Los Angeles Business Journal Interview with Purple Haze Properties


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By MARNI USHEROFF Staff Reporter

labusinessjournal.com

Marijuana: Hendrix Brother Cues Up Pot Products

Haze-y Focus - Brother pitches Jimi Hendrix for licensed pot products

MARIJUANA dispensaries could soon be confused with record stores as such names as Bob Marley and Willie Nelson start gracing canisters of cannabis, brownies and hemp lotions lining pot shop counters.

The latest icon to join the list: Jimi Hendrix. His brother Leon Hendrix announced this summer that his aptly titled firm Purple Haze Properties had launched Jimi’s Cannabis Collection.

“This was an opportunity to grab on to an emerging market in the early stages,” Hendrix said, sitting in his company’s small office in the heart of the Sunset Strip in West Hollywood, the walls adorned with his brother’s psychedelic art work and portraits of the late rocker. “He’s such an icon and everybody knows he smoked weed. It’s even in the pictures.”

Using his older brother’s name hasn’t been easy. It triggered rounds in a long legal tussle between him and his adopted sister, Janie Hendrix, who runs the musician’s estate.

But after the costly litigious dust seemed to settle, the economics still made sense to Leon Hendrix’s business partner Andrew Pitsicalis. He’d perked up reading that the marijuana-focused investment firm backing the Bob Marley cannabis line,Seattle’s Privateer Holdings, had raised $75 million in a recent funding round based on a $425 million valuation, according to Business Insider.

“Jimi can knock all of them out of the park,” Pitsicalis said of Marley and the other celebrity-branded pot purveyors. “His Atlanta Pop Festival (concert album) came out two weeks ago; it’s already No. (63) on Billboard and he’s dead 45 years.”

As medicinal and recreational marijuana use has become legal in more states, an increasing number of celebrities, dead and alive, have been used to endorse pot and related products. Whether it’s Melissa Etheridge bottling cannabis-infused wine or comedian Tommy Chong’s king-size joint rollers, stars are lining up to stake an early claim in hopes of a green gold rush.

Though some might not see the appeal in a newly launched cannabis line blessed by a decades-long deceased musician, that endorsement can actually mean a lot, said Jackie Breyer, co-publisher and editor-in-chief of New York-based trade magazine Licensing Book.“

Celebrity names and likenesses can lend lots of credibility and interest to a product,”Breyer said. “In a case like Jimi Hendrix or Bob Marley, consumers are going to assume a certain level of quality. There’s also a kind of coolness factor.”

While associating a famous name with a substance still deemed illegal by the federal government can be risky, the potential rewards are tremendous.

Marijuana investment firm the ArcViewGroup valued the legal U.S. cannabis market at $3.5 billion this year, predicting it will surge by 30 percent next year.

And unlike other industries, it’s not growing because there are more consumers or greater innovation, noted Oakland-based ArcView Chief Executive Troy Dayton.“

It’s exclusively because laws are changing and something underground is becoming above ground,” he said.

Courtroom to cannabis

Leon Hendrix, 67, was younger than Jimi, who would be 72 today. In his 2012 book, “Jimi Hendrix: A Brother’s Story,”Hendrix wrote that the two played in the woods in Seattle as well as on the docks and at train yards.

He recalls when they were young, Buster –as Jimi was called in the family – found a beat-up ukulele in a woman’s garage they’d been asked to clean out, and Hendrix was struck by the smile that swept across his brother’s face a she strummed it for the first time. Jimi carried it home and played it for hours.

Jimi Hendrix, of course, went on to become one of rock ’n roll’s greatest guitarists.

When the 27-year-old died of a drug over-dose in 1970, his estate fell to his father, Al,in the absence of a will. The patriarch and his adopted daughter, Janie, created Seattle management company Experience Hendrix in 1995 to handle the rock star’s music, name and likeness.

Upon the father’s death in 2002, Janie received possession of the estate, which i snow estimated to be worth $80 million. The siblings have feuded over those rights in courtever since.

Meanwhile, Pitsicalis had entered the pic-ture as an investor and licensing manager for a Jimi-inspired specialty vodka line launched HendrixLicensing. Though terms of the set-by another businessman who’d previously worked with Leon Hendrix. But the effort was quashed in 2009 by trademark litigation brought by the estate.


Budding Business: Andrew Pitsicalis, left, and Leon Hendrix beside his legendary brother’s signed artwork.

Pitsicalis, who’d previously helped run his family’s Las Vegas memorabilia shops and worked in cannabis-related merchandising, teamed up with Leon to launch HendrixLicensing.com in 2007 as the alcohol brand was going bust.

The estate sued Pitsicalis and the company, which he ultimately shuttered, and relinquished the name. He later started Purple Haze and Rockin Artwork with Leon to license images of Jimi and other celebrities.

Over the summer, the estate finally settled its six-year suit against Pitsicalis and settlement were not disclosed, a 2011 preliminary ruling in the case left Pitsicalis confident that he could license images of Jimi he’d acquired along with the rock star’s name and song titles. It also led Pitsicalis and Leon to launch Jimi’s Cannabis Collection, a business pursuit the estate would likely decline to pursue.“

We take the protection of our trade-marks and copyrights very seriously,” a spokesman for Experience Hendrix told the Business Journal, though the company declined to elaborate.

While it remains to be seen if the estate will take any further action, Pitsicalis’ Rockin Artwork has fired the next shot, suing Experience Hendrix last month for interfering with its business.

Despite the family tension, Purple Haze has forged ahead. This summer, the planned lines of marijuana for smoking and eating (think Foxy Lady has hand frozen ice-cream Whammy Bars) as well as healing products such as Mojo Man pain-relief cream infused with cannabis extracts. Jimi-themed lounges are in the works for Los Angeles and Denver, featuring performance areas, restaurants and designated places to consume or smoke marijuana where legal. Purple Haze also has revealed its first licensing deals with Sparks, Nev., cannabis cultivator Silver State Trading Inc. to grow and distribute marijuana strains and concentrates in Nevada, California and Colorado.Another deal with Toronto’s NutritionalHigh International Inc. to manufacture and distribute various marijuana and hemp-based edibles has also been struck.

Pitsicalis said thus far he’s closed almost $2 million in guaranteed revenue over the next five years.


Iconic: Artwork featuring Jimi Hendrix
at Purple Haze Properties’ headquarters.

Generating buzz

Celebrity endorsements can have an impact beyond individual products, especially in a budding industry that’s seeking legitimacy itself, said Gaynell Rogers, the Nevad aCity-based director of consulting firm BloomCannabis Group, whose services include arranging partnerships between the legal cannabis and entertainment industries.

“If the artist or celebrity doesn’t have a major film or hasn’t released a record in decades, it can work the other way, too,”she said of an endorsement boosting a star’s visibility.

Rogers also sees these new partnerships as a way for musicians, or their estates, to diversify income, which is increasingly being whittled down by digital platforms.

But as with any licensing or branding opportunity, stars need to thoroughly vet a cannabis product’s team, particularly because marijuana is not federally legal yet.“

This is a risky business for now and relationships have to be built and trust has to be built,” she said.