With the recession grinding on, just about everybody is ready for the sweet smell of success to fill the air.
In the infant business of medical marijuana, the sweet smell is spreading.
Success, however, remains elusive.
More than a dozen states have approved the use of pot with a prescription, and similar legislation is under review by the Illinois General Assembly, where the state Senate voted Wednesday to approve a measure. Although the federal government outlaws the cultivation, possession and sale of the drug, it has indicated that state rules will prevail.
But the details remain hazy, the legal landscape a daze and the big business interests that might be expected to pay attention seem to keep forgetting about it.
That drowsiness and confusion in the marketplace hasn’t deterred the intrepid entrepreneur. In California, dispensaries are popping up on city streets, giving new meaning to the phrase “retail joint.”
Now along comes the publicly traded Medical Marijuana Inc., with a chief executive who is euphoric about the prospects for a business that isn’t entirely legal — yet.
“I think we’re the next Microsoft,” said Bruce Perlowin, CEO of the new company, which trades for less than $1 on the off-exchange pink sheets. “I think we’ll be the fastest-growing billion-dollar company in history. It’s a huge industry.”
Perlowin knows a lot about the marijuana business, having served 9 years in federal custody for his role in a smuggling ring during the 1970s and early 1980s. He also knows a lot about marketing, he said, after building several companies that attracted all sorts of attention.
His spirited promotion of an “Energy Wellness” machine, for instance, attracted federal prosecutors, who charged him with selling an unapproved medical device. Perlowin pleaded guilty last year, but didn’t receive any additional prison time.
A public company with a criminal in the executive suite is nothing new — Martha Stewart springs to mind — and Perlowin believes his background gives him status among operators of dispensaries. “I am the legend,” he said. “It helps to sell our stock.”
Perlowin is not alone in his belief about a bright future for medical marijuana. Terry Patton, a veteran of the Chicago Board Options Exchange, is laying the groundwork for a related venture. And lots of small-time entrepreneurs have organized co-ops, cafes and storefront outlets with an eye toward a bigger opportunity ahead. With state and local budgets running huge deficits, the key will be figuring out how to harness a business awash in under-the-table cash so the tax man can get his cut.
Perlowin’s company is pushing a debit card that would automatically segregate tax revenues. “You make more money by paying your taxes and doing it legitimately,” Perlowin said. He also wants to introduce potency ratings, seminars for doctors and merchants, turnkey software systems and, yes, a clothing line.
So far, he has little competition. Walgreens, CVS and other major retailers routinely handle prescription narcotics recognized by the Food and Drug Administration, but not pot. “At this point, it’s not an issue for us,” said Walgreens spokesman Robert Elfinger.
As Perlowin sees it, that leaves an open field for his 2-month-old company: “It’s like the wild, wild West.”
By Greg Burns