On January 1, 2014, Colorado will become the first state to sell recreational marijuana. As revealed in the following profiles of three local ganjapreneurs, pot is big business -- and the (green) rush is on.
Kayvan Khalatbari, Pot Pioneer
I've always been drawn to creative people who are a little offbeat in their thinking but very intelligent," says Kayvan Khalatbari, who, at barely thirty, has become the entrepreneur behind a small chain of pizza restaurants, a nationally recognized MMJ consulting firm and one of Denver's longest-running dispensaries, Denver Relief. All of this has made Khalatbari a key player in a very lucrative industry — but instead of using his profits to create a Walmart of marijuana, he's pouring money into Denver nonprofits, providing scholarships for local students, funding the Colorado Youth Symphony (he's on the board of directors) and becoming a major benefactor of the local comedy scene.
"I've always felt an obligation to give back," Khalatbari explains from his Denver Relief office, after exhaling a monstrous plume of hash-dab smoke. "I've found that being a good person pays back exponentially. I'm surrounded by a plethora of awesome people who would do the same for me that I've done for them if the need arose."
"We said from the beginning that our mission was to help people, not make a million dollars," adds Ean Seeb, Khalatbari's business partner. When the two founded Denver Relief in 2009 with only $4,000 and a half-pound of cannabis, they found they had "a unique opportunity to talk to people about being active in the community," says Seeb. "It was a new industry, so we applied what we knew about community service and social justice to that industry."
These days, catching Khalatbari in Denver can be difficult, since his Denver Relief Consulting firm is in high demand around the country, requiring him to fly from one state to another, helping would-be MMJ dispensaries with paperwork (applications are often thousands of pages long) and advising politicians on the unique challenges presented by the push to legalize marijuana. The night before sharing a dab of hash with us, he was dining with the governor of Illinois, a state that recently implemented a stringent set of MMJ policies.
The consulting firm aims to "give regulators in Florida or North Carolina or Texas access to information about what's coming down the pipe when legalization happens four years or two years from now so they're not scrambling to try and take in that information when the bill is already passed," Khalatbari explains. "In Massachusetts, they took everything from Colorado and Washington before those rules were even finalized, and there are things that don't jibe. So they want people like us to keep these regulators in tune. It's going to happen eventually, and they need the education."
And Khalatbari is prepared with his lesson plan. Not only does selling marijuana provide funds for helping the community, but ensuring access to the plant itself is a monumental service to humanity, he says. Pointing to an array of creams, edibles, waxes, pills, vaporizers and oral sprays spread across his desk, Khalatbari discusses the science behind isolating the different cannabinoids in marijuana for different purposes, explaining that the intoxicating THC can be reduced or removed from a product, leaving what's left to treat chronic pain, anxiety or seizures.
At the same time, he notes, THC can be heightened or altered for varying kinds of highs. "The psychoactive properties of marijuana are only activated if you heat it up," he says, lifting his shirt sleeve to reveal what looks like a nicotine patch. "So we're working with people to create transdermal patches that can bring the non-intoxicating elements — that help with chronic pain — through the skin. I have a herniated disc in my back, and I can apply this patch right there and I'm not going to get high."
Grabbing a small capsule filled with isolated CBD cannabinoids, Khalatbari notes, "These don't get you high at all; it's very lucid. I take these before I do any kind of public speaking, because I get nervous as hell. I sweat, I fumble, I lose my train of thought. But if I take one of these CBD pills, it's like I'm talking to one person when I'm speaking to hundreds."
Khalatbari has been using marijuana to overcome social anxiety for more than half his life. Growing up a first-generation Iranian immigrant in predominantly white Lincoln, Nebraska, with a working mother and a father he rarely saw, he was "a very angry kid," he says. "I was babysitting my brother since I was ten, could never go anywhere. And I was essentially the black kid because of my name: Kayvan Soorena Tyler Khalatbari-Limaki. I was frustrated that I wasn't like other kids."
Khalatbari was so far ahead of his classmates in school that he began skipping classes. "I was rated as the second-smartest kid in Lincoln, but I didn't want to be a mathematician or work for NASA," he says. "I was very stressed and anxious, very bad socially. I hated homework, even though I could do it, and would put it off until the last minute. But when I discovered marijuana, I could be social and do my homework without getting frustrated. It relaxed me and helped me focus."
After graduating early from high school, Khalatbari moved out on his own when he was sixteen, working as a waiter and a pot dealer while also selling knockoff sunglasses and watches on eBay, until he received a cease-and-desist letter from Rolex. "I've always been an entrepreneur," he says. Later, Khalatbari earned a degree in architectural engineering, which came in handy when he moved to Denver to work as a designer of electrical systems.
"I didn't have any friends here," he remembers. "I was looking for something to do, some way to get involved in the community. So I started volunteering with SAFER and Mason Tvert." Working with the marijuana advocacy group, Khalatbari collected 1,500 signatures for the I-100 Alcohol-Marijuana equalization initiative in Denver, later dressing up in a chicken suit to harass "Chickenlooper" for then-mayor John Hickenlooper's refusal to debate marijuana policy.
Khalatbari became friends with SAFER assistant director Evan Ackerfeld, and together they opened the first Sexy Pizza in Capitol Hill. Despite Khalatbari's having no background in restaurants or business (unless you count waiting tables and selling weed and knockoff watches), the pizzeria thrived. Eventually he opened a second location, on South Pearl Street; a third is set to open in February in Jefferson Park. "When Sexy Pizza moved into South Pearl, some people threw a fit and wrote blogs about how we weren't going to fit into the neighborhood," says Khalatbari, noting that he'd opened Denver Relief dispensary a year after the first Sexy Pizza. "But we just had our best week ever at that store. I don't think people understand how many marijuana smokers there are out there. And that's been the beauty of legalization. We're seeing bankers and politicians and scientists and soccer moms all smoking; there isn't a demographic or race or religion that is immune from having this in their culture. It's as commonplace as alcohol."
Soon after he opened his second pizzeria, Khalatbari became interested in Denver's burgeoning standup comedy scene. "I feel so fortunate to have come in when I did," he says, describing how he watched the scene grow from underground shows to last summer's High Plains Comedy Festival, for which Sexy Pizza and Denver Relief were key sponsors. In fact, these days it's difficult to find a local comedy show that doesn't have Sexy Pizza's name attached to it: Khalatbari backs such efforts as the These Things Matter podcast, the Fine Gentleman's Club and the Governor Jack improv team.
"People often think too rigidly in business," he says. "They need to understand that if you involve yourself in your community — whether it's through sponsorship or volunteering or whatever — your community will give back to you." Working with comedian and Denver Relief employee Jake Brown, Khalatbari debuted Sexpot Comedy in November 2012. Presented as an invite-only, after-hours event, the show encouraged audience members to bring their joints, bongs and hash-dab rigs to Sexy Pizza's South Pearl location, where they could enjoy local standup while being as open about their intoxicant of choice as they would be in their own living rooms.
Providing metro residents — as well as an influx of hazy-eyed tourists — with a public place to smoke pot has become Khalatbari's most recent crusade. "There are going to be all these out-of-towners who are going to get busted for smoking in hotels or in public," he says. "You can't tell people they can smoke pot and then give them nowhere to do it. Legislators aren't going to realize it immediately, but after enough people get busted, they're going to look for a solution. And marijuana clubs is where I see that heading. Marijuana, obviously, is going to be huge here, and this is probably the best local comedy scene in the entire country, so naturally those two are going to come together for a common goal."
He's been thinking about opening a marijuana comedy club for a year, but is holding out for the right location. In the meantime, Sexy Pizza has partnered with Comedy 103.1 to move Sexpot Comedy to the Oriental Theater. The monthly series premiered there in December, with nationally known comedians Sean Patton and Mike Lawrence pairing up with local rising stars Ben Roy and Jordan Doll. Around the venue, people could be seen casually lighting joints and pipes, with one group on the balcony huddled around a large vaporizer plugged into the wall. "The cool thing about this show is I see a lighter go off every few seconds," Lawrence observed from the stage. "It's the closest I'll ever get to feeling like Axl Rose singing 'November Rain.'"
Khalatbari's partner in this new edition of Sexpot Comedy is Comedy 103.1 sales manager Andy Juett. Casually pulling on a large blunt outside of the Oriental, Juett attributes much of the successful merger of comedy and marijuana to Khalatbari's relentless work ethic. "You could say he has two or three full-time jobs," Juett explains. "There are so many businesses that have this goal-directed behavior, only focused on a budget or revenue, just tangible elements. But that often stunts innovation. Kayvan is focused on the bottom line, but he also has a very creative mind; he's focused on what the community wants. He's smart enough to know what he doesn't know, and he surrounds himself with people who do. He's immersed himself in the comedy scene; he's not just on the sidelines. Kayvan is really a true pioneer."
-- Josiah Hesse
Dan Williams, Safe Security
For thieves in Colorado, pot is an attractive target.
It's compact. It's valuable. And thanks to the many neon green crosses that have popped up on main streets and in strip malls to advertise Colorado's booming medical marijuana industry, it's easy to find. And it's about to become even easier.
But if pot thieves think that the expected proliferation of recreational weed shops will turn Denver into some kind of ganja Gotham City, they haven't met Dan Williams. The 36-year-old Williams is president of Canna Security America, which specializes in providing security systems for marijuana dispensaries and grow facilities. That makes him the friggin' Batman of the cannabis community.
"One of our clients, he kept having people break through the roof," says Williams, sitting in his office in northwest Denver a few weeks before stores could start selling recreational marijuana. "So he said, 'You know what? When anybody tries to get into this place, I want it to look like Walt Disneyland on the Fourth of July. Just, like, crazy — whatever you have to do to scare the hell out of them.'"
So Williams's crew rigged the customer's facility with motion sensors, red-and-blue strobe lights and ear-piercing sirens. The next time burglars tried to break in, the sensory onslaught startled them so much that they didn't even bother to climb down the ladders they'd brought, opting instead to jump off the roof and run away.
"It scared the shit out of them," Williams says.
Williams founded Canna Security America in 2009. A former marketing specialist by day and bartender by night, he got interested in security when the restaurant where he tended bar asked him to install its security system because he had a computer-science background. That was just after 9/11, and the security field was rapidly expanding on the East Coast, where Williams was then based. Sensing an opportunity, he decided to jump into the business. In 2006 he moved west and got a job at Envysion, a Boulder security company whose first big client was Chipotle. After a few years, he struck out on his own.
His first client was a friend who owns Native Roots Apothecary, a dispensary on the 16th Street Mall that also has a grow facility. After installing systems for Native Roots, Williams began getting referrals for other pot businesses. "We said, 'Why don't we just specialize in it? Nobody else is doing it' — which we were surprised to find," he recalls. "It's one of those ideas where you say, 'This is a really obvious idea, I'm sure somebody is doing it.'"
When Williams realized that no one was, he decided to narrow the focus of his fledgling general security business and change the name to Canna Security America. "What we'd like to do is become the brand name and household name when it comes to cannabis security," Williams says. In other words, he'd like the company to be the ADT of weed. As for ADT itself, the national security company won't go near the stuff. "ADT does not provide services to medical marijuana dispensaries, even in states where they are legal, because they are still illegal under federal law," ADT says in a statement.
But even if it did, it wouldn't have the expertise that Canna Security America has. That knowledge is on full display when Williams's cell phone rings; the call is from a dispensary owner concerned about a rumor that infrared security cameras will ruin his plants.
"It doesn't affect the bloom at all," Williams tells the owner. "It won't hermaphrodite a plant. We've put one right in front of a plant for a month just to try it out."
"Are you sure?" the owner asks.
"I'm positive," Williams says. After making a few more reassurances, he hangs up.
"That's a good example of how we're different," he says.
Williams was not a marijuana expert before he started Canna Security America, but he has thrown himself wholeheartedly into the industry. He believes that a cannabis businessman can't just be a businessman; he's also got to be an advocate. Williams's first lesson in that philosophy came when he approached the Colorado Department of Revenue about the draft of its proposed security regulations for medical marijuana facilities. The draft was based on the security protocols for casinos, which are among the strictest.
Williams didn't think that applying casino regulations to cannabis businesses made much sense. So he requested a meeting with then-Medical Marijuana Enforcement Division chief Dan Hartman. "We walked in and sat down and said, 'Why do you need this kind of camera? What's the purpose of this?'" Williams recalls. "And he said, 'You know what? We have nobody writing these right now, and you guys have a background in writing regulations, so why don't you rewrite them? And if we like them, we'll use them.' And they ended up using all of our edits and changes."
Those edits allowed the cost of the average dispensary security system to decrease from $20,000 to $4,000 or $5,000, Williams says, which made it easier for small-business owners to enter the market. The draft on which he scribbled his notes is now framed and hangs in the hallway of Canna Security America's new office space. The company was able to rent the space thanks to several recent investments, the exact dollar amount of which Williams is hesitant to disclose. But he allows that it's in the hundreds of thousands of dollars and says the company continues to approach investors.
It's going to need the support. Canna Security America is currently operating in Colorado and Washington, which also legalized recreational marijuana use for adults in 2012, with stores set to open this spring; the company recently expanded to Connecticut, Massachusetts, New Jersey and Arizona, all of which allow the use of medical marijuana. But Canna Security headquarters will remain in Denver.
And with good reason. With recreational pot stores now opening their doors in Colorado, Williams expects his company's workload in this state to increase dramatically this year. "We're expecting a lot more volume because of the retail," he says. He's also anticipating setting up more cameras in and around shops — including in parking lots, so owners can watch for out-of-state customers packing their cars full of Colorado weed to sell in states where it's not legal. Advances in technology allow store owners to control the security systems from their smartphones; one program will even text an owner five seconds of video if an employee (or a burglar) goes into an area of the facility where they're not supposed to be.
"Really, it comes down to accountability," Williams says, adding that he'd like to see every pot shop working with the police and providing law enforcement with security footage to help solve robberies and other crimes. "We want this to work. If that takes a little bit more security, we have it."
-- Melanie Asmar
Tripp Keber, Marijuana Mogul
Tripp Keber keeps track of the nicknames that the media has bestowed upon him. The managing director of Denver-based Dixie Elixirs & Edibles, a marijuana-infused-products (MIP) company that produces THC sodas, candies and capsules, as well as a multimillion-dollar investor who has put money into sixteen pot-related businesses, Keber has been called a "marijuana mogul," "the Willy Wonka of weed" and "the Gordon Gekko of ganja." But as you look around his LoDo office, with its exposed-brick walls, cigar humidor, wine rack and flat-screen TV, the image that comes to mind is that of Jack Donaghy, the fictional right-wing NBC executive played by Alec Baldwin on the series 30 Rock.
And the comparison may not be far off. In his younger days, the 45-year-old Keber worked at the Heritage Foundation, a Washington, D.C., think tank that he says is "as conservative as you get." After dabbling in both politics and law and discovering that neither suited him, Keber decided to become what he calls a "serial entrepreneur."
"I look for trends early," Keber says. "I have a very high tolerance for risk."
In 2010, he decided that his next risk would be legal pot. But Keber doesn't think any greedy, weedy businessman label — the aforementioned "Gordon Gekko of ganja," for example — is accurate. "I don't shy away from the fact that I got into this business to profit," he says, "because I did.... But in a very, very short period of time, I realized the power of this plant."
He came to find that the marijuana business was different from his other ventures into technology, real estate and luxury motorcoach resorts — or as Keber describes them, "trailer parks on steroids." Marijuana, he realized, has the potential to make people well. "On any given day, we, as a company — and many times me, personally — receive, at a bare minimum, 'Thank you for creating that new level of wellness, because I have left opiates,' or 'I have left tobacco,' or, more commonly, 'I've left alcohol in my rearview mirror, and now I have a relationship with cannabis,'" Keber says, adding that some people have even credited Dixie Elixirs products with saving their lives. Although he says he's dubious of those claims, "if that doesn't affect you, you're not human."
Keber doesn't regularly smoke pot. While he acknowledges that he's tried it — in fact, he was arrested for marijuana possession in Alabama last summer when cops found him holding a small amount of concentrated THC — his vices tend toward cigars and alcohol. And because he didn't know anything about growing the plant or serving patients directly when he decided to get into the MMJ business, he focused on starting an edibles company.
Dixie Elixirs' first product was essentially a pot soda — a carbonated, THC-infused beverage in flavors such as orange, grape and root beer. Now, nearly four years later, Dixie still sells pot soda, but the company has added more sophisticated flavors, like pomegranate and red currant. It's also developed several other product lines, including pot confections (chocolate truffles, fruit-flavored lozenges and "Dixie Rolls"), cannabis-infused massage oils and bath salts, and even marijuana-extract capsules that resemble vitamins.
The whole time he was growing the business, though, Keber worried that the feds could shut it down at any moment. Since marijuana is still illegal at the federal level, he went to bed every night wondering if the next day would be the one that "some overzealous three-letter agency" got tired of reading about him and decided to end it.
But on August 29, 2013, Keber's fear dissipated. That's when the Obama administration issued a memo saying it wouldn't sue to stop implementation of Amendment 64 in Colorado, or the law legalizing recreational marijuana in Washington. The feds would continue to go after gangs, illegal drug traffickers and drugged drivers, the memo stated, as well as those who sell marijuana to kids or sell it in states where it's not legal. But it specified that "prosecutors should not use the size or commercial nature of a marijuana operation alone as a proxy" for whether the operation was doing the things the feds want to prevent.
Keber took that to mean that in the eyes of the federal government, "there is no such thing as too large a commercial enterprise" — welcome news for a businessman hoping to build a nationwide brand of marijuana-infused products. "That, for me, was a watershed moment," Keber says. "I took my hand off the throttle and said, 'Let's go.'"
Dixie Elixirs was issued a license to manufacture recreational MIPs on December 27, Keber says, the first day they were available. And just in time for the start of recreational pot sales on January 1, the company's products are getting a makeover. The new packaging is classy and adult; the company has traded its see-through glass soda bottles for brushed-silver aluminum ones that conceal the brightly colored liquid. To make the soda even less appealing to kids, the entire bottle is shrink-wrapped in sturdy plastic that Keber doubts a young child would be able to open.
But no matter how ready Dixie Elixirs is for the dawn of this brave new weed world, Keber predicts that it won't be ready enough. "I think we're going to get smoked — pardon the pun — because the demand is going to far outpace what we can manufacture," he says.
Not for long, perhaps. Keber expects the MIP industry to grow at breakneck speed as more and more states legalize pot use; he says he wouldn't be surprised if edibles, which accounted for less than 10 percent of the market in 2010, soon represent half of all cannabis sales. That's why Keber describes Dixie Elixirs as the "crown jewel" of his investment portfolio, which also includes investments in marijuana-related security and software companies, along with other ventures that he declines to name.
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"There are theories that there are going to be billionaires minted from this," Keber says of the legal marijuana market. And while he won't go so far as to say he'll be one of them, he figures he'll know some of those billionaires. Keber has been criticized for saying that he wants to build up Dixie Elixirs so he can sell it for a profit, and he doesn't deny that that's part of his plan; those who think that the big alcohol, tobacco and pharmaceutical companies aren't watching states like Colorado very closely are fooling themselves, he says.
"At the end of the day," he predicts, "they're going to knock on somebody's door and say, 'To whom do we make the check payable?'"
-- Melanie Asmar