from as far away as Alaska and Florida.

"Investors are saying it's legal and they're all in," Adams said.
"They're treating it like the dot-coms, where some will succeed wildly
and others will not."

The tell-tale was a pitch by a cannabis industry supplier that
attracted a lot of investor interest at a monthly club meeting earlier
this year.

"So much so, one member who missed the meeting made sure not to miss
the opportunity and left a $50,000 check under the doormat of my
home," Adams mused. "That's when I knew we needed to explore this more."

One of the summit's keynote speakers, Troy Dayton of ArcViewGroup, a
San Francisco angel-investment firm whose members fund
cannabis-related projects and businesses, said businessmen and women
in the legalized industry are in a better position to impact politics.

"To change the world, there's no need to select one or the other," he
said. "But when you're choosing between prison and regulation,
regulation looks pretty good."

Politics is what bankers said will be required to change federal laws
that keep marijuana illegal and, as such, a headache for them to bank
its dispensaries and growers.

"It will take an act of Congress to change things," said Alan Peppers,
president and CEO of Westerra Credit Union. "The way it is now, it's
simply insufficient for us to knowingly bank the sector."

New legislation in Colorado that would create a credit-union-like
cooperative for marijuana businesses to work within is unlikely to
gain the federal approval it needs, Colorado Bankers Association CEO
Don Childears told attendees.

"As long as it remains illegal under federal law, it cannot be banked
legally," he said.
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MAP posted-by: Matt