Marijuana Vending Machines, Stoner Fantasy, May Become Industry Norm

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Posted: 06/09/2013 9:40 am EDT | Updated: 06/10/2013 2:03 pm EDT

Marijuana, already legal in two states and on the verge of legitimacy in others, may become a product that can easily be purchased via vending machine.

A Phoenix-based company behind the pot machines, Endexx Corp., envisions a transaction unfolding like this: A woman in Colorado, where recreational pot is legal, uses an app on her iPhone to purchase an ounce of weed, then goes to pick it up at her favorite retail outlet. There, she encounters the vending machine and uses its touch screen to complete her order, adding a book of rolling papers and a cigarette lighter.

“The way we see it, when you walk into a shop, you don’t need the expert or aficionado to help with selection,” Todd Davis, chief executive officer of Endexx, told The Huffington Post. “The people who are using this in the recreational space — they know what they want, and they don’t want to hear the whole spiel every time.”

Davis’s company recently bought two smaller firms that provide vending machines to medical marijuana outlets. One, Dispense Labs, produces a card-reading gadget used by the staff at pot clubs to dole out measured portions of cannabis, streamlining the buying process. (The machine is pictured below.) The other acquisition, CannCan, engineered a modified soda machine that dispenses plastic cans full of marijuana.

Davis said he hopes to turn those technologies into what, for the time being, still sounds like a hardcore stoner fantasy: a marijuana vending machine.

With retail sale of marijuana expected in Colorado by January 2014 –- and shortly thereafter in the state of Washington — Davis said he believes automated self-service machines ubiquitous in other parts of retail will pop up in weed stores, too. He said he expects his company to be one of perhaps three major players manufacturing those vending machines.

“It’s like a gold rush,” Davis said. “Once significant investment capital comes to the market, who knows?”

Davis already confronts competition. California-based Medbox Inc. is currently the industry leader in the decidedly small niche of providing machine dispensing systems to medical marijuana dispensaries. For $50,000, a pot shop can buy two state-of-the-art automated dispensing machines from Medbox –- one for marijuana, one for cannabis edibles like cookies and brownies -– as well as a customized software system that keeps track of inventory, sales and patient information. The company had sales of $1.75 million last quarter. Its machines are pictured below.

In the fledgling legitimate marijuana trade, Medbox’s CEO, Bruce Bedrick is sometimes referred to as “the Steve Jobs of medical marijuana dispensing,” a nod to his strategic acumen and supposedly flashy temper.

“We’re the only patented game in town,” Bedrick told HuffPost. “I’m not concerned necessarily about competition, generally speaking.”

Bedrick, a licensed chiropractor, said he doubts Colorado or other states will immediately allow automated self-service vending in a way that customers will find attractive. Regulations in that state are still being finalized.

“I think that’s still a couple of years down the road,” he said

In the meantime, Bedrick said his company will focus on supplying vending machines for medical dispensaries, as well as adapting the technology for selling conventional medication in pharmacies.

“Some people want to see this free-flowing marijuana,” Bedrick said, “They want to go from federal and state ban to marijuana for everybody. We don’t believe that can happen. In order to gain respect and trust, it’s better to go through gradual, medical adoption.”

A third company, Tranzbyte Corp., announced in April that it planned to begin distributing a marijuana vending machine secured with radio-frequency identification tags to dispensaries. Tranzbyte did not respond to repeated requests for comment from The Huffington Post.

David Levine has been a vending machine industry consultant for close to a decade. Earlier this year, he sold his own company, CannCan, to Endexx. In recent years, he has visited medical marijuana trade shows to explore sales of his own vending machine — basically a modified soda machine. He had figured it would take a long time for such equipment to find a market. But the moment is at hand, he said, as a former outlaw industry is flooded with sober-eyed professionals seeking to cash in.

“Back in 2009, you’d go to these conventions and you’d see people trying to unload 80 pounds of weed,” Levine said “Now, you’ll see people buttoned up and trying to figure out solutions for what’s a real industry.”


Marijuana Chain Planned By Jamen Shively; Investment Will Total $100 Million Over 3 Years

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AP/HuffPost | Posted: 05/31/2013 12:06 pm EDT | Updated: 05/31/2013 12:52 pm EDT

SEATTLE — Washington state businessmen who say they’re trying to create the first national brand of marijuana received some heartfelt support Thursday from the former president of Mexico, Vicente Fox.

Fox appeared at a news conference in Seattle, where he recounted how the war on drugs has ravaged his country and praised the states of Washington and Colorado for voting to legalize the recreational use of marijuana last fall.

At the news conference, former Microsoft manager Jamen Shively discussed his plans to launch a new marijuana brand named for his great-great grandfather, Diego Pellicer. He says his company is joining forces with a Washington state chain of medical marijuana dispensaries run by John Davis, the Northwest Patient Resource Center, as well as dispensaries in Colorado and California.

Shively’s planned investment will total $100 million over three years, according to the Stranger.

“This historic step today is to be observed and evaluated closely by all of us, because it is a game changer,” Fox said. “I applaud this group that has the courage to move ahead. They have the vision, they are clear where they’re going, and I’m sure they’re going to get there.”

Fox, a former Coca-Cola executive who was Mexico’s president from 2000-06, specified that he’s not involved in the venture. He appeared at Shively’s invitation. The two first met 13 years ago, when a company Shively used to run was opening a computer center in Sinaloa and Fox appeared at the inauguration, Shively said.

Shively described grand visions for his pot brand – hundreds of millions of dollars in investments, tens of millions of customers, more than 1,000 jobs just at Diego Pellicer’s Seattle headquarters.

“Yes, we are Big Marijuana,” he announced.

In a filing with the Securities and Exchange Commission last March, the company wrote that it had raised $125,000 of an anticipated $625,000. Shively suggested those numbers were outdated, but did not provide different figures.

Washington and Colorado expect to begin allowing marijuana sales to adults over 21 at state-licensed stores beginning next year, but marijuana remains illegal under federal law, and the Justice Department has repeatedly said it can continue to prosecute large-scale, privately owned marijuana operations even when they comply with state law.

It isn’t clear how Shively’s plans for a national marijuana brand might be accomplished without running afoul of federal laws regarding the distribution of an illegal substance or conspiracy to distribute an illegal substance. He and Davis said no money from their business will travel interstate, nor will the marijuana itself, but neither of those factors would necessarily shield them from arrest.

Shively insisted that his deals with the dispensaries are structured in such a way as to minimize any risk of federal prosecution, but neither he nor Davis would explain how. Shively said he had acquired certain “rights” related to the dispensaries, and made the plan sound like a marketing agreement by which the stores, beginning next month, would be re-branded as Diego Pellicer.

“Neither Diego Pellicer nor our investors are exposed to any significant risk, in terms of criminal risk,” Shively said. “In terms of criminal risk, that is vastly mitigated. … We’re making strategic investments, but we’re making them in such a way that they are not in violation of either federal or state law.”

Asked how his plan didn’t constitute a federal conspiracy to distribute marijuana, Shively described his operation as “a conspiracy to obey the law.”

His securities lawyer, Mike Moyer of the prominent Seattle firm of Dorsey and Whitney LLC, declined to elaborate.

Fox urged the reporters present to maintain a focus on the important issues at hand: the failure of the drug war, the thousands of lives lost, and the better alternative offered by legalization. He noted he’d rather be sitting at a table next to Shively than the notorious cartel leader Joaquin “El Chapo” Guzman.

“This is a much better option, no doubt,” he said.