How to Get Rich in the Medical Marijuana Business (or Go Broke Trying)
Inside a conference room at a Sheraton Hotel in Miami, Bob Calkin paces in front of a small stage, holding a microphone. The 50-year-old Los Angeles cannabis hustler with '80s rock-band hair flies around the United States, charging folks $299 a head to learn how to make a fortune dealing po — sorry, "dispensing medicine." Before 9 o'clock on a Saturday morning, 150 wannabe marijuana barons have filed in for a ten-hour crash course put on by Calkin's company, Cannabis Career Institute. He's just raked in $45,000 for a day's work.
"If I was going to get a business license for my marijuana delivery service," he tells the audience suggestively, "I would not put 'marijuana delivery service' on the form. That is incriminating myself unnecessarily on a public document. I would jot down 'delivery of home health care products.' It's innocuous but honest."
How to Get Rich in the Medical Marijuana Business (or Go Broke Trying)
His talk hints at the weird world of the medical marijuana biz. Pot is still illegal at the federal level but legal as medicine in 21 states and as a recreational drug in two. Meanwhile county, city, and town governments are all struggling to regulate an industry that has suddenly transformed from outlaw venture to respectable business.
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This November, Florida could become the 22nd state to legalize medical marijuana if more than 60 percent of voters approve an amendment to the state constitution. The ballot language removes state criminal penalties for patients who have a "debilitating medical condition," for their physicians and caregivers, and for any "medical marijuana treatment center" that registers with the state. The amendment specifies that the health department will have six months to set up regulations — including a definition of how much pot is an "adequate supply" of marijuana per patient — and nine months to start issuing patient identification cards.
A "debilitating medical condition" is defined in the amendment to include HIV, AIDS, hepatitis C, Crohn's disease, Lou Gehrig's disease, Parkinson's disease, and "other conditions for which a physician believes that the medical use of marijuana would likely outweigh the potential health risks for a patient."
Assuming the amendment passes — and there's a good chance it will, as polls are clocking support between 64 and 78 percent of the vote — anyone who starts a medical marijuana business could make an astronomical amount of money. In Colorado, sales of medical marijuana were $328 million last year. In California, $1 billion. A study by Florida's Department of Revenue estimates that sales here would be $137 million to $5.6 billion a year.
Wannabe entrepreneurs are salivating. Calkin sold out three seminars and plans eight more from now until Election Day.
At the Miami event March 15, dolled-up women in business suits and designer handbags sat next to scraggly Rasta dudes with long dreadlocks. Lawyers, doctors, and bank officers shared space with general contractors, handymen, and guys like Dennis Vallardis, a sunburnt lobster fisherman from Key Largo.
"I'm here to find out how I can make money and create jobs," Vallardis states.
Commercial real estate investor Mark Santiago, 42, says he'll open a medical marijuana business near Midtown Miami and claims to have an advantage — "decades of experience in the cultivation of high-end cannabis." He's already inked a deal with Calkin to be the institute's point man in South Florida. "I have eight figures in the bank," Santiago brags. "I'm ready to ramp up and run with the big dogs."
Then again, the whole anticipated pot boom could, in fact, be a bust. Much depends on how rules and regulations get structured at various levels of government. As history has shown in other states, there might be huge opportunities but also hurdles and pitfalls.
One thing is certain: Making it big in the weed biz is going to take more than converting Junior's bedroom into a greenhouse.
Step 1: Know your medical marijuana history.
Floridians only now have the chance to vote on medical marijuana because of one simple reason: money. It takes at least three to four Brink's trucks stuffed with Benjamin Franklins to successfully gather signatures of legitimate voters, place the measure on the ballot, and then get out the vote. California became the first state to legalize medical marijuana in 1996 thanks to six billionaires who bankrolled the $2 million campaign. Twenty more states have since joined the party.
People United for Medical Marijuana, Florida's largest pro-pot organization, was on its third try in early 2013. The group had collected only 31,193 signatures and needed 555,618 more. It would be impossible to meet the goal without a major cash infusion.
But People United had public opinion on its side. It commissioned a poll of 600 registered voters, and the results turned out to be mind-boggling. Seven out of ten Floridians — Democrats, Republicans, and Independents — supported legalization.
Ben Pollara, campaign manager for People United, flipped open his Rolodex. A Miami-based government consultant who'd advised Hillary Clinton and Barack Obama, Pollara landed on John Morgan, a prominent Orlando-based trial lawyer who had bundled $672,000 for Obama's reelection.
"Ben showed me the poll results," Morgan says, his syrupy Kentucky drawl oozing through the phone line. "Seven out of ten. I like those odds."
Morgan tells New Times he supports medical marijuana because it helped relieve his quadriplegic brother's pain. "He'd have violent back spasms," Morgan recalls. "Marijuana was the only thing that worked for him." His late father, who suffered from cancer and emphysema, also used marijuana. "He was tethered to machines and on all these drugs that he had no appetite," Morgan says.
Morgan formed a new political action committee called United for Care and raised close to $5 million through his law firm and family members. The only other major donor is Coral Gables philanthropist and Democratic fundraiser Barbara A. Stiefel, who kicked in $250,000. Morgan became the face of the campaign with radio and television spots all over Florida.
Republicans allege that Morgan hijacked the medical marijuana initiative to help his high-profile employee, Charlie Crist, win back the governorship from Rick Scott.
"It's an issue that the Democrats can use to pump up the youth vote," Alex Patton, Gainesville-based Republican political consultant, told Businessweek. Rick Wilson, a Republican strategist backing Scott, called the medical marijuana initiative a "game changer" for the 2014 election.
Legendary flip-flopper Crist signed the Marijuana Growhouse Eradication Act into law when he was the Republican governor. Now, he is running as a Democrat and is all for medical marijuana.
Morgan vehemently denies using the medical marijuana issue to benefit Crist. "If that were the case, I'd just write Charlie a check and go home," Morgan says. "I am not Machiavellian, as some people make me out to be."
If the amendment passes, Morgan insists he'll leave the financial profit to everyone else. "But once it's legal, I'm done. I can't grow Philodendron, much less marijuana, so no — I won't be getting in the business."
Step 2: Go to cannabis "training school" — maybe.
Dropping hundred-dollar bills on medical marijuana classes may seem like a good idea, and some school operators are already making a mint. But David Jones, communications director for the Florida Cannabis Network, a Melbourne-based nonprofit organization, cautions: "Some are trying to be perceived as experts and take advantage of the ill-informed."
Some classes may offer real insight; others could be just puffing smoke. Calkin says his Cannabis Career Institute can teach people how to create a business plan, find business partners, and recruit growers who can cultivate high-quality marijuana. Once students have paid their $299, they can attend as many seminars as they want. "In the marijuana industry, it is all about networking," Calkin says. "Some people won't work with you unless someone they know vouches for you. We introduce you to those people."
Yet it sounds like he has a low bar for who qualifies as an expert: "You can even become a consultant too after attending one seminar. You can start charging other people to teach them."
After serving the longest prison sentence ever (30 years) for a marijuana trafficking offense, Robert Platshorn has become the pitchman for making weed available to senior citizens. He's made a documentary called Should Grandma Smoke Pot? and is a public speaker on the topic.
In late March, Platshorn hosted his own seminar, called "Legal in Florida Medical Marijuana Business Conference." Held in West Palm Beach, Platshorn's event sold out despite the fact he charged $100 more per head than Calkin does. "I brought in the most successful experts from in and out of state to tutor Floridians on the hard facts involved in starting a real cannabis business," Platshorn says.
One of his featured speakers, Jeremy Bufford, claims to be the founder of Florida's first "brick and mortar" medical marijuana education center. A 33-year-old self-described businessman, Bufford incorporated Medical Marijuana Tampa in February, listing a corporate address that leads to a building with a church on the first floor and empty offices in the floors above it. His website shows that he offers medical marijuana courses online for $499, run by two "professors," one of whom was the valedictorian of Oaksterdam University, a grow school in Oakland, California.
Back in March, Bufford told New Times that he was opening a Miami campus this month and that he will operate 15 dispensaries in Florida. "There's no substitute for book learning, and since they're going to be selling some of their product back to us, we have a huge stake in our students' ability to grow pot well," he says. "We issue grades, we have homework, and you've gotta put some effort into this."
Rachel Dyaos, Medical Marijuana Tampa's director of operations, now says the company is no longer going to open a Miami "brick and mortar" school. Instead, it will hold a two-day intensive seminar (sound familiar?) on May 17 and 18 in Miami. However, she could not release the location just yet. "We haven't signed a contract with the banquet hall," she says.
Step 3: Watch out for the feds.
Cannabis universities will probably charge you big bucks to explain what I can tell you for free: Pot is still illegal at the federal level, and that creates a few business problems.
First, banks have been reluctant to open accounts or give loans for marijuana-related businesses, for fears that Uncle Sam will prosecute them for money laundering or aiding drug traffickers.
Also, weed can't legally be transported across state lines because of federal interstate commerce laws. You won't be able to buy weed on the day after the election from a California pot farmer. If the law passes, growers will have to start from scratch here.
That said, the feds have already grappled with the conflicting state and federal laws. In a 2009 memo, Deputy U.S. Attorney General David Ogden essentially said the government will not enforce federal law against people who follow state law, provided they follow these seven commandments:
• Thou shall not possess firearms.
• Thou shall not commit violence.
• Thou shall not sell to kids without a prescription.
• Thou shall not launder money from illegal marijuana sales.
• Thou shall not possess or sell any other illegal narcotics.
• Thou shall not grow more marijuana than the state legally allows.
• Thou shall not have ties to other criminal enterprises.
Agents from the Drug Enforcement Administration are always on the lookout for violators. Between 2009 and 2012, the feds raided more than 100 dispensaries in California. Last November, DEA agents led raids against a dozen Denver medical marijuana dispensaries they suspected of laundering money and trafficking weed out of Colorado. Just this month, the DEA shut down four Los Angeles dispensaries.
Basically, if you are going to open a medical marijuana business, don't do any gangster shit. Any medical marijuana operation that opens in late 2015 has the potential to make plenty of money legally selling bud to qualified patients. This being South Florida, there might be a temptation to act like Tony Montana. Don't do it.
Step 4: Pick a business model.
The constitutional amendment requires that the state set up regulations by May 1, 2015, and issue patient cards by August.
Medical marijuana laws differ slightly in each of the 21 states that have legalized pot, but based on regulations in those states, there will likely be two ways to make money. An individual or a corporation can set up a dispensary, or a "medical marijuana treatment center," that will grow weed and stock the ganja, plus sell other pot products like food, hash oils, and ointments. For mom-and-pop marijuana entrepreneurs, the "caregiver" option typically allows a person who passes a background check to supply weed — excuse me, "provide meds" — to five patients. Florida's proposed amendment expressly prohibits caregivers from sampling a patient's medicine.
The Florida financial impact study shows that at least 250,351 caregivers and 1,789 treatment centers would be needed to service an estimated 417,252 patients.
In addition to allowing for dispensaries and caregivers, 15 states allow patients to grow their own weed, though some impose certain restrictions — if the patient suffers financial hardship, for instance, or lives at least 25 miles from a dispensary.
The Florida Department of Health will likely determine who can grow cannabis plants for patients and how many they can grow. In addition to the health department regulations, the state Legislature as well as individual cities and counties could pile on additional laws.
So how much revenue stands to be made? Once it's determined how many patients will qualify and how much med weed they'll need, you can do the math.
Dispensaries around the country charge $20 to $60 for an eighth of an ounce, the equivalent of about three to four joints, says Kris Hermes, a spokesman for Americans for Safe Access, a national organization promoting medical marijuana. Prices are about on par with street prices in Florida — currently about $50 for an eighth. "In California," Hermes says, "the most potent marijuana can retail at $400 an ounce," he says. "That amount may last one patient two to three months. But another patient could use it up in two weeks."
But patients will have to pay for weed out of their own pockets. Health insurers do not cover medical marijuana. "I don't know of any insurers that have specifically explained why they refuse to reimburse patients," Hermes says. "It could be that marijuana is still illegal under federal law."
Step 5: Partner with someone who is already in the medical marijuana business in another state.
Avoid the headache of having to figure out every potential problem you will face by partnering with someone who's already been through this rigmarole in another state. The benefits are obvious.
Harold Brooks Jr., a Vero Beach dentist, incorporated Marijuana Florida and Marijuana Miami on January 31. "I see a number of people who come in wheelchairs and who have debilitating diseases," he says. "They can't wait for medical marijuana to be legal. They really believe it will help them quit Vicodin and other drug dependencies they have."
When he gets into the business, he's got an experienced hand to count on. His son, Steve Brooks, owns two dispensaries and four grow facilities in Colorado. "He's planning to open two more dispensaries and just opened a store for recreational users," Harold says. "He loves Miami and would love to open down there if medical marijuana becomes available."
Via telephone, Steve Brooks says he was building high-end single-family homes until a building boom went bust about four years ago. He partnered with two other builders to open their first dispensary in Denver in late 2010. "I got into this business not knowing anything about it," Steve says. "I had never grown a cannabis plant in my life, and I had never run a retail business. I hired a company to manage and consult on the grow end, and I hired the right people on the retail side."
Things that are basic daily tasks for normal retail businesses become far more complicated in the pot world. Like simply making deposits. Steve says he was lucky to find a local bank, which he would not name, willing to let him open an account. "The bank we're with doesn't do it out in the open," Steve says. "If they did, they would be flooded with applications from medical marijuana companies."
His dispensaries don't accept personal checks, and though he's working with his bank to accept credit card payments, he deals primarily in cash for now. Steve declined to say how much he brings in per day but revealed that he hired an armored truck service to pick up money daily. "However, the federal government put pressure on the armored truck industry to stop servicing us," Steve says. "They have made it more dangerous for the public and the business owner. Now we use a security company to courier money, but we would prefer the armored truck."
Step 6: Retain a lawyer who knows the medical marijuana industry.
In South Florida, attorneys are coming out of the weed fields to offer their expertise. Usually, you can run into barristers like Jeff Feiler, a Kendall-based criminal defense lawyer, at the cannabis seminars. Feiler, a snow-haired litigator with a shiny gold Rolex on his wrist, says he is launching a practice devoted to the medical marijuana sector.
In 2009, Feiler's daughter Allison Feiler and his ex-wife, Miami-Dade County Court Judge Loree Schwartz Feiler, opened a dispensary in Denver called Green Tree Medicinals. "As their attorney, I helped them navigate the laws in Colorado," Jeff Feiler says. "I made sure they knew what had to be done to meet the rules and regulations." Today Green Tree is about to open a fourth Colorado store.
Attorneys with strong ties to the National Organization for the Reform of Marijuana Laws are also gearing up for the coming crop of cannabis captains seeking consiglieres. Norm Kent, a Fort Lauderdale lawyer who sits on NORML's board, and his law partner Russell Cormican recently incorporated Florida Cannabis Consultants LLC. Paul Petruzzi, a Miami lawyer who's been a NORML member for ten-plus years, launched a Facebook page to promote his new side gig, Florida Marijuana Licensing LLC.
In April, Julian Stroleny and Christopher Pagan, a pair of 29-year-old litigators, quit their jobs at the Miami-Dade State Attorney's Office to get in on the pot boom. Pagan, who grew up in Fort Lauderdale, prosecuted serious felony cases such as shootings, rapes, and drug trafficking. Asked how many grow-house cases he prosecuted, Pagan replied, "Too many, unfortunately."
Stroleny, a Coconut Grove native, handled misdemeanor drug cases and DUIs. "A high percentage were cannabis cases," he affirms. "In Florida, you can't claim medical use as a defense. The constitutional amendment [will change] that."
Stroleny and Pagan quit to get into medical marijuana consulting for the same reason everyone else is: cash money. Stroleny says his father recently passed away and he now has to help his mom and brothers. Pagan says he's having a baby.
"The State Attorney's Office doesn't pay very well," Stroleny adds. "We get paid less than a school teacher. We found ourselves in a position where we had to provide for our families."
Step 7: Start lining up voters — who could become your patients.
John Morgan says, "If I need to come back in 2016" to reintroduce a medical marijuana initiative, "I'll do it," but he doesn't think he'll need to — "I am absolutely confident [the constitutional amendment] is going to pass."
His campaign manager, Pollara, offers a more sobering view.
"I have data that shows it's going to take a massive effort to bring supporters to the polls and educate very reliable voters who haven't taken a solid position yet," Pollara says. "This is going to be a statewide campaign, with advertising in every major market in Florida and a massive door-to-door operation."
Some wannabe dispensary owners realize they'd be wise to help push voters to the polls. So they're setting up nonprofits to collect donations, creating campaign material, and recruiting volunteers. Contact information they gather could help them identify future patients.
At the March 15 cannabis seminar, one operator set up a table to sell T-shirts stamped with his nonprofit's name, Florida Cannabis Care, and logo depicting a red cross superimposed on top of a marijuana leaf hovering over a green map of the state. A 25-year-old thin man with short blond hair and "Florida Boy" tattooed on his hand, "Joey Pink" (he asked that we not use his real last name) had trekked 173 miles from Melbourne to hawk his T's at $20 a pop.
He said proceeds would be used to sponsor voter registration events. "We want to make sure we do our part," Pink says. "We need to educate the public, especially the older generations, about the benefits of medical marijuana."
Pink says Florida Cannabis Care will provide caregivers. He doesn't want to operate a full-blown dispensary. "I really didn't know anything about the business," Pink says. "I figured out this is what I wanted to do when I attended the Cannabis Career Institute seminar in Orlando."
Other nonprofits, like Miami-based Florida Health Initiative, have launched websites to find volunteers and pick up donations. Cofounder Mario Verde says his group is creating campaign literature and lobbying in Tallahassee. "People are going to get their marijuana any way they can," Verde says. "That is the reality of it. When it is legal, at least you know what growers are putting in it."
Step 8: Line up your own money, your family's money, your friends' money — and probably some loan shark money too.
On a chilly February evening in the Mile High City, John Knapp unlocks the door to a red-brick, 90,000-square-foot warehouse. A security camera monitors his movements. The dank, earthy aroma of marijuana plants growing in a controlled environment greets visitors with the subtlety of a six-foot-bong hit. The 28-year-old owner of Good Meds, a 3-year-old company that operates dispensaries in Boulder and Denver, gives a tour of his facility. He walks through a door with a sign warning that the grow room's atmosphere is "oxygen deficient."
There's certainly a lot of photosynthesis going on. An array of LED growing lights bathes the room in a dusty golden hue, nurturing a compact forest of marijuana plants. "We have about 4,000 plants in the warehouse at any given time," Knapp says. Though he won't give a specific number, he says monthly revenues are "several hundred thousand dollars."
However, Knapp says the cost of running a medical marijuana operation runs in the six figures as well.
That is the hardest lesson that upstart medical marijuana business owners fail to heed: It's not a simple matter of throwing up grow lights in a warehouse, planting a crop, and then smoking a joint watching the plants grow. A successful operation requires all the money and gold coins in Scrooge McDuck's bank vault and more.
To get a license in Colorado costs $3,000 to $14,000, and additional licensing fees can total about $8,000.
The state requires that every licensed medical marijuana facility must have a closed-circuit security alarm system on all perimeter entry points and perimeter windows installed by an alarm installation company approved by the enforcement division. The surveillance has to be done by a security company that must also be authorized by state regulators. Medical marijuana businesses also have to put in motion detectors, pressure switches, and panic alarms.
Knapp and his partners have spent $60,000 putting up a security system that met the standards of Colorado's marijuana enforcement division.
"We're not even close to having all our cameras up," Knapp says. "Every time we turn around and go on a bigger scale, it's ten G's here or ten G's there."
They spent $500,000 in electrical upgrades to expand the operation. "We've scaled up our environmental controls, which cost us $250,000," Knapp says. "We have to epoxy the floor in our drying room. It's only 2,200 square feet, but the lowest quote was $8,000."
Medical marijuana pot businesses have to find capital for buildings, seeds, equipment, computers, and all other startup costs through nontraditional lenders. With banks cautious about being prosecuted for money laundering and Wall Street investors just now starting to take chances on a small handful of startups for the same reasons, entrepreneurs like Knapp are forced to turn to family and friends.
"You can't go to the bank for anything," says Mark Santiago, the Miami commercial real estate broker partnering with Calkin. "That is why organized crime and shady entities have penetrated the market. Honest investors aren't diving in, leaving the market ripe for those other fucking idiots."
It's good to have an angel investor, a wealthy family member, or a loan shark — one who has a high tolerance for risk.
"You have to convince people to be more risky with their money if it all goes to shit," Knapp says. "An investor could lose all his money."
Step 9: Prepare to lose it all.
Ah, yes. It's easy to get lost in green dreams, but in truth, they could crumble. The rollout of a medical marijuana program could get bogged down by any number of foes: the Republican-controlled Legislature, Gov. Scott if he gets reelected, or local governments.
On its face, the potential tax revenue looks like red meat for politicians. California charges 7.5 percent sales tax on medical marijuana, generating $58 million to $105 million. Many cities charge a local sales tax on top of this. Colorado charges 2.9 percent sales tax on medical marijuana and collected $6 million in the last six months of 2013. (Colorado taxes recreational pot, which was made legal in January, at 25 percent; it should bring in $45 million to $98 million by the end of the year.) In Florida, medical marijuana could bring in $19 million to $337 million per year in taxes.
But consider what happened in New Jersey. In 2010, the state passed a medical marijuana law that had no provisions for patients to grow their own pot. This forced them to wait for dispensaries to open. But Gov. Chris Christie, a staunch marijuana opponent, limited the number to a mere six. Four years after medical marijuana was legalized, just three of these dispensaries have business licenses, and only one is operational. And access to medical marijuana is limited to those having certain diseases or those with terminal illnesses who are expected to die in a year. New Jersey has only 1,500 patients — who get charged $200 just to obtain a medical card (whereas other states charge $5 to $15). The 2013 study prepared by Florida's Department of Revenue estimates that if a similar scenario played out in Florida, only 452 patients would qualify during the first year.
In California, the state that pioneered the medical cheeba industry, bust followed boom. The state legalized pot in 1996. There were essentially no state regulations on dispensaries, so thousands opened. In 2007, the L.A. City Council sought to limit dispensaries to the 186 that were already in business, but resilient entrepreneurs discovered a loophole. Soon, there were more than 1,000 dispensaries across Los Angeles alone — on almost every block, near schools, everywhere. In 2012, 63 percent of voters supported a measure to limit dispensaries to the stores that had registered before 2007. The City Attorney's Office is now moving to shut down 970 dispensaries.
In San Diego, the City Council voted to keep no more than 36 dispensaries. Some cities, like Oakland and San Francisco, have enacted clear-cut rules that dictate where dispensaries can operate and tack on fees for local government.
In Florida, the Legislature or local municipalities could decide how many businesses will be allowed to open. Some local governments may opt not to allow any medical marijuana commerce at all.
And medical marijuana businesses will have to be wary of legal challenges. Michigan approved medical marijuana in 2008, but when two store owners appealed a civil case against their business, the case went to the state supreme court, which ruled that Michigan's 2008 medical marijuana law "does not contemplate patient-to-patient sales of marijuana for medical use." This left an opening for patients and caregivers to grow weed but essentially outlawed dispensaries, and many shut down.
Maggie Volpo, a state marijuana activist, wrote in her blog that she had no choice but to close. She and her husband lost their life savings.
Step 10: Start a penny stock company servicing the medical marijuana industry.
Bah, forget the first nine steps. Building a medical marijuana empire doesn't require so much hard work. Just claim you have a publicly traded business in the marijuana industry and you can reel suckers in with the promise of sizzling stock options. In the past year, Pink Sheets investors have gone bonkers for penny stock companies that have some type of marijuana angle. John Veit, Cannabis Career Institute's vice president, says roughly 60 companies claiming to be in the pot or hemp business offer publicly traded stocks on the over-the-counter bulletin board and Pink Sheets.
"Some are legit," Veit says. "Some are just a couple of dudes in a room who put out a press release on PR Newswire, hoping they get on the news so people get interested in the stock. In terms of volume, I've seen pot stocks make gains of 600 to 3,000 percent," Veit adds.
The problem is, penny stock companies don't have to put up with the pesky federal scrutiny that GM and Facebook go through, like filing audited financial quarterly reports on time or, you know, not lying to potential investors. "You can say you just bought a 1,000-acre hemp field in China," Veit expounds. "You can say you developed a new gizmo that hooks up to a state patient verification system. You don't have to prove it is true to anybody."
Coral Springs-based Cyber Kiosk Solutions Inc. trades under the symbol CYBK. On February 12, Cyber Kiosk sent out a news release announcing that Irwin "Izzy" Zalcberg, a "well-known small cap investor with a large rolodex of connections in the upper echelon of the corporate world," invested $1 million in the company. Zalcberg "took time from his vacation overseas to complete the transaction," the release gushed. A quote attributed to Cyber Kiosk Chief Executive Chris Clarke said, "Mr. Zalcberg obviously recognized the unique opportunity and value that our age/ID verification and fraud prevention software provides for the legalized marijuana industry."
Two weeks later, another news release proclaimed the firm "received commitments from marijuana dispensaries in New Jersey and Colorado with nine total locations to beta test the company's age/id verification and fraud prevention software." Cyber Kiosk included a disclaimer that "CYBK will not release the name of the dispensaries until final testing is complete." How convenient.
The stock's price bounced from 11 cents to 33 cents seven days later, before dropping to 20 cents, then 15. A visit to the company's Coral Springs headquarters revealed an empty office. The company's website is pathetically generic and has no information about software for marijuana dispensaries. According to the company's September 2013 quarterly report, Cyber Kiosk was a limousine company servicing Jacksonville from 1997 until 2012. At the time, the company had a balance of negative $370 in its checking account.
Initially, Cyber Kiosk CEO Clarke did not want to comment. After several attempts, he recently gave a brief telephone interview.
Clarke insists his company is a legitimate technology firm servicing the medical marijuana industry. "We are not a fly-by-night company," he says. "We believed we could expand into that industry and make money. We have a very good business plan."
Despite Cyber Kiosk's prolific news release, Clarke says he isn't looking for ink. "I'm not even interested in you doing an article about us," he concludes. "Maybe in May or June, we can sit down. Send me an email."
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