“When we want to raise capital,” Dooma Wendschuh, the thirty-eight-year-old co-founder of a cannabis company called ebbu, said, “I go up to someone and say, ‘Would you like to invest in my company? Here’s how it will work. One: you may go to prison for making this investment. Two: I may go to prison, and you might lose all your money. Three: our minimum investment is two hundred and fifty thousand dollars. Sure you want to play ball?’ ”
There was nervous laughter from the crowd. It was the first day of the first Marijuana Investor Summit, in Denver, and Wendschuh was speaking at one of the most popular panels, “Raising Funds.” More than eight hundred people from around the country had come to the summit, at the Crowne Plaza Hotel, near the airport. It was a testosterone-fuelled crowd, mostly white men in suits—entrepreneurs mixing with hedge-fund managers and venture capitalists. But there were outliers: an Orthodox Jew with a long white beard, whose family in Philadelphia wants to obtain the first license to grow medical marijuana in Pennsylvania; an African-American man who spent seventeen years on Wall Street, then left to grow pot near Detroit; and a female doctor who wants to start a practice treating chronic conditions with cannabis.
All were convinced that the ongoing legalization of marijuana has created an opportunity for people with a high tolerance for risk to make a killing. Twenty-three states and the District of Columbia have legalized medical marijuana, and four of those—Colorado, Washington, Oregon, and Alaska—have made recreational pot legal. But it’s not legal federally, resulting in chaos and conflicting rules.
David Friedman, whose Marijuana Investor News co-sponsored the summit, told me, “Now is the time to get into the space, because as soon as pot is federally legal, and can be transported across state lines, the big companies with deep pockets—tobacco and alcohol—will take over. We’re all positioning ourselves to be bought up.”
Wendschuh came to “the cannabis space” in 2012. Tall and rangy, with dark hair shaved on the sides, military style, he moves, thinks, and talks fast, jiggling his foot when he sits. After graduating from Princeton’s Woodrow Wilson School of Public and International Affairs, and then the University of Southern California’s film school, he and a friend started a company, Sekretagent, and wrote and produced scripts for video games that grossed more than $2.5 billion worldwide.
On November 6, 2012, the day Colorado and Washington made recreational pot legal, Wendschuh said, “I knew things had changed forever. The train had left the station, and you were either on the train or on the tracks.” He sold his stake in the company he had helped found and moved to Denver.
Wendschuh saw a problem that nobody seemed to be addressing: the unpredictability of marijuana’s effects. “Pot consumers decide what products they’ll buy not by how it tastes or smells but by how it makes them feel,” he said. But even when they find a product they love, the effects may vary widely, depending on the crop and the dispensary. Wendschuh’s father and grandfather are organic chemists, and after speaking with them and other scientists he came up with the idea of distilling marijuana into its chemical components—cannabinoids and terpenes—to determine the effect each one produces.
In 2014, with Jon Cooper, a tech entrepreneur specializing in marketing and sales, Wendschuh started ebbu, setting up a lab and hiring five research scientists.
They saw their mission as creating “a healthier and safer alternative to alcohol” that one day could be sold in bars and restaurants. “After we distill the plant into its basic components, we’re able to combine them and create new products that emphasize one effect,” Wendschuh said. The first five effects, or “feelings,” he plans to market are energy, bliss, giggle, chill, and create.
I was skeptical when I heard this. How could he guarantee a predictable response to a psychoactive substance? Jake Browne, the cannabis critic for the Denver Post, told me he had the same question. “In my experience, marijuana is so intensely personal that people will have different reactions to the exact same plant. I’ve had readers become furious because a strain I found sedative kept them awake all night.”
Wendschuh insisted that, if you graphed people’s responses, there would be a bell curve, with most people having roughly the same experience. “If that weren’t true, anti-depressant drugs wouldn’t work.”
I asked if he could develop an ebbu product that doesn’t make you eat uncontrollably. He started to laugh. “All the high and none of the hunger?” he said. “A goal of ours is to eliminate the undesired effects of pot, like the munchies and paranoia.” Brian Reid, a cellular pharmacologist who works in ebbu’s lab, explained that, as he and his fellow scientists study how human cells respond to specific cannabinoids and terpenes, they may find “a combination or dosage that will eliminate the compulsion to overeat.” But Wendschuh said that’s a complex project that they will take up in the future.
At every panel and keynote address, the speakers emphasized the risks. Jamie Perino, co-owner of three dispensaries called Euflora, said that there are new regulations and crises every day. “That’s normal, so you’d better have a temperament that handles stress well.” When she opened her first store, her bank closed all her accounts and cancelled her credit cards. Although some banks are willing to open accounts for cannabis firms, they charge about ten thousand dollars a month in fees. “No other industry has to pay fees like that,” Perino said. Tripp Keber, who produces Dixie Elixirs, THC-infused drinks, said you need “delusional confidence and patience to get through this.”
Wendschuh spoke on three panels and had private sessions with investors, including an emissary from Snoop Dogg, a Chinese industrialist, and members of the Rockies Venture Club. The year before, he had felt that he was begging for money, but at this conference he left elated, with twenty-five leads from accredited investors and one commitment. After hearing his pitch to the Rockies Venture Club, in which he said he could make his product for two dollars a gram and sell it wholesale for thirty-five dollars, I was almost ready to plunk down money.
Seeing, or, in this case, feeling is believing, so I asked Wendschuh if I could do a blind test of an ebbu product, to see if I could tell what effect it was supposed to provoke. He agreed, arriving at my home the next weekend with a vapor pen and a vial of ebbu oil. I took two hits and tried to articulate what I was experiencing. “It’s not energy … It might be bliss, not quite, but I like what I’m feeling—present, totally here…”
“I’m never present,” Wendschuh said. “I’m on my phone, two steps ahead, thinking about what’s next…”
I laughed, and realized I’d been laughing every time Wendschuh spoke. “I guess I’d say it’s … giggle?”
It was. But ten minutes later it felt a little like chill, with a frisson of anxiety. “We’ll have to work on that,” he said. “We’re trying to give consistent sensations.” Reid later told me that the product I’d tried was “a very early formulation, with none of the cellular research behind it that we’ll apply to future iterations.”
I asked Wendschuh if he has any doubt that ebbu will succeed.
“No,” he said. He described how Cortés, when launching his campaign to conquer the Mayans, sent his men ashore and sank all his ships so that there was no going back. “That’s my mentality: all chips are on the table all the time. You can’t allow yourself an escape route, or in a weak moment you’ll take it.”
What if the science doesn’t bear out, and you can’t standardize the effects of marijuana? “If we don’t succeed at that exact thing, we will pivot,” he said, using the language of entrepreneurs. “It may take longer than we anticipate, but ebbu will succeed. At something.”
