.

[Viceroy]

420 cannabis

[dank]

Where are you getting the figure of 700/400 per pound?

Quality cannabis can be grown at 10/ounce, or 160 a pound.

Also, keep in mind, price will drop as it's legalized, not that it's not a high return.

[dank]

"Where are you getting the figure of 700/400 per pound?"

There is nobody in the state currently growing for less than $500 per pound that I can identify.  Even the company with 80,000 sq ft of indoor production is at $700 per pound.  I have met one company who achieved $500 per pound but they included the entire plant in that figure, not just the smoke-able parts.

"Quality cannabis can be grown at 10/ounce, or 160 a pound." 

Not sure where you are getting that figure.  If you could produce high quality medical grade marijuana for $160 per pound you'd be a billionaire.  (Even in Mexico they charge $500 per pound).  There are TREMENDOUS costs associated with building out a large indoor production facility.  Your $160 estimate would not cover electricity and nutrients alone, let alone labor, rent and state fees.  Perhaps if you had a hundred acres you could achieve this price, but certainly not with the limitations imposed by the regulations.  (Nobody has the plant count to grow out 10 acres, let alone 100). 

"Also, keep in mind, price will drop as it's legalized, not that it's not a high return."

This is true, especially when Colorado legalizes recreational marijuana use this fall.  The reality on the ground is that there remains a tremendous shortage of product throughout the state.  That is the main reason the price is as high as it is. 

This opportunity only exists because prohibition is in effect in 60% of the US.  Prohibition drives the price as high as $7000 per pound retail on the east coast.  As prohibition ends so do the profit margins but we estimate there is at least another decade of this gray-area state legal for-profit opportunity.

Thanks for your comments.

I agree, the price drop will take time, just as it has in Cali with medical.

I got the figure while researching cannabis a while back, but it wasn't for commercial scale grows so I'm sure other costs play a factor.

What techniques do you plan on using for growing?  Will you produce organic cannabis as well?  Do you plan on engineering your own strains?  And do you plan on selling bulk or retail level products?

Sorry for all the questions, thanks for your response.

[chrisrico]

Have you considered using GLBSE for this fundraising operation? I would be hesitant to just send you some bitcoins, but if you were verified on GLBSE and offered an IPO I would definitely invest.

If not GLBSE, what methods do you propose to protect your investors, both from potential fraud or from legal liabilities?

[Bitcoin Oz]

Have you considered using GLBSE for this fundraising operation? I would be hesitant to just send you some bitcoins, but if you were verified on GLBSE and offered an IPO I would definitely invest.

If not GLBSE, what methods do you propose to protect your investors, both from potential fraud or from legal liabilities?

This is the way to go.

[556j]

Have you considered using GLBSE for this fundraising operation? I would be hesitant to just send you some bitcoins, but if you were verified on GLBSE and offered an IPO I would definitely invest.

If not GLBSE, what methods do you propose to protect your investors, both from potential fraud or from legal liabilities?

I am more than happy to accept help from anyone in pitching through GLBSE as I have not yet done that.  I will absolutely look at GLBSE right now. 

Don't bother. Regardless of your state laws cannabis is still federally illegal. GLBSE wouldn't let you list there. They'd get shit on by FBI/DEA or other federal agents.

[556j]

I'd also warn anyone interested in investing in this to communicate via tormail.org or some other .onion communication with pgp only. Out of state investors could face serious charges.

[chrisrico]

Don't bother. Regardless of your state laws cannabis is still federally illegal. GLBSE wouldn't let you list there. They'd get shit on by FBI/DEA or other federal agents.

From GLBSE's terms of service:

4. It is not the Exchange's responsibility to ensure that those trading, listing, or issuing assets on the Exchange are operating according to any kind of rules, regulations, laws, or standards those trading, listing, or issuing assets on the Exchange are subject to in any jurisdiction, beyond these terms of service.

You realize that GLBSE is already an unlicensed security, bond, and stock market, right? I don't think they care too much about complying with any particular nation's laws. I find this to be a huge benefit.

[chrisrico]

You need Nitrogen, Phosphorus and Potassium and unfortunately the main source of those is chemical companies.  The truth is the plant doesn't care if the Nitrogen you use is from Shell Oil or some other major company, Nitrogen is Nitrogen is Nitrogen and most of it comes from petroleum plants.  It is much easier to use 'organic' fertilizer in soil rather than in our water based medium.

What about the use of Aquaponics? Granted, it may not be feasible for the type of plants your growing, nor for as large an operation. I find it fascinating though.

[chrisrico]

I just read your OP more carefully and I now realize that I will unfortunately be unable to participate. I didn't realize you were looking to secure large loans from only a few individuals and that you would be legally unable to offer equity investments to non-Colorado residents. I was thinking you could use GLBSE to issue shares and pay dividends, but you could still use it to issue a bond which you could buy back later. There are others more familiar with the use of GLBSE than myself that could help you with that. I would maybe check in the Securities subforum.

We are not trying to feed the world but instead trying to turn a large profit based on black-market pricing before prohibition ends.

Haha, true enough.

[556j]

It's already been discussed and Nefario (the guy who runs glbse) has said he won't allow it. It's on these forums. But it can't hurt to send glbse support an email asking them again.

Here's an example

Thread:
https://bitcointalk.org/index.php?topic=85378.0

Post from glbse operator:
https://bitcointalk.org/index.php?topic=85378.msg951891#msg951891

[chrisrico]

It's already been discussed and Nefario (the guy who runs glbse) has said he won't allow it. It's on these forums. But it can't hurt to send glbse support an email asking them again.

Here's an example

Thread:
https://bitcointalk.org/index.php?topic=85378.0

Post from glbse operator:
https://bitcointalk.org/index.php?topic=85378.msg951891#msg951891

Thanks, I was not aware of this.

[556j]

He was in a legal state as well. No mention of it being illegal. Anyway the concerns I've brought up are very real. California has shown us this with dispensary raids and the like. It's very irresponsible to solicit loans or deposits which could likely land "investors" in jail on conspiracy charges or worse. It's your responsibility to check things over with an actual lawyer before risking others freedoms based off what you "think" Don't mean to be harsh or shit on your thread but this is dangerous territory for investors and I feel you don't really recognize the entire situation. I'm a big supporter of MMJ. If people were to use tor/gpg/bitcoin there's very small chance of getting caught or implicated. Doing this in public as it stands is very foolish though.

[Gomeler]

I don't have the money to invest however I do live in Colorado and would be interested in checking out the operation as you guys scale out. Never hurts to have unaffiliated eyes to confirm something is what it says it is.

[sadpandatech]

It's already been discussed and Nefario (the guy who runs glbse) has said he won't allow it. It's on these forums. But it can't hurt to send glbse support an email asking them again.

Here's an example

Thread:
https://bitcointalk.org/index.php?topic=85378.0

Post from glbse operator:
https://bitcointalk.org/index.php?topic=85378.msg951891#msg951891

wasn't that gentleman looking to run an illegal grow op?

Though I cannot disagree on asking Nef first on this idea..

[BadBitcoin (James Sutton)]

well colour me interested, if you somehow persuade nefario to allow it I'd be more than interested in supporting your operation, as long as US politics don't get involved.

[chrisrico]

I just wanted to point this out in case anyone else missed it on first read as I did.

We are seeking 1-7 individuals to lend $50,000-$350,000 at an interest rate of 20%.

...

If you are interested in lending $50,000US or more to this project and earning a 20% return contact me right away.

Viceroy, are there legal or economic reasons for having a small number of very large lenders rather than a large number of small lenders? You might successfully use GLBSE in the former case, but I think you'd have a much higher chance of success with the latter.

[chrisrico]

If GLBSE would allow it we'd open it up to the general public.  If we are forced to accept only US dollars than the SEC will prevent us from dealing with non-accredited investors.  (An accredited investor is a person who makes more than $250k per year defined by the SEC under Rule D of 1933).  This is the same hurdle every entrepreneur has, federal law says very clearly that you are only allowed to borrow money from rich people.  (Until they enact the JOBS Act which overturns 80 years of law).

Excellent. Thank you for clearing that up. I personally think it would be great if this were done through GLBSE. You are sure though, that the SEC will not prevent you from dealing with non-accredited investors if you receive loans in denominations other than USD? That would seem surprising to me based on my knowledge of how the government treats everything from barter to foreign currencies, at least for tax purposes.

[chrisrico]

The SEC is in charge of managing securities and public offerings but there has not yet been any case law established calling bitcoins money or currency that I am aware of, else GLBSE could not operate at all within the US. I also am not aware of any instance where a holder of bitcoins has been forced to pay taxes on them, are you?

http://www.lextechnologiae.com/2011/06/26/why-bitcoin-isnt-a-security-under-federal-securities-law/

Well, Bitcoin is not a security, but would a security sold in exchange for bitcoin not fall under the jurisdiction of the SEC? I'm not sure.

I don't know if anyone has specifically been caught evading taxes on bitcoins, but I do know that according to the income tax rules, any financial transaction, even if it is barter, is a taxable event.

[guruvan]

It is interesting that CO allows for-profit dispensaries. (California clearly does not)

It is not encouraging to look at prices in California. As legality increases, price decreases. Ganja grown in CA for consumption in CA brings $100/oz ($1600/lb). The further east its brought (illegally) the higher price it commands, up to $5600 on the east coast US.

Costs to actually grow the herb are truly around $160/lb. Before real estate costs (rentals or purchases). (depends on outdoor vs. indoor, and actual goals .

securities sold in exchange for BTC are potentially regulated by the SEC, but no more so than any other security being traded on GLBSE or MPEx or Cryptostocks right now.

GLBSE has already listed and subsequently delisted POT2PEER. This may not be something you can push past Nefario. With a proper prospectus, MPEx might list it - they're more underground than GLBSE, but have apparently more stringent listing requirements. I personally prefer to trade on MPEx - it is considerably more secure.

I would consider investing, but I would need to see a full prospectus from your organization. The general gist of a plan set forth is interesting, but insufficient. Please provide full financial projections - spreadsheets are important, words are largely not.