Medical marijuana, meet e-commerce

By Geoff Williams, contributing writer

( -- Entrepreneur John Lee thinks the pot business is ready for its own

The numbers back him up. Marijuana is California's biggest cash crop, generating sales estimated at $14 billion a year. Thanks to the state's increasingly liberal medical marijuana laws, more of that money than ever before is being spent legally.

PlainView Systems founder John Lee

Which leaves sellers with new challenges: Taxes. Invoices. Supply chain management. Regulatory compliance.

Enter PlainView Systems, a four-month-old Sonoma startup that aims to bring sophisticated business management tools to an industry that has only recently begun operating like one. "It's a business where everyone is very, very paranoid," Lee says.

PlainView's "compassionate care marketplace" is a business-to-business exchange for licensed providers of medical marijuana and their patients. Participants can band together to form growing collectives -- a legal requirement for those that want to sell pot -- and cut deals with other members to buy and sell their inventory. The system also helps sellers keep their records in order, generating invoices, sales reports and tax paperwork.

Evan, who asked that his last name not be used, is one of the site's early clients. Now 23, he's been growing cannabis and supplying it to a dispensary since he was 18 -- when it became legal for him to do so, he is very careful to say. He uses PlainView to invoice his buyers and order seeds and fertilizer for his crop.

"I'm just a small-time grower," Evan says. "Anytime I have extra, I can sell it to [a dispensary] for $2,000 to $4,000."

Actually, even the word "selling" is a legal no-no with the dispensary that Evan works with. "They're 'reimbursing you for your time,' that's how they like you to say it," he says.

That semantic footsie is a sign of how California is approaching its controversial crawl toward de facto pot legalization: By burying it in red tape. Local municipalities have drawn up a thicket of regulations specifying how, and how much, cannabis each individual merchant can grow, transport and sell. For Lee, that blizzard of bureaucracy is a business opportunity. It means sellers will need help keeping their paperwork straight.

"Just in the state of California alone, according to my calculations, medical cannabis is a $200 million market," Lee estimates. "As that market grows, we want to have a small but significant part of."

But the formerly underground industry isn't exactly scrambling to shape up and fly straight. Four California dispensaries didn't return calls and e-mails seeking comment on PlainView Systems' business model.

"A lot of them are still on the edge of the law and may not want the publicity," theorizes Andy Cookston, who owns Cannabis Medical, a clinic in Denver that grows and dispenses its own marijuana on the premises.

Cookston says that he appreciates Lee's "idealism." If PlanView Systems does ultimately help growers and dispensaries operate within the law, "I'm all for that," he says. "His business makes great sense."

Lee never expected to work in the drug trade. A lifelong IT professional, he held an executive position at media software maker Real Networks before losing his job to a layoff in February. Soon after, Lee's brother saw a news story on CNBC about California's growing medical cannabis industry and called up to suggest it as a career option. "And I thought, 'OK, I'll go take a look,'" Lee says.

He didn't want to start a dispensary and knew cannabis farming wasn't in his future. But his quarter-century of experience in technology seemed like a useful fit for the fast-growing field.

Fourteen states have legalized some form of medical marijuana, and new signs of acceptance turn up almost daily. The American Medical Association recently softened its stance on the drug, recommending that some federal controls on it be relaxed, and the Obama administration reversed a Bush era policy and said it would stop federally prosecuting medical marijuana users and suppliers who comply with their state laws. Every step creates more potential clients for PlainView.

Lee still gets the jokes from friends -- "So, you're a pot dealer now?"

"Not exactly," he responds. "I don't touch any of the material. I'm not part of the transaction."

But if all goes as planned, he intends to be part of a multi-million dollar solution. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Questions & Answers

QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Index Last Change % Change
Dow 32,627.97 -234.33 -0.71%
Nasdaq 13,215.24 99.07 0.76%
S&P 500 3,913.10 -2.36 -0.06%
Treasuries 1.73 0.00 0.12%
Data as of 6:29am ET
Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
Data as of 2:44pm ET


Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.