As CalWatchdog.com previously reported, some in the marijuana business have been instrumental in pushing for a ballot initiative that would legalize recreational use. The company behind WeedMaps.com, for instance, recently contributed $1 million to one such effort. Now, similar startups seeking funding of their own have turned to the Valley’s VCs — and some startup incubators have opened up to the possibility.

Growing a market

Through new apps providing platforms that match supply with demand, customers and dispensary owners have quickly benefited “from the Silicon Valley-style normalization of the marijuana market,” Pacific Standard noted. “While companies like Leafly provide Yelp-style reviews of cannabis strains and dispensaries,” however, “fewer entrepreneurs are willing to deal closely with the product itself.”

One concern has been “scale,” the potential of a company to reach exponentially more users. Through one representative startup, GreenRush, users can “browse the dispensaries on the website, select the appropriate strain, and set a delivery time,” Pacific Standard observed. “An iOS app is, of course, in development, so you can buy straight from your couch without even having to touch a keyboard.” But in confirming that each purchaser has a medical marijuana card, GreenRush has accepted significant constraints on its customer base.

But David Hua, CEO of the ridesharing service Sidecar, told the Silicon Valley Business Journal that “the rapidly growing medical marijuana market promises to support a significant logistics business” even in the absence of uniform state and federal legality for the drug. “Drivers making cannabis deliveries via Sidecar must be medical marijuana card holders themselves, and they can only deliver to members of a particular cannabis cooperative of which they also are a member,” the Business Journal noted.

The perils of illegality

Another issue has revolved around pot’s patchy-at-best legal status. “A lot of venture capitalists smoke,” said one to the San Francisco Chronicle. “This is about legality. They don’t want to deal with (cannabis) until it’s fully legal. It’s not worth the risk.” The catch has been that VCs looking at marijuana risk have considered it differently from a user worried about getting caught breaking the law.

For starters, few Silicon Valley heavyweights have established reputations as prudish about drug use. In a dark irony, proximity to marijuana has not been closely associated with Silicon Valley’s drug problems, which have veered toward harder territory. “Drug abuse in the tech industry is growing against the backdrop of a national surge in heroin and prescription pain-pill abuse,” reported the San Jose Mercury News last year. “Treatment specialists say the over-prescribing of painkillers, like the opioid hydrocodone, has spawned a new crop of addicts — working professionals with college degrees, a description that fits many of the thousands of workers in corporate Silicon Valley.”

For investors, the key problem with legal prohibitions on marijuana has been their limitation of its market to cash — a problem other startups in tension with the law characteristically lack.

“While venture capitalists invest millions in Uber and Airbnb, which often operate in violation of local laws, they won’t invest in pot,” the Chronicle added. “Breaking a city’s ordinance means fines. Flaunting the federal government’s marijuana prohibition can get you a knock on the door from unsmiling men in dark suits. But valley investors are starting to grow less reluctant.”

Even a little interest could go a long way. Momentum has been steadily building in favor of marijuana use, in technology and culture, as well as in politics and law enforcement. In Silicon Valley, one small turn toward greater acceptance of recreational pot would probably have a gear-like effect on pot’s status in other areas, advancing the cause of legalization apace.

By Brian Calle

I recently talked to Judge Jim Gray, Libertarian vice presidential candidate, about the legalization of drugs, border security and immigration. Gray is a retired Superior Court judge from Orange County. The first part of my interview is here.

By JOHN SEILER

Call me a bleeding heart, but I think prisoners should be treated humanely. In most American prisons, they’re treated like animals — actually, the ASPCA would get anyone who treated animals like that arrested for cruelty.

But given that prisons are run by government, they cost way too much. It costs $44,563 a year to house the average prisoner in California, about the same as an education at an exclusive private college, such as Stanford University. The main cost is exorbitant prison-guard pay, perks and pensions. About one in 10 guards makes more than $100,000 a year.

It’s not surprising that Gov. Jerry Brown himself is imprisoned by the guards union. Reports the Bay Citizen:

But the governor momentarily shelved his doom-and-gloom message Monday when he addressed a rally at the capitol organized by the state’s powerful prison guards’ union, the California Correctional Peace Officers Association, and Crime Victims United, a victims’ rights group.

“I hope you’ll tell some of your legislators that we’re going to need some money,” Brown said.

“You can’t run a prison … on hot air,” he said. “You’ve got to run it with real money.”

No kidding. But why is it that prison pay, perks and pensions are so invulnerable? We know the reason. The Bay Citizen continues:

The remarks come less than a week after Brown’s administration negotiated a new contract with prison guards, which the nonpartisan Legislative Analyst’s Office said “would result in significantly lower savings” than had been budgeted.

Under the terms of the deal, prison guards would be required to take one unpaid day off every month — the equivalent to a 5 percent pay cut — and CCPOA members would be required to make additional contributions to their retirement.

That’s a nothing reduction.

How About Drug Decriminalization?

Brown also refuses to even consider creative solutions to prison overcrowding and cost, such as decriminalizing drugs. Tens of thousands inmates are non-violent drug offenders. According to Alternet:

The cost of corrections in California is staggering. Gov. Brown’s proposed Fiscal Year 2011-2012 budget funds the prison system to the tune of $9.19 billion, nearly 7.2% of the entire state budget. And the war on drugs is responsible for a hefty portion of it.

The state prison system holds a whopping 144,000 inmates, including more than 28,000 drug offenders and more than 1,500 marijuana offenders. Of those 28,000 drug offenders, 9,000 are there for simple drug possession at a cost of $450 million a year, or about $4.5 billion over the past decade. That figure doesn’t include the cost of re-incarcerating parole violators who have been returned to prison for administrative violations, such as failing drug tests, so the actual cost of drug law enforcement to the prison system is even higher.

Brown has been trying to shift some of this burden to local governments. But the real solution is to end the criminalization of drugs and turn loose non-violent drug offenders. Those who abuse drugs should be treated by family, friends, churches and voluntary programs — not violent arrest and imprisonment costing billions a year.

Brown campaigned last year as a candidate combining both the innovative spirit of his first governorship 30 years ago and the experience, now, of decades in politics. So far, he has shown himself to be just a burnout beholden to his union campaign contributors.

Too Many Prisoners

America imprisons more people per capita than any country on earth, even communist countries. It has become a police state, with far too many people behind bars. Incredibly, one in 31 Americans is behind bars, on parole or on probation.

Prisons and jails should be only for violent offenders. But unfortunately, America’s two-party system has produced two pro-incarceration parties. Republicans are obsessed with being “tough on crime” — even on victimless crimes such as drug use. And Democrats have become identical to government-employee unions — including police and guards unions.

Up until about two decades ago, some reason and debate prevailed. Republicans, although “tough on crime,” cared about keeping budgets reasonable. And Democrats were concerned about the rights of the accused and inmates, which often put them at odds with police and guards unions.

No more. Barring the occasional budget-conscious Republican or ACLU-Democrat, there is bipartisan consensus to arrest and lock up almost anybody, with constitutional rights to due process severely curtailed and every demand for increased police and guards pay met.

With the system creaking due to overcrowding and busted budgets, now would the the time for reform — if we had a reform-minded governor.

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