Josh Gordon would cut a dashing figure in a suit. He grew up in Miami, Fla., as the son of two private wealth managers and saw himself going into the same field. He enrolled in Fordham Graduate School of Business, moved to the Upper West Side and had some interviews for jobs with investment banks.
But, it turns out, a suit’s not his style.
It was at Fordham that, for a class project four years ago, he did research into the new legal marijuana economy. Some people’s eyes get red around marijuana; Gordon’s filled with dollar signs. The budding economy was in need of some refinement, and he saw a plan.
He soon built a prototype: a sleek tin carrying case for joints — something that would do for doobies what the velvet bag does for Crown Royal.
“You go into a dispensary and buy $100 worth of cannabis and it’s coming in that bag you got when you were going to school,” the 27-year-old says in a glass-lined conference room on West Broadway.
His dad, whom Gordon calls “a conservative guy” who retired from Wall Street five years ago, was skeptical at first. But he eventually joined Gordon to put in an initial $60,000 and raise $500,000 in seed capital to start Bureau (formerly known as Rodawg), which wants to position its marijuana storage devices as a lifestyle brand for dispensaries and users, on par with the likes of John Varvatos and Godiva chocolates.
They’re far from the only ones who are seeing through what used to be the hazy future of pot-related businesses.
At a Crain’s New York Business breakfast meeting last week, a conference room was packed with more than 200 people mingling — chatting about training for marathons while clicking away at iPads or reading copies of the Economist. They’d all come there to talk about a topic that used to be limited to locked dormitory bathrooms and hula-hooping Grateful Dead circles: marijuana.
The stakes, as advertised at the event, were “high.”
But the attendees were certainly not.
“I remember when we went to our first trade show in 2011. Everyone was just simply getting stoned,” says Richard Yost, a Staten Islander who founded Ideal 420 Soil, a company that develops planting soil specifically for marijuana. “Now you go to a trade show and it’s a completely different ball game . . . We’re sophisticated businessmen.”
That huge whooshing sound you hear? It’s not a Columbia student doing a rip off a 4-foot bong — it’s the sound of traders, bankers, lawyers, entrepreneurs and a lot of generally buttoned-up individuals rushing to get a hit from what is a rapidly maturing, and already incredibly lucrative, industry.
Goodbye Shakedown Street, hello Wall Street.
The national legal marijuana market is worth $1.53 billion, according to a November 2013 report from ArcView Market Research, a San Francisco-based investor group focused on the marijuana industry. In five years, that number is expected to leap to more than $10 billion.
New York joined 22 other states, including New Jersey, when it legalized medical marijuana in July. (Marijuana remains illegal under federal law, but the Obama administration has said it won’t go after states that have approved it.)
New York is still 16 months away from launching its medical marijuana program. (Unlike other states, New York will only allow ingesting it through pills or edibles.) But the business community is already thinking light-years ahead of regulators.
Dave Bernstein of Fair Lawn, NJ, saw a news report from a cannabis-industry job fair in Colorado and immediately saw an opportunity.
“[The report showed] the line literally around the block. They said it was an hour-and-a-half, two-hour wait to get into the job fair,” he says.
This summer, Bernstein, who runs an electronics recycling business, launched weedhire.com, which is like the monster.com for jobs in the cannabis industry.
The site now has more than 350 job listings, including five in New York at press time. With more than 3,600 registered users, it is attracting high-quality job seekers, such as alumni of companies like Microsoft and Johnson & Johnson, and features ads for a vast array of positions in security, business and app development and marketing.
As the country gets used to this new industry, everyone is trying to be on their best behavior, so hiring a respectable work force is crucial.
“You make a bad hire, they could be devastating to the industry,” he says.
Lawyers are in high demand, too: Craig Delsack, who usually works with business, media, technology, entertainment and real estate clients, has started advising ancillary businesses — such as security services and medical research companies, which don’t handle any marijuana directly — on how to get started. He’s even reserved domain names, such as cannalawyerny.com, nycannabusiness.com and mmjnyc.com, to go live once New York state’s law takes effect.
“I saw it coming eventually,” he says in his office near Columbus Circle.
The new wave of professionalized marijuana-related businesses comes with its own buzzwords: Bernstein is part of the “pot-com” boom; others starting up new businesses are “ganjapreneurs.” Almost universally, people in the field have adopted “cannabis” as the preferred term; it sounds clinical and adult, less glib than “pot” and not as sticky with cultural resin as “marijuana.”
Smoking pot makes you sleepy, but talking about it sure seems to make people excited.
“I’ve been an entrepreneur my whole life. I don’t think I’ve ever been so energized to get up and go to work every day,” says Yost, who is the son of a narcotics officer.
“The exciting part is the fact that it’s fresh. We’re playing with the clay while it’s still wet.”
And it’s a fresh industry like no other: Unlike, say, Facebook, which had to create a whole new need and market for its product, the customer base for cannabis has existed for generations.
“There’s no learning curve people need to go through. It’s an emerging market on the backbone of a developed market,” says Derek Peterson, director of the East Coast cannabis division for Terra Tech, an agriculture technology innovator that’s opened a 5-acre, $4.5 million hydroponic greenhouse in New Jersey. “There’s real money coming into the industry now: hedge funds, Wall Street types. People feel a lot safer that they won’t be arrested.”
Those Wall Street types were once Peterson’s co-workers. Around 2010 while working at Morgan Stanley, he started toying with the idea of opening a marijuana-related business of some kind. His bosses found out and fired him.
“I either had to choose moving ahead first as an entrepreneur in this business or reverting back to working on Wall Street,” he says.
But after he visited a friend running a legal marijuana growing facility in California and saw him making “$17 or $18 million out of a place the size of a small Starbucks,” he never looked back at stuffy Wall Street life.
For now, the greenhouse in New Jersey is growing regular produce, waiting to switch over to cannabis when the ground is more stable in the state — most likely after fiercely anti-marijuana Gov. Chris Christie leaves office, supporters of growing say.
Eventually, Peterson hopes to yield $18 million to $20 million in gross profits per acre.
“Which is far more than you get growing basil and oregano,” he points out.
Growing a new industry from the ground up means you get to correct the things that went wrong in other industries. Jazmin Hupp worked with limited success for a group that tried to reach gender parity in the tech industry. In August, she started Women Grow, which aims to connect and empower women leaders in the cannabis industry.
“Because it’s brand-new, we have a chance to feature the women in the industry and feature women in the industry doing great things before the story gets written,” says Hupp, 30, who lives in Midtown East. So far, there are eight chapters across the country; the New York chapter launches Thursday.
So what will this new wave of power stoners use? That’s where Gordon’s Bureau comes in.
“We wanted to create a product that would be for more of that discerning socialite,” he says.
That includes the smart-looking metal joint case (smell-proof), a weed storage container that looks like a whiskey glass and display cases for dispensaries that far outclass plastic baggies or repurposed medicine bottles, all with hip names like The Rivington and The Bedford.
Is it only a matter of time before cannabis companies become big movers on the stock market?
“A lot of Wall Street men and women are looking at this with their personal funds and making some investments,” says Adam Scavone, a Manhattan lawyer and activist who advises cannabis-related clients. “The problem has always been a political risk for people in, let me call it, straight society, for lack of a better term. We’ve broken the taboo with the broader discussion.”
The other problem with the industry: Banks are still hesitant to handle money from pot-related businesses, even though New York’s Department of Justice gave them the go-ahead last year, says Hanan Kolko, a Manhattan labor lawyer who has been working with legal issues related to New York’s medical marijuana law.
Who would even want to get involved in such a high-risk field, where you sometimes have to deal in all cash?
“People who are entering this business have a sense that society is shifting in their direction,” Kolko says. “So they want to be the first movers. They want to get in early.”
One of those very early movers was High Times magazine, which was founded in the Cheech and Chong era of the ’70s but recently outshined some competitors in a non-stoner-y way.
“We take our softball seriously,” Michael Safir, manager of the Bonghitters, the softball team of High Times magazine, told The Post after they beat both Forbes and the Wall Street Journal’s teams for the media league championship two weeks ago.
Safir’s day job? Managing director of High Times magazine’s investment fund.