Ex-Microsoft manager plans to create first U.S. marijuana brand

SEATTLE - Reuters

This Wednesday, Nov. 7, 2012 file photo shows a medical marijuana plant at a dispensary in Seattle. AP photo

A former Microsoft executive plans to create the first U.S. national marijuana brand, with cannabis he hopes to eventually import legally from Mexico, and said he was kicking off his business by acquiring medical pot dispensaries in three U.S. states.

Jamen Shively, a former Microsoft corporate strategy manager, said he envisions his Seattle-based enterprise becoming the leader in both recreational and medical cannabis - much like Starbucks is the dominant name in coffee, he said.

Shively, 45, whose six years at Microsoft ended in 2009, said he was soliciting investors for $10 million in start-up money.

The use, sale and possession of marijuana remains illegal in the United States under federal law. Two U.S. states have, however, legalized recreational marijuana use and are among 18 states that allow it for medical use.

"It's a giant market in search of a brand," Shively said of the marijuana industry. "We would be happy if we get 40 percent of it worldwide."

A 2005 United Nations report estimated the global marijuana trade to be valued at $142 billion. http://www.unodc.org/pdf/WDR_2005/volume_1_web.pdf

Washington state and Colorado became the first two U.S. states to legalize recreational marijuana when voters approved legalization in November.

Shively laid out his plans, along with his vision for a future in which marijuana will be imported from Mexico, at a Thursday news conference in downtown Seattle.

Joining him was former Mexican President Vicente Fox, a longtime Shively acquaintance who has been an advocate of decriminalizing marijuana. Fox said he was there to show his support for Shively's company but has no financial stake in it.

"What a difference it makes to have Jamen here sitting at my side instead of Chapo Guzman," said Fox, referring to the fact he would rather see Shively selling marijuana legally than the Mexican drug kingpin selling it illegally. "This is the story that has begun to be written here."

Shively told Reuters he hoped Fox would serve an advisory role in his enterprise, dubbed Diego Pellicer after Shively's hemp-producing great grandfather.

The sale of cannabis or marijuana remains illegal in much of the world although countries mainly in Europe and the Americas have decriminalized the possession of small quantities of it. A larger number of countries have decriminalized or legalized cannabis for medical use.

SKEPTICISM

Shively acknowledges that his business plans conflict with U.S. federal law and are complicated by regulations in both Washington state and Colorado. He said he is interested in buying dispensaries that comply with local and state rules and are less likely to attract the scrutiny of authorities.

"If they want to come talk to me, I'll be delighted to meet with them," he said of federal officials. "I'll tell them everything that we're doing and show them all our books."

Washington state's marijuana consultant, Mark Kleiman, said he was skeptical of Shively's plans, and feared that the businessman is seeking to profit off others' addiction.

"It's very hard for me to understand why anybody seriously interested in being in the marijuana business, which after all is against the federal law, would so publicly announce his conspiracy to break that law," said Kleiman, a professor of public policy at the University of California, Los Angeles.

Emily Langlie, spokeswoman for the U.S. Attorney's Office in Seattle, referred questions to the Department of Justice headquarters. Department officials did not immediately return calls seeking comment.

Washington state Representative Reuven Carlyle, a Seattle Democrat, sees promise in Shively's initiative. Any industry emerging from the shadows will inevitably undergo consolidation - and thereby simplify the task of regulators, he said.

"The fact that an entrepreneur is publicly pushing the envelope around a branding and value-based pricing opportunity, I would say that's in the water in Seattle," said Carlyle, chairman of the House Finance Committee. "That's in our DNA ... We could have predicted that as much as the rain."

Shively said he has already acquired the rights to the Northwest Patient Resource Center, a medical marijuana operation that includes two Seattle store fronts. He added that he was close to acquiring another dispensary in Colorado, as well as two more each in Washington state and California, with the owners given the option to retain a stake in their businesses.

"We've created the first risk-mitigated vehicles for investing directly in this business opportunity," he said.

Shively said he ultimately plans to create separate medical and recreational-use marijuana brands. Shively said he also plans to launch a study of the effectiveness of concentrated cannabis oil in the treatment of cancer and other illnesses.