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XWatch: dot.LA's Strategy Session Discussion Asks, Is the Green Rush Over?
Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.

California is the world's largest legal pot market, generating nearly $3.1 billion in spending in the Golden State alone. But cannabis-related businesses in the U.S. live in a legal-limbo, operating in this strange gray area between federal laws that make marijuana illegal and states that have decriminalized its use and sale entirely. This has led to sometimes difficult choices, workarounds and issues with which the cannabis and cannabis-linked companies are forced to contend.
dot.LA dove into this tenuous landscape during a virtual panel discussion on Tuesday with experts in cannabis compliance and legal issues, asking them: Is the green rush over? The consensus seemed to be that no, it isn't, but this first wave of "reckless money," likely is.
Tuesday's conversation on the current state and future of California's marijuana marketplace capped off the conclusion of dot.LA's five-part investigative series examining the rapid rise and rapid fall of L.A.-based Genius Fund, a one-time $164 million cannabis company. Today that money is gone and their Russian oligarch investor is dead.
"There was some irrational exuberance at the beginning of this, of where the money might be, and everybody kind of had their own product or their own brand and own hype," said Andrew Freedman, senior vice president at Forbes Tate Partners, who served as Colorado's first director of cannabis coordination. People were "getting money from places that either maybe weren't the most legitimate or were just people who were just way too excited, before knowing if there was a business plan there."
Part of the problem is the illicit market is "an absolute monster" at three times the size of the licensed market in California, said Brad Rowe, a public policy lecturer at University of California, Los Angeles and expert on cannabis legalization issues who works with municipalities across California on compliance issues.
"The first wave was a lot of excited money, but not necessarily well informed money," said Tanya Hoke, a managing director of Galen Diligence, who advises investors in the cannabis industry on issues related to fraud and compliance. "There wasn't sufficient sort of appreciation for the complexity of operating successfully in this space."
"If we want to prioritize overcoming the illicit market and reinvesting in communities, that doesn't happen automatically just when we legalize," Hoke said. "I think the difficult work of grappling with that can happen now that there's a little more space and the first wave has sort of pulled out."
Freedman said there are many big opportunities for what could ultimately be a $60 to $900 billion U.S. industry and potentially a $300 billion global industry, noting that "that money's still there."
"There were a lot of people that wanted to make money very quickly. Some of them did, but a lot of them lost money for a lot of people," Freedman said. "So it's time for a deep breath and to take this knowing that this is gonna be a very difficult place to make that kind of money."
Rowe said he is bullish long term, "this will be a footnote in history, a tumultuous one for sure."
Part of it requires firms and companies to pay attention to more than just grabbing market share and throwing money at stuff, Rowe said. The cannabis market is unique in its own way. Investors and founders need to be aware of that and be ready to not rely on federal support. The COVID-19 pandemic has crystallized that, as none of that federal aid available to businesses can go to cannabis businesses, Hoke said.
There are other issues too like not being able to access a bank account, working in all cash, "onerous federal income tax liabilities," and not being able to seek bankruptcy in federal court. Those limitations, more than arrests, indictments or raids, become "day-to-day pain points of running a business," said Hilary Bricken, a partner with Harris Bricken, who has heavily focused on the cannabis industry.
She added: "I think investors and entrepreneurs forget these are democratic experiences that are federally illegal. As far as the feds are concerned, they don't care if we all crash and burn and these things fail entirely. And that is a really tough tension to deal with as an institutional investor or an entrepreneur, when you're very used to being able to get a bank account, having equitable taxation and just the normal business opportunities that come with a normal emerging market. But this is not that."
For more from the virtual panel, including a discussion on the money that the industry has attracted and social equity issues, tune into the video.
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Do you have a story that needs to be told? My DMs are open on Twitter @latams. You can also email me at tami(at)dot.la, or ask for my contact on Signal, for more secure and private communications.
dot.LA Strategy Session: Is the Green Rush Over?www.youtube.com
About the Speakers:
Hilary Bricken, Partner of Harris Bricken
Hilary Bricken, Partner of Harris Bricken
Since joining Harris Bricken in 2010, Hilary has earned a reputation as an exceptional and fearless business law attorney. Hilary's clients—start-ups, entrepreneurs, and companies in all stages of development—value her bold approach to business strategy. Hilary also appears before city councils and community forums, where she advocates tirelessly for her clients.
In 2017, the American Bar Association (ABA) named Hilary one of the top 40 young lawyers nationwide and before that The Puget Sound Business Journal named her as one of only seven deal makers of the year. She was by far the youngest and the only private practice attorney to garner this honor. Hilary was also named one of "40 Under 40" leading businesspeople by the PS Business Journal. In every year since 2014, Hilary has been chosen as a "Rising Star" lawyer by Super Lawyer's magazine.
Major media outlets like the New York Times, VICE, the Los Angeles Times, Chicago Tribune, Business Insider, CNN, Rolling Stone, Forbes, MSNBC, and Bloomberg all have turned to Hilary for her on-the-ground perspective on cannabis laws. Hilary's Tedx talk on "big cannabis" (see below) has garnered more than 50,000 views and she also authors a weekly column for Above the Law on marijuana policy and regulation.
Tanya Hoke, Managing Director of Galen Diligence
Tanya Hoke, Managing Director of Galen Diligence
Tanya has more than a dozen years of experience managing investigative due diligence for clients in industries ranging from pharmaceuticals and manufacturing to financial services and consulting. She has been advising investors in the cannabis industry since 2015, and focuses on issues relating to fraud, money-laundering, compliance, and corporate governance. Tanya is a Certified Fraud Examiner, a Certified Anti-Money Laundering Specialist, and a licensed private investigator. She has served on the National Cannabis Industry Association's Banking & Financial Services Committee and the State Regulations Committee. Tanya received a Bachelor of Arts degree from Swarthmore College and a Master of International Business degree from the Fletcher School at Tufts University, where she serves on the MIB Alumni Advisory Board.
Brad Rowe, Director of Compliance, Operations and Regulations Analyst of Rowe Policy Media
Brad Rowe, Director of Compliance, Operations and Regulations Analyst of Rowe Policy Media
Brad has designed, implemented and delivered a dozen public policy research projects over the last six years through his time running BOTEC Analysis, at UCLA and with Avenu/MuniServices Cannabis Compliance and Support Services and Rowe Policy + Media. Brad is Lecturer of Public Policy at UCLA Luskin School of Public Affairs and recently started teaching Cannabis Policy and Society, the first of its kind in the country.
He serves as Advisor to the UCLA Cannabis Research Initiative, coordinating the Criminal and JuvenileJustice Research team and the California Cannabis Data Collection Project. He sat on the CommunityAdvisory Committee for the Los Angeles County Department of Health's impact assessment on cannabis.
In 2020 Brad has taken on the cannabis "dosing problem". To help naive and legacy consumers dose new cannabis products predictably and reliably. The HowHi App Data Project provides evidence based insights into the Quality, Duration and Amplitude of the cannabis experience. The variables are crowd-sourced via experiential self-reports on iOS and Android interfaces.
Andrew Freedman, Senior Vice President at Forbes Tate Partners
Andrew Freedman, Senior Vice President at Forbes Tate Partners
Andrew brings vast experience from his three years as the State of Colorado's first Director of Cannabis Coordination. During this time, he developed distinctive experience effectively implementing voter-mandated legalized adult-use and medical cannabis while protecting public health, maintaining public safety, and keeping cannabis out of the hands of children.
Andrew's role in developing a successful operating model for cannabis regulation and stakeholder collaboration was identified as one of the reasons for the State of Colorado's success in implementing adult-use cannabis legalization by the Brookings Institution. Governor Hickenlooper has gone so far as to praise Andrew's work while on national television, stating, "Andrew Freedman, who came in and helped us once it was passed . . . [has] done a remarkable job of creating a regulatory framework."
Andrew has received national recognition for his leadership. Men's Health Magazine named him one of the 30 most influential health influencers of the last 30 years. He was recognized as one of Fast Company's "100 Most Creative People in Business" in 2016. He has been featured on 60 Minutes, NBC Nightly News, The Today Show, The New York Times, The Washington Post, The Wall Street Journal, The Boston Globe, Governing Magazine, and dozens of local stories throughout the nation and internationally.
Tami Abdollah, Senior Reporter at dot.LA
Tami Abdollah, Senior Reporter at dot.LA
Tami Abdollah is dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer.
- The Rise and Fall of Genius Fund's $164M Cannabis Empire - dot.LA ›
- Tech Companies are Getting Caught in Marijuana Regulation - dot.LA ›
- Green Rush: What Went Down in Adelanto - dot.LA ›
- California Cannabis is Getting New Clear Regulations - dot.LA ›
Tami Abdollah was dot.LA's senior technology reporter. She was previously a national security and cybersecurity reporter for The Associated Press in Washington, D.C. She's been a reporter for the AP in Los Angeles, the Los Angeles Times and for L.A.'s NPR affiliate KPCC. Abdollah spent nearly a year in Iraq as a U.S. government contractor. A native Angeleno, she's traveled the world on $5 a day, taught trad climbing safety classes and is an avid mountaineer. Follow her on Twitter.
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Genies Wants To Help Creators Build ‘Avatar Ecosystems’
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Image courtesy of Genies
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
- Bob Iger, Former Disney CEO, Joins Avatar Startup Genies - dot.LA ›
- Genies Raises $150 Million To Make Avatars For The Metaverse ... ›
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Here's What To Expect At LA Tech Week
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
“Selling Sunset” Star Christine Quinn’s Crypto Brokerage Company Launches Crypto Credit Score Platform
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Christine Quinn is all in on crypto.
Alongside CEO Christian Dumontet, Christine Quinn launched the luxury real estate company, RealOpen, for buyers wanting to purchase properties with cryptocurrencies. Now, RealOpen is launching RealScore—a crypto credit scoring system—to predict volatility and help buyers close deals at the right moment.
Buyers have to convert their crypto to cash when they close a deal. RealScore aims to allow them to liquidate their crypto when the transaction closes instead of waiting for sellers to individually evaluate the worth of their assets. Based on algorithmic predictions, RealScore informs users how they can best combine different cryptocurrencies when making a deal.
“Our application of crypto to real estate is the go-to-market [strategy],” Dumontet told dot.LA. “We expect and we are working really hard to support all sorts of physical assets and services—to be that bridge between digital assets and physical assets.”
After launching RealOpen in April, Dumontet said they realized that the industry needed a way to alleviate people’s concerns about making big crypto purchases. Buyers would often hire a lawyer to oversee the purchase. Dumontet said it was often difficult to prove assets through screenshots, and everyone had to be informed of how different cryptocurrencies correlate with one another.
RealScore doesn’t offer borrowing services. Instead, Dumontet said it evaluates one’s holdings as an indication of buying power.
“It's a way for crypto buyers to simplify,” he said. “And for sellers, to simplify something that's pretty complicated.”
Christine Quinn brings her traditional real estate background to the company as CMO. She left The Oppenheim Group, which launched her into the spotlight through the Netflix series “Selling Sunset,” to found RealOpen with Dumontet, her husband. Quinn told Forbes that part of her decision to leave the real estate brokerage was because The Oppenheim Group does not accept crypto.
Quinn told dot.LA that traditional home purchases happen through a “dinosaur process” that can take some time to complete, and they come with their own issues, such as buyers sometimes photoshopping proof of funds or moving money around. With RealScore, she said the company can cryptographically verify a customer’s crypto history. Having previously worked in the traditional real estate space, Quinn said the type of people looking to buy homes with crypto approach the process different. They’re often younger, she said, and they want to move fast, especially as the crypto market shifts.
“They recognize that homes are going really quickly in this market, and they want to take advantage of that,” Quinn said.
Crypto credit scores typically consider crypto assets, transaction history, spending habits and asset growth. More cryptocurrencies are turning to theconcept as the industry evolves—but credit scores have to take fluctuations into account.
Dumontet wants RealScore to help buyers navigate crypto’s volatility. Stablecoins are relatively new, and Dumontet knows that scandals within the industry can complicate making purchases with cryptocurrencies. Still, he believes crypto has a future as a worldwide, universal currency.
Dumontet compared the crypto winter to the dot.com era—lots of companies adding superficial changes to their platforms without changing business fundamentals. Now, he said crypto has undergone healthy market development.
“There was a bubble,” Dumontet said. “That bubble has burst—and what's left are companies that actually provide real value.”Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.