You just have to know when to fold. Well readers we just folded our hand in the game of applying for a cannabis cultivation license. Most potential backers out there want to wait until you have a license to put money on the table. The few resources we found dried up at the last minute. Before I say anything else I need to thank the friends and family who donated funds to get us out to San Francisco to pitch our idea to the social entrepreneurs. It was unfortunate that the conference was so close to the deadline for submitting an application that well-meaning people just didn't have the time.
This past two weeks have been hell. We've worked diligently on the monstrous application for a cannabis cultivation license while friends and co-believers beat the bushes for funds. We've met with other people who want to get into the business (one group is applying for five dispensaries) but our idea of a social enterprise scared them into pallor and apoplexy. “You mean you want to start a low-profit business?” Of course they really didn't understand the concept of putting people and the planet ahead of profits. No matter how hard we tried to explain that the corporation could make as much money as possible, we’re just not beholding to the shareholders to screw the public and the planet to make the most cash possible. Silly us, we thought it was a great idea.
Talk on the street has it that a lot of the companies sending in their tomes of application material by Monday, September 22nd are backed by tobacco industry and other companies or individuals that don’t give a flying fig about anything except profits. Enter Rauner’s idea of how things should work. The former venture capitalist said the lucrative licenses should go to the highest bidders. It’s already working that way.
If Rauner thinks that the current licensing isn't skewed to the highest bidders he’s out of touch completely. Yea OK, he means the money should go directly to the state instead of into pockets not directly associated with the state. Here’s an example of what is the reality of the current process. Well-known Colorado industry people came into town. They were presented with the potential for buckets of money. The aim being the chance to acquire the use of a known name brand, sort of like the marriage of royalty to royalty to gain land or title or whatever. Certainly not illegal but requiring lots of cash to bid. Then there are property owners who have the scarce commodity of a building appropriately zoned to cultivate or put up a dispensary. This situation I know first-hand.
A few months ago when we were star-eyed enough to think we could actually convince people with money to work with some un-financed social do-gooders we found a great site. We did our walk through, we contacted owners, and talked to a potential investor. It looked good until time began to close in and the owners found their telephones and emails overflowing with offers to purchase the site that had been sitting on the market for over eight years. Their response? Everybody send in $25,000 non-refundable, non-exclusive deposits and pay $15,000 per month for the privilege to be on list with other competitors. One of our potential backers dropped out at the mere thought of a non-binding contract. We couldn't argue. One other just refused to succumb to the greed, especially on behalf of a low profit, social corporation.
Lest we forget in several conversations with providers of ancillary services, etc. who have been contacted by applicants, everyone has an uncle or an ex-team mate from college or someone who has an “in” and they are assured of a license. Welcome to Illinois.
So candidate Rauner your idea to make absolutely sure that people with good intentions and sweat equity and know-how but no real capital will be excluded is even better than the current slug fest of dollars. A better idea might have been to insist that all bidders needed to be coupled with a social purpose not just awarded a few points on the application for things like minority owned, environmental concern, etc. especially considering that so many of the applicants had so much money and so much “pull” they didn't think it necessary to even bother with the “bonus points”.
Mr. Rauner if you win the election, give me a call. I have some ideas for the recreational market that really will be biased for the good. They will lean toward increased profit for the state and fairness in the process. Now that’s progress.