In 2004, a young 12-year old daughter of a farm family in Sonoma County, California wrote to the producers of “Extreme Makeover: Home Edition.”

Shelby Pope asked them to renovate her family’s home because she has a rare condition called “polymorphous light eruption” (sun poisoning), and can’t be exposed to sunlight.

If they could keep the UV rays from coming through the windows, she could leave the confines of her bedroom. So the show went to work and took a $285,000 farmhouse and turned it into a $1.5 million dream home. The problem was the tax bill. Aside from doubling the annual property tax to $6,500, Pope's family owed federal and state income tax on the “gift of the renovation”—a cool $664,500.

When it comes to paying taxes, what you don’t know can hurt you, says Elle Kaplan, chief executive officer of Lexion Capital Management, an asset management firm in New York City. That’s partly because the tax code is so complex and tangled, but it’s also because each taxpayer has his or her own set of financial circumstances and particulars—so one “size” doesn’t fit all.

Extreme Makeover winners weren’t the only ones to have their elation bubble burst. Past recipients of HGTV’s Dream Home Giveaway, for example, also got a crash course in the realities of the gift tax: If the gift is more than $14,000, the IRS considers it income. In fact, because of tax implications and other issues, most winners of the HGTV contest have ended up selling the million-dollar properties.

For 2013, you should receive a 1099-MISC form from an employer on any income over $600, which you must declare as part of your overall income. Even small amounts—like the interest earned on a $500 savings account—must be declared unless it’s specifically exempt under the tax code. Once everything’s been reported, your final tax bill depends on your income level, your exemptions and so on.

What the IRS defines as income may come as a shock to some taxpayers, however. 

Here are some surprising items that are taxable, according to financial experts and the IRS. (As always, if you’re uncertain of any tax implications, check with your financial advisor.)

1. Social Security. This is often the most surprising tax to his clients, says Howard Hammer, CPA, of Fiske & Co., an accounting firm with offices in south Florida. You need to pay federal taxes on your Social Security benefits if you file as an individual and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income of more than $32,000.

2. Gift Tax. In addition to paying tax on any large prizes you receive, you must pay taxes on monetary gifts you receive over $14,000 in 2013 (or over $28,000 if the gift is from a married couple). The gift tax has long been in place, though the taxable amounts have gone up over time.

While paying taxes on luxury gifts may not come as a surprise, families and friends often give money to help with expensive school tuition and unexpected medical bills for older people, Kaplan says. How you give the money makes all the difference. If you write checks directly to the family member, it’s considered taxable if the total annual amount is over the limit. One way to avoid this while still helping loved ones with practical expenses is to gift the money directly to the educational institution or medical facility, Kaplan says.

3. Scholarships. Scholarship money is tax-free if it’s going to a student at an accredited school and covers tuition, books, fees, or school supplies. However, if the money is being used to cover travel, housing, or other miscellaneous expenses, then it’s taxable.

4. Unemployment. Unemployment income is 100 percent taxable, no matter what state you live in, Hammer says. He recommends electing to have taxes deducted as you receive it, rather than paying a lump sum during tax season. First-time unemployment filers often get a rude surprise when they receive a tax statement from their state – a copy of which is also sent to the IRS.

5. Alimony. If you’re receiving alimony checks from a former spouse, be prepared to pay up to the IRS at tax time. However, not all checks from an ex-spouse are taxable. The divorce decree must specially categorize the payments as alimony, and any child support payments and property payments are not included and are tax-free. 

6. Gambling. Whether you hit it big in Vegas or at the Kentucky Derby, any gambling winnings are taxable. You can, however, offset this down to zero if you have gambling losses. You must have full proof of those losses through tickets and receipts. Gambling establishments send tax information to the government if winnings top $600, Hammer says, and winnings (even less than $600) should be reported as miscellaneous income on your 1040 form.

7. Medical Marijuana. Businesses that sell medical marijuana are taxed on their profits, but since marijuana is still illegal at the federal level, those businesses are treated like hard drug dealers at the IRS, and can’t deduct things like rent, payroll or utilities as a business expense. Many business owners report paying effective tax bills of 65 to 75 percent – compared to the 15 to 30 percent average for most other small businesses.

8. Ebay. Yes, that money you made from selling old action figures on eBay is taxable. Different rules apply, however, depending on if your eBay dealings are considered a business or a hobby. To determine which one it is, the IRS uses factors like, (1) Do you engage in the hobby in a businesslike manner? (2) Do you spend considerable time working on the hobby? (3) Do you depend on income from your hobby for your livelihood?

Ebay sellers also have to consider how much profit they actually made. If you paid $5 for a book at a yard sale, and sold it on eBay for $20, you technically made $15. But you can also deduct any expenses you incurred in the transaction, things like driving to the yard sale or the postage you paid. You also don’t need to report anything you sold at a loss – like that $20 sweater you bought five years ago and sold for $10.

9. Airbnb. The local and state tax rules on renting out your home or a room through sites like Airbnb.com are still hazy, so be sure to consult a tax professional. According to the IRS, if you rent out your home or room for fewer than 15 days, you don’t need to report the profits.

Beyond that, any income is taxable, but you’re allowed to deduct expenses like maintenance, utilities, and mortgage interest. Some states and cities also consider you to be in the hotel business if you’re operating short-term rentals, and impose bed taxes or occupancy taxes.

10. Crowdfunding. Online funding platforms such as Kickstarter.com allow starving artists, entrepreneurs and others to solicit financial contributions for their projects, start-ups or causes. While some people get small donations from virtual donors, others bring in big bucks, such as the “Veronica Mars” movie project that has currently raised over $4 million.

Since this is a relatively new form of raising money, many details are still being worked out with the IRS – but the general rule is that if you raise more than $20,000 from more than 200 people, you’ll need to pay taxes using the new form 1099-K. If the money is less than $20K, but you gave away a product to donors, like a t-shirt or CD, you could also owe taxes if your expenses are lower than what you took in.

11. Digital Currency. Bitcoins, an alternative digital currency used in online transactions, has seen unprecedented demand recently, and the currency’s value has tripled in the past month. Tax laws on Bitcoins are still hazy since they’re not recognized as legal currency except online, but Bitcoin holders should treat them as stocks or other investments.

If a Bitcoin holder was to trade his or her coins for U.S. dollars at one of the few online currency exchange sites, that profit would be taxable.

Read more from The Fiscal Times:

Two taxes that could decide the fate of Obamacare >

How startups are profiting from aging Boomers >

Puzzling rise in food stamp use as economy improves >

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DENVER (AP) — Thousands of people are expected to join an unofficial counterculture holiday celebrating marijuana in Colorado and Washington this coming weekend, including out-of staters and even packaged tours. The events and crowds will test the limits of new laws permitting pot use by adults.

More than 50,000 are expected to light up outdoors in Denver's Civic Center Park on April 20 to celebrate marijuana legalization. Thousands more are headed here for the nation's first open-to-all Cannabis Cup, April 20-21, a domestic version of an annual marijuana contest and celebration in Amsterdam. Expected guests at the Cannabis Cup, a ticketed event taking place inside the Denver Convention Center, include Snoop Lion, the new reggae- and marijuana-loving persona for the rapper better known as Snoop Dogg.

Marijuana activists from New York to San Francisco consider April 20 a day to celebrate the drug and push for broader legalization. The origins of the number "420" as a code for pot are murky, but the drug's users have for decades marked the date 4/20 as a day to use pot together.

Marijuana remains illegal under federal law, and its sale without a doctor's recommendation isn't allowed yet in Colorado or Washington. Neither state allows open and public use of the drug. But authorities largely look the other way at public pot-smoking, especially at festivals and concerts, and entrepreneurs are finding creative ways to capitalize on new marijuana laws.

One of them is Matt Brown, co-owner of Denver's new "My 420 Tours," which gives traveling pot users everything but the drug. Brown has sold 160 tour packages to visiting pot smokers for the April 20 weekend. Prices start at $499, not including hotel or air.

The tour sends cannabis tour guides to pick up marijuana tourists at the airport in limousines, escort them to Cannabis Cup and other Denver-area marijuana celebrations and deposit them at a hotel where smoking — tobacco or reefer — is permitted on room patios.

Marijuana tourists on Brown's tour can add extra days of touring medical marijuana dispensaries and commercial growing operations. A cannabis cooking class is another option. Five-day tours run $649 to $849.

Brown, a medical marijuana patient who is new to the travel business, says his tours will enable sharing of pot but not selling it. Eighty percent of his clients are coming from outside Colorado — meaning it's illegal for them to bring marijuana from home. And because commercial pot sales in Colorado don't start until January, out-of-state visitors can't yet buy pot at Colorado's 500-plus dispensaries.

Despite the legal barriers, Brown said his tours quickly filled to capacity and he had to turn away would-be cannabis tourists. He's hoping to book future pot-themed weekends if the April 20n weekend does well.

"People are fascinated by what's happening here, and they want to see it up close," Brown said. "We want to make sure people don't come here, land at the airport, rent a car and drive around stoned all weekend."

The tour group isn't affiliated with the Cannabis Cup, sponsored by High Times Magazine, which has run similar events for medical marijuana in nine cities. The magazine's editorial director, Dan Skye, says this month's U.S. Cannabis Cup was timed for the April 20 weekend.

"4/20 is the national stoner holiday, for lack of a better word," Skye said. "It gets bigger every year, and this year, after the legalization votes, it's going to be absolutely huge."

The magazine planned to award Snoop Lion with a "lifetime achievement" award at a Denver ceremony Friday. A Cypress Hill/Slightly Stoopid concert was planned Saturday at the iconic Red Rocks Amphitheater just west of Denver. Both events sold out weeks ago.

A few dozen miles northwest of Denver, the University of Colorado in Boulder will try to dampen pot celebrations on April 20. The campus once held the nation's largest college 4/20 celebration, drawing an estimated 10,000 in 2010. The legendary smokeout was cited by Playboy magazine when it named Colorado the nation's top party school in 2011 .

After the Playboy mention, the university stepped up efforts to shut the celebration down. Campus officials last year roped off the site of the smokeout, Norlin Quadrangle, reducing the 4/20 crowd to a few hundred protesters. The school planned another shutdown Saturday.

Celebrations were planned in Washington state, too, though April 20 isn't as broadly celebrated as Seattle's annual Hempfest, which draws hundreds of thousands of people to a waterfront park every summer.

The April 20 celebrations in Washington included a Seattle party being put on by DOPE Magazine at an artist work space and studio. About 1,500 were expected for glassblowing demonstrations, music, dancing and a bar where revelers can vaporize their pot, plus the judging for the "DOPE Cup"— an award for the best bud. There will be a smoking tent set up outside, along with food trucks to combat any cases of the munchies.

"It's pretty monumental," said DOPE editor in chief James Zachodni. "This is the first time in the U.S. there's been a cannabis holiday with a legal aspect to it."

Back in Colorado, longtime pot user Andrew Poarch says this year's April 20 observations in Colorado have taken on epic significance. He's joining dozens of friends to hire a bus from Colorado Springs to attend Denver's Cannabis Cup.

"It's going to be a lot bigger, a lot more people," he predicted. "People are trying to outdo themselves because it's a party and a celebration. We beat prohibition. It's a pretty big deal."

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Associated Press writer Gene Johnson contributed from Seattle.

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Kristen Wyatt can be reached at http://www.twitter.com/APkristenwyatt. Johnson can be reached at http://www.twitter.com/GeneAPSeattle.

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Marijuana has enjoyed considerable political success recently.

In November, Colorado and Washington legalized marijuana use, and since then multiple states have begun to look at decriminalization and legalization efforts with momentum that the movement has never seen before. 

While the movement to reform drug policy is comprised of thousands of activists and donors, several individuals have been leading the fight to pass new laws and ballot initiatives that legalize pot. 

We spoke to several people in the reform movement, and these five individuals came up as some of the most influential in the marijuana reform movement: 

 1. Allen St. Pierre

St. Pierre is the executive director of the National Organization for the Reform of Marijuana Laws (NORML), the oldest and largest advocacy group working to legalize marijuana in the U.S. 

Under St. Pierre, NORML has become the leading lobbying group for marijuana legalization, decriminalization and medical use. 

NORML under St. Pierre is also a major messaging arm for reformers, serving as  an information clearinghouse for media and another prospective for policymakers. Currently, NORML is working with forces on the hill to develop federal marijuana legalization.

NORML's foundation arm also provides legal support to some people charged with marijuana crimes and undertakes relevant research initiatives.

2. Ethan Nadelmann

Nadelmann is the founder and executive director of the Drug Policy Alliance. 

DPA serves as one of the clearinghouses for marijuana policy in the U.S. They work extensively to push legislation that decriminalizes marijuana offenses at the state level, and also provide grants to smaller, local organizations.

DPA and their electoral arm, Drug Policy Action, were behind the November 2012 ballot initiatives in Colorado and Washington that legalized marijuana in those states. Nadelmann's group also helped fund-raise and build political support for the ballot initiatives. 

St. Pierre, director of NORML, called Nadelmann "the most dialed-in drug policy reform advocate in the country." 

3. Peter B. Lewis

Lewis is the former chairman and CEO of Progressive Insurance. 

With a net worth of roughly $1.2 billion, Lewis is a prominent philanthropist, and a top financial backer of the drug reform movement in the U.S. One prominent advocate estimates that he has given roughly $40 million to the cause since 1996.  

One recent contribution to the Brookings Institute enabled the organization to fund a new 18-24 month serial review of marijuana law and alternative policies, a project that has huge potential for marijuana reform advocacy. 

4. Justin Ross Hartfield

Hartfield is one of the new breed of "ganjapreneurs" who are bringing legitimate business sensibilities to the newly-legal marijuana market. 

A 28-year old serial entrepreneur, Hartfield and his partner Doug Francis run Ghost Group, a venture capital fund with holdings in several businesses that Hartfield started, including Weedmaps— a site with revenues of $1.5 million per month already  — as well as Cannabinoid Science Systems, a research firm that develops marijuana products. 

Because his businesses don't require him to actually come in contact with the drug, Hartfield is able to make a fortune off of marijuana reform without running afoul of federal law. He also sits on the boards of NORML and the Marijuana Policy Project. 

5. Alison Holcomb 

As the campaign director of New Approach Washington, Holcomb led the political action committee behind the successful passage of State Initiative 502, which legalized marijuana in the state of Washington.

She managed to raise $3 million for the initiative— much of it provided by Peter Lewis —  which dwarfed the opposition's spending. 

Holcomb has worked for years on marijuana law through the ACLU Washington, and currently serves as the Drug Policy Director there. Prior to running New Approach Washington, she extensively lobbied the Washington legislature about reforming their medical marijuana policy. She recently flew to Uruguay to consult with officials about marijuana legalization there.

Following her win in Washington, there has been speculation that Holcomb may make a run for mayor or city council in Seattle. 

Holcomb is unique in the movement in that she claims to have not used marijuana personally.

NOW SEE:  The Next 8 States That Could Legalize Marijuana

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4/20, or April 20th, — the unofficial holiday devoted to marijuana — is usually associated with hippie, beanie bag kicking, dreadlocked, guitar strumming stoners gathering to celebrate in a lazy, smoke-filled haze. 

My 420 Tours and co-owner Matt Brown could be helping to change that out-dated perception that marijuana smokers are all clones of Cheech and Chong. 

Brown equates his version of pot tourism to wine-tasting in a place like Napa.

My 420 Tours, the first devoted marijuana-themed tour operator in the U.S., arranges tours for groups centering around marijuana-themed activities while still allowing participants to experience Colorado's renowned tourist attractions.

Brown, a medical marijuana patient, told Business Insider these tours will allow people to tour Denver — something they'd be doing anyway — but they'll be doing it while high.

"Pot tourism is like all other tourism," Brown said. "The only difference is that for the 10% of Americans who smoke responsibly, they can go on vacation to Colorado and smoke freely. We tried to package all of the cool things that people do in Colorado, and allow people to smoke while doing them."

Tour activities might include a private cannabis cooking class, tours of medical marijuana growers and dispensaries, and home-growing workshops. My 420 Tours also arranges transportation to 4/20 concerts and events, like the 4/20 concert at Red Rocks. Even the 4-star hotels on this tour are cannabis friendly, featuring balconies where guests can smoke.

My 420 Tours is currently operating its inaugural tours, called World Cannabis Week. The 3- and 5-day packages range from $500 to $850 (not including airfare or hotels), depending on the length of the tour—sold out almost immediately for the April 20th weekend.

"The response has been overwhelming," Brown told us. "We sold all of our tickets before we got media coverage. When you count airfare, hotel and tour, people dropped about $2,000 a piece on these tours because they were so eager to come and try it out."

Brown said that almost 200 people purchased packages for World Cannabis Week, and he expects this inaugural group will generate about half a million dollars in tourism revenue for Denver over the weekend.

So who's buying these tour packages? It's not who you'd think. 

My 420 Tours offers more highbrow experiences that appeal to an older and more affluent clientele. Brown said that the somewhat steep price point is not attractive to young people, and that the average age of tour participants is around 40.

"We got more response from an older demographic than I would have guessed," Brown said."This appeals to a person who is desperate to follow the law. They're not looking to push the rules or be edgy. It's about coming here and doing the same exact thing they'd do at home, but here it's legal. They’ll be able to get through their vacation and do what they want to do without going to jail."

Brown said that everything on the tours is perfectly legal, the trick being that no one is buying or selling marijuana. Guests are given a small amount of marijuana when they arrive and they'll have access to marijuana throughout the tour, but there is no exchange of money.

"We try to keep people occupied with these tours," Brown said. "From the time they get up in the morning to night, there’s always an event, like a cannabis cooking class, with someone who’s local and has some weed on them and is willing to share with guests."

Brown tells guests that they can smoke freely while in Colorado, but they'll only be given small amounts of marijuana and they can't take it home. He also warns them that they can't buy the drug from Colorado's 500-plus dispensaries, since commercial pot sales won't be legal for out-of-state visitors until January.

"People from out of state are so in awe that this can exist at all," Brown said. "They are just so relieved that they come here and have someone hand them a tiny piece of weed."

Brown said that he sees Colorado growing into a destination for marijuana users, and My 420 Tours plans to expand to meet the need. After this weekend's inaugural tours, he plans to arrange three or four large events every year, along with smaller custom tours for individuals.

SEE ALSO: Marijuana Has Won The War On Drugs >

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The accelerating legalization of marijuana has brought about an entirely new, legal industry around the drug. 

Until recently, the marijuana business was solely a black market, fueled by drug traffickers and gangs.

However, as more and more states move to legalize or decriminalize marijuana, several legitimate business enterprises have sprung up with the goal of profiting off of the drug. 

To find out more about the growing legal marijuana industry, we spoke to Justin Hatfield, the entrepreneur behind WeedMaps.com, a juggernaut site that pulls 50,000 unique visitors per day and generates $1.5 million in listing fees alone each month, according to documents put out by the company.

We talked to Hartfield about the current state of the business, the future of pot in America, and the unrealized potential of a marijuana industry in the U.S. 

Business Insider: So what is WeedMaps?

Justin Hartfield: I was a patient in early 2008 and me and my friends wanted to know where the dispensaries were. There was no really good way to find out where they were, their hours, let alone what was on their menu.

WeedMaps is a medical marijuana dispensary finding website. It was founded in 2008 and we help patients connect to each other and let them see menus and pricing for most of their favorite dispensaries.

I was already in the internet business. I had a SEO company, and just for fun I made the site. I had a really cool name “WeedMaps,” and it just started to take off way more than my consulting business did. So eventually I just dropped consulting and started doing WeedMaps full time.

BI: What is it like being a marijuana entrepreneur?

JH: It’s really fun, especially when I get to tell people what I do .

I’m in a little bit of a different position than most people in the marijuana business because i’m only tangentially related. I don’t actually touch the stuff. I at least have one layer of separation, so I can be a little be more free and open telling people exactly what I do, something people who sell marijuana don’t have the same way.

BI: So this is legal?

JH: It’s absolutely legal. How? First Amendment.

BI: As a result of your business, you’re now on the board of a number of groups, including NORML (National Organization for the Reform of Marijuana Laws). Tell us a little more about your advocacy work. 

JH:I’m also on the board of Marijuana Policy Project as well as National Cannabis Industry Association, so I’m very busy on boards. What I do exactly I still haven’t figured that out yet.

I’ve always been especially interested in ending the drug war. It’s always something I thought was wrong on a number of levels. Ending the prohibition on marijuana would just make so much sense. I think organizations like NORML and MPP are doing amazing work changing not only the cultural perception but also the laws, what we’ve seen in Colorado and Washington in November.

BI: In November, Colorado and Washington legalized marijuana on the state level. How has this changed the outlook for legal marijuana in the U.S.?

JH: I think it changes everything. Monetarily there hasn’t been an impact yet, but obviously the laws still need to be implemented. They will be on the first of January 2014. 

I think what it’s doing now is it’s bringing really professional investors and players into the space that I haven’t seen before. I’ve been doing this since 2008, the level of the business actors hasn’t always been  the “highest.”

But now, I’m beginning to see some really serious, sincere, business people — with credentials, with backgrounds —   starting to get more interested and involved in the industry. That’s always a great thing to see because that’s going to make the pie bigger, make the industry grow and  mature and become more accepted.

It’s people with experience and backgrounds — 10, 15, 25 years —  in industry bringing that level of professionalism, their technology, the discourse itself has been very powerful. I think there are starting to be a lot more impressive business opportunities emerging  from this growing acceptance, especially in the kind of tangentially related  industries like paraphernalia and electronics —  vaporizing pens, vaporizers in general, even storage devices,

You name it, there’s this incredible amount of technology that’s being applied. It’s been in the closet so long, it’s been a contraband industry so long . These professional people and this kind of high technology hasn’t been applied  to the industry yet, and we’re finally seeing it emerge. It’s becoming evident everywhere.

BI: What’s the future for pot in America, looking at the next three to five years?

JH: I think we’re looking at a few more states adding medical, then in 2016 there’s going to be the next big push. It’s a presidential election, they’re expecting a lot of younger folks to vote. When young folks come out to vote, they typically vote for legalization.

I expect [Progressive Insurance chairman and marijuana legalization advocate] Peter Lewis and his group to have something on the ballot in California, and then hopefully a few other states.

BI: How about New York?

JH:Medical [marijuana legalization] in New York looks very promising. They’re pushing stuff up in Albany now. This bill that they’re pushing right now is very restrictive form a commercial standpoint and also in terms of just a medical standpoint. They’re not allowing doctors to recommend marijuana, they’re trying to control what  diseases marijuana can be used for and in that kind of system it just limits the market. It’s going to be very heavily regulated there but I think in 2016 there could be possibility of a legalization bill there too. I know [The Drug Policy Alliance] is working really hard in New York.

BI: What about long term? Has marijuana already won?

JH: I think the culture war is over, as Allen St. Pierre [Executive Director of NORML] likes to point out. Culturally, there’s no doubt about it that my generation and the generation that’s older than me, they’ve come to accept this should be regulated like alcohol.

So for long term? I see federal legalization on the horizon within the next ten to twelve years. Hopefully sooner. Hopefully it’s tomorrow. It’s kind of ridiculous the federal government is even considering not letting the states move forward with this experiment, but regardless, I think the long term prospects for the marijuana industry are really good, probably comparable to the wine industry, probably a lot bigger.

BI:The wine industry? Most people seem associate the future of pot with the tobacco industry. 

JH: Everyone always compares it to tobacco, I think that tobacco is $35 billion depending on who you ask, the wine market is a little bit less than that. I think the recreational market is going to be very similar to the wine market with an extra added huge market for medical; because there are a lot of patients that need to have a guaranteed medical product.

BI: Wine has independent producers, whereas tobacco is heavily consolidated.

JH: Exactly. The wine business is going to be a closer model of what the legal cannabis market will be eventually. If California really does legalization right — either through [California Lieutenant governor and presumed 2014 gubernatorial candidate] Gavin Newsom, the legislature or in 2016 —  if they really do it right they’ll specify zones like the Emerald Triangle or Humboldt County that are special, just like they do with Napa Valley or Sonoma.

When you have a product that’s comes of these areas it’s allowed to have stamps of approval — “the Humboldt stamp of approval” —  and I think this is going to revitalize a lot of local industry there and create a whole cottage industry — like Sonoma has with the French model —  by designating special areas.

BI: You have another business, Cannabinoid Science Systems. What’s with that?

JH: Cannabinoid SS is a research company that develops and applies for patents  for cannabis intellectual property, medical and recreational. We’ve got a lot of really cool stuff. We’ve done so much research on cannabis. We know so much about the plant and extracting things from the plant. We know so much about processing and post-processing that we may as well get these patents so when it does become legal federally we have them. 

BI: What needs to happen now?

JH: I want to commend Colorado for passing Amendment 64, and ensure that the four congressmen do the right thing and pass a bill that’s not only timely but also fair to the local businesses  and people in the community. There’s a world spotlight on Colorado and Denver. If they get this right, if they really find a good way to regulate marijuana I think the whole world will benefit.

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It's 4/20. For those not in the know, "4/20" is the unofficial holiday for pot smokers and marijuana legalization activists around the world to celebrate by lighting up on April 20. 

The Huffington Post's Ryan Grim traced the term back to 1971. A group of California high school friends, known as the "Waldos" used "4/20" as a code word to refer to the time of the day when they would smoke outside of school. 

The term was popularized in stoner communities, courtesy of the Grateful Dead. It eventually went mainstream, much to the dismay of police, parents, and lawmakers.   

The drug, best-known for it's "feel-good" effects and touted for its uses for multiple diseases, can also be damaging to our bodies and minds.

Marijuana comes from the cannabis sativa plant, and is the dried and shredded leaves, stems seeds and flowers. The high you get from marijuana comes from a chemical called Tetrahydrocannabinol, also known as THC. Some strains contain more or less THC — making them more or less potent.

Most of THC's effects happen in the brain, where the chemical interacts with receptors on brain cells called cannibinoid receptors. Our bodies actually make chemicals very similar to THC, which are used in normal brain function and development. THC co-opts these natural pathways to produce most of its effects.

Marijuana makes you feel good

When THC hits brain cells, it causes them to release dopamine, a feel-good brain chemical. This is a part of the brain's reward system, which makes you feel good when you do things that ensure the survival of yourself and your offspring. These things include eating and having sex.

When over-excited by drugs, the reward system creates feelings of euphoria.

... but that's not all good

When the rewards system is overstimulated, for example, by the abuse of drugs like cocaine, it can go haywire and cause a dependence (or in extreme cases addiction) on whatever is providing the rewarding feeling. It can also diminish how rewarding normal things, like eating, feel.

This can cause apathy and dependence on the drug.

It blocks memory formation

The active ingredient in marijuana acts in the part of the brain called the hippocampus to alter the way information is processed and how memories are formed. Animal studies have shown that this is particularly true while the brain is still developing— specifically why the legal smoking age is 21 in the states that have legalized it.

This blockage of memory formation can cause cognitive impairment in adulthood if use happens during adolescence, at least in rats. It can also quicken age-related brain cell loss, though marijuana has been shown to slow the progression of Alzheimer's disease.

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CEOs tend to be somewhat straight edged types, more given to waking up early and working late than for taking time to relax, or for advocating for something as controversial as the legalization of marijuana. 

There have been a few notable and very successful exceptions.

Probably the most outspoken of them is Progressive Corporation's longtime CEO and now Chairman Peter Lewis. In a 1995 profile on him in Fortune, someone close to him said that "he is a functioning pothead." 

Lewis writes, in an editorial for Forbes:

My story is fairly simple. I grew up after college in a world where social drinking was the norm but marijuana was hidden. When I was 39 I tried marijuana for the first time. I found it to be better than scotch. But it wasn’t until I had serious medical problems that I realized how important marijuana could be.

When I was 64 my left leg was amputated below the knee because there was an infection that couldn’t be cured. I spent a year after the amputation in excruciating pain and a year in a wheelchair. So during that period I was very glad I had marijuana. It didn’t exactly eliminate the pain, but it made the pain tolerable—and it let me avoid those heavy-duty narcotic pain relievers that leave you incapacitated.

His marijuana use didn't seem to hold him back. He built Progressive from a tiny, 40 person company into one of America's three largest auto insurers, worth more than $14 billion. He himself is a billionaire, worth an estimated $1.2 billion. 

Beyond his personal use, Lewis is among the biggest donors in the world to organizations that support marijuana legalization. The National Organization for the Reform of Marijuana Laws (NORML) estimates that he's spent $40 to $60 million on the cause. 

His advocacy comes because "our marijuana laws are outdated, ineffective and stupid,"Lewis writes in Forbes. 

Virgin Richard Branson is another high profile supporter of legalization, recently writing on LinkedIn that his biggest wish for 2013 is that the world will make progress on ending the war on drugs.

Branson writes:

Millions of otherwise productive lives are wasted in jail for marijuana possession and other nonviolent drug violations. California alone could raise an estimated US $1.4B in annual revenue if it taxed and regulated the sale of marijuana – so imagine the revenue that is keeping the underworld in business.

He's admitted to using marijuana recreationally, and claims that Keith Richards taught him to roll a joint for the first time.

Branson is one of the world's most successful entrepreneurs, his Virgin Group is made up of more than 400 companies, and he's worth an estimated $4.6 billion.

In California, where medical marijuana is a legal and growing business, the drug is particularly popular among highly stressed Silicon Valley engineers. Mark Johnson, the CEO of personalized news service Zite, told Bloomberg Businessweek that marijuana use is "extremely common" among tech workers, and that he personally smokes daily. 

Other CEOs that have pushed for legalization include George ZImmer, the founder and CEO of Men's Warehouse, and John Mackey, the outspoken co-CEO and founder of Whole Foods.

These figures are still somewhat out of the mainstream, particularly among their peers. But public support for legalization has grown, and soon, they might not be alone. 

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In honor of smoking holiday 4/20, we've round up 11 celebrities who have openly discussed their love of smoking weed.

Some like Snoop Dogg and Rihanna make no effort to hide their habit, but others such as Justin Bieber have gone to great lengths to try and keep it a secret -- to no avail.

Plus, a few surprise celeb smokers.

Justin Timberlake believes "Some people are just better high."

In an interview with Playboy magazine, Justin Timberlake said he "absolutely" smoked weed.

"The only thing pot does for me is it gets me to stop thinking," JT told the magazine. "Sometimes I have a brain that needs to be turned off. Some people are just better high."

Although, he did attempt to quit for a bit in 2003 after being high during the first ever episode of "Punk'd.""I actually stopped smoking pot for 9 to 10 months after that. I was so stoned."

Cameron Diaz bought weed from Snoop Dogg.

Justin Timberlake's ex-girlfriend Cameron Diaz is also no stranger to weed especially since she went to high school with Snoop Dogg!

 "We went to high school together, [Snoop] was a year older than me," she said on "Lopez Tonight.""He was very tall and skinny and wore lots of ponytails in his hair and I'm pretty sure I got weed from him. I had to have!"

Snoop Dogg taught his son how to "properly" smoke.

Snoop Dogg confirms Cameron Diaz's comments, saying, "I might have sold her some of that white girl weed."

Meanwhile, the rapper admits he is a proud holder of what he calls "a platinum medical marijuana card."

He even taught his son how to "properly" smoke weed.

"What better way to [learn] than from the master?" Snoop tells The Hollywood Reporter, referring to photos posted on Twitter showing his son lighting a 2-foot-bong.

“My kids can do whatever the hell they want," he explains of his parenting philosophy. "For me to say otherwise would be hypocritical. A lot of motherf-----s don't have a relationship with their kids, and that's when they get on drugs and have suicidal thoughts and drive drunk. Me and my son is mellow. I'm his father, so I wanna show him the proper way because he looks up to me.”

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On Saturday, many pot-smoking enthusiasts celebrated holiday 4/20 — but Rihanna took it to a whole new level.

Weed cakes, strip clubs, fat joints — the 25-year-old singer documented her wild day in photos posted to her Instagram account for her 6.7 million followers to see.

All started tame as Rihanna and her female bicycle gang hit the streets. "Our #420 on #420 #clique," she captioned this photo.

She then posted this picture of a cake made by a fan. "What did I do to deserve the epicness that is my fans??!!! @janiseeaileen gyal you a real top shotta!!!!! Thank you for lighting up my day, no pun intended!!#420Life"

Here's Rihanna smoking a joint next to the cake after her Ft. Lauderdale concert stop. "#420 it's a celebration bitches!! Thank you to all my ft. Lauderdale and Miami fam that came through #DWT#backstageLife."

She posed with Victoria's Secret model Adriana Lima backstage, too. "Only bad bitches get backstage on the#DIAMONDSWorldTour #nobasiczone@adrianalima."

And then she hit a strip club. "I still got my money #420."

"K.O.D got me a #420 welcome #cake to pop my cherry! #whenwillyourfave," she wrote next. A quick google search for "KOD Fort Lauderdale" reveals Rihanna was at King of Diamonds Gentleman's Club.

The party continued into the wee hours. "Wild for the night, phuck being polite!"

Rihanna spent the next day relaxing poolside. "Shout out to my lover @charliebymzThank u for designing what has to be my favorite bikini of all time!"

"Playin hard to get, but he loves me!"

SEE ALSO: 11 celebrities who are outspoken about their love of weed >

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This weekend was 4/20, which is basically Christmas for users of marijuana.

The largest celebration took place in Denver, where a massive pot convention — including the Cannabis Cup contest — was interrupted by a shooting that wounded two and sent shock waves through the marijuana movement.

Remember that Colorado recently voted to legalize marijuana.

Barry Bard, an editor for WeedMaps.com– a startup that is among the first to capitalize on legalized and medical marijuana — spoke to us about the event. The WeedMaps team was at the Exdo Center, where the Cannabis Cup was being held. At the same time, they had a separate camera crew near the Civic Center. Here's what they heard:

"I was told it was like a wave of people rushing around after 5 shots were heard," Bard said in an email to Business Insider. "It was gang related and a 19 year old, I believe.

So while the shooting wasn't related to marijuana, the main event, or Denver's legalization of pot, it still will have significant downsides for the pro-pot movement. 

As we've argued, the future success of marijuana in the United States is predicated on the success of the dual experiments going on in Colorado — specifically Denver — and Washington. 

Attorney General Eric Holder is the man with the ability to either turn a blind eye or systematically crush the attempt to legalize marijuana in the states. During an Appropriations Committee hearing last week, Holder said that the Justice Department response would depend on "the impact on children" and violence related to organized crime. 

Needless to say, a gang-related shooting in the vicinity of a major marijuana event can be construed as somewhat provocative for the Justice Department, even if the gunshots were altogether unrelated to the core ideas behind legalization. 

Here's how Bard summed up the major downside for the drug reform movement from this shooting: 

The shooting is obviously a blight on the movement, even though it was gang related and had nothing to do with cannabis whatsoever. It will be used by the mainstream media and opponents of legalization as ammo to perpetuate prohibition and negate the benefits of marijuana. It now makes our job as part of the movement to spread awareness and truth even more vital to the long term goal. One bad seed certainly shouldn't spoil what is generally a very peaceful and genial movement, but we'll see what its immediate impact is. I'd be shocked if Denver allows the Civic Center smokeout to occur again, though, that's for sure, and other rallies nationwide of its ilk may be affected. But who knows how opponents of legalization will spin it.

Ethan Nadelmann, the Executive Director of the Drug Policy Alliance, had this to say about the shooting:

What can one say?  Shootings are bad.  DPA opposes all forms of violence.  One significant benefit of legalizing marijuana, as with repealing alcohol Prohibition [eighty] years ago, is taking the market out of the hands of those who might be more inclined to use violence to steal, extort or resolve disputes in the marijuana industry.

Is it the end of the world for marijuana reform? Probably not. But the pot legalization crowd really needs this to be a single, unrelated and unrepeated incident. 

The success of legal marijuana in America is predicated on the success of two experiments. If one of those experiments begins to go wrong — and if this sort of violence isn't isolated — then it's quite bad.

Still, all evidence seems to point to the contrary here — a single isolated event that happened to take place in proximity of a major marijuana convention — so don't expect a crackdown or a slowdown any time soon. 

SEE ALSO: Meet the entrepreneur who wants to be the country's first marijuana industrialist --->

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We recently had the chance to chat with Ethan Nadelmann, founder and executive director of the Drug Policy Alliance, an organization that has been at the forefront of the country's marijuana legalization and decriminalization efforts. 

Here are the most important things he told us about the movement to reform the country's marijuana laws: 

Marijuana legalization activists are not making the same mistakes they did in the 1970s, when they assumed victory was certain but support dropped off unexpectedly:

"Part of what’s important is to remember the lessons of the past. Marijuana is not going to legalize itself. Our opposition is not going to take its current defeats laying down [...]

People believe that a generational shift makes marijuana legalization inevitable [just like] back in the late 1970s.  Notice that support dropped by the late 1980s.

It would be a mistake for the people who advocate for legalizing marijuana to be overconfident, let’s not take success for granted, let’s keep being strategic about how we proceed."

Right now ballot initiatives are the most important strategy. The first victories are always through ballot initiatives, then subsequent victories can come through legislatures:

"As with medical marijuana, the first seven states to legalize medical marijuana [...]  were  done through the initiative process. Then the next ten states since that time, half were more or less through the initiative process and half were through the legislative process."

California and Oregon are probably next, then start watching the polls:

"So it means California in 2016, it means Oregon probably 2016 and maybe sooner. The way to look at this is to look at two things.

First, what were the first states to legalize medical marijuana, because that will give you a good idea of what’s next with full legalization. Those are generally the western states plus Maine.

The second thing to look at is where you see majority support for legalizing marijuana. Keep in mind, you never run a ballot initiative to educate the public. You only run a ballot initiative where a majority agrees with the objective and where the legislature or the governor aren’t willing to take public opinion into public law."

The success of the movement depends on their success in keeping pot away from kids:

"We need to be attentive issue of young people using marijuana  — the issue of young people waking and baking and smoking daily is something that nobody wants. I

That’s why at Drug Policy Alliance we have a major emphasis on young people, the parents, the schools and marijuana use. If you look, we put out these documents called "Safety First." We allied with the California [Parent Teacher Association] around this issue so it’s important that the advocacy for ending marijuana prohibition be combined with a responsible approach  toward marijuana use and especially towards issues of irresponsible use of marijuana by young people."

If tying safety to advocacy sounds a lot like what the NRA does, that's not accidental.

"You see the alcohol industry doing the same thing. Obviously for us, our role models are the most successful advocacy organizations regardless of their issue. It may be Planned Parenthood, it may be the NRA, it may be Human Rights Watch. They all have success in influencing public opinion and legislation. 

What’s important is not the politics of these organizations but their success.  We're using their methodology even though we have dramatically fewer resources."

Finally, the similar trajectory between marijuana legalization and the gay marriage movement should be very encouraging for advocates of drug policy reform. 

"With the marijuana reform movement, we really feel like our big brother is the gay rights movement. The issues are so similar. First of all, if you look at the public opinion polls  Look at the Gallup poll on gay marriage legalization and look at the public opinion poll for marijuana legalization. They line up almost exactly between 2006 and 2011." 

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A new study suggests that legalizing smoked marijuana for medical use isn't necessary — the active ingredient in marijuana, available in pill form, actually relieves pain longer than the smoked stuff. 

The drug in question, introduced in 1985, is used to treat nausea and vomiting caused by chemotherapy, and loss of appetite cause by AIDS or anorexia nervosa. The generic name is dronabinol, and is sold as Marinol in the U.S.

It contains a lab-made version of Tetrahydrocannabinol (THC) the active ingredient in smoked marijuana. You need a prescription to get it.

The pill form takes longer to set in (about 45 minutes versus 15 for smoked marijuana), and its effects peak between two and four hours after taking a dose. The brain-related effects can last up to six hours, while the appetite stimulation effects can continue for a full day.

The latest study, published Monday, April 22 in the journal Neuropsychoparmacology, indicates that the pain-relieving effects of Marinol actually last longer than the pain-relief effects of smoked marijuana.

This is good news because smoking marijuana has more health risks than orally-administered marijuana in pill form: The smoke from the burning plant produces carcinogens, while higher levels of intoxication from smoking make driving dangerous.

In the new study, researchers compared the pain responses of 30 daily marijuana smokers when given a pill (either Marinol or a sugar pill) and given marijuana in smoked form (with varying levels of THC.

The patients didn't know how much of a THC dose they got or if it was the pill or the marijuana smoke through which they got it.

They were tested for their pain reaction by submerging their left hand in ice water until they couldn't handle it any more — the longer they held the hand in the water, the higher their pain tolerance was. The researchers also tested their intoxication levels and other effects of THC.

They found (from the paper's press summary) that:

The results show that compared to placebo, marijuana and dronabinol decreased pain sensitivity, increased pain tolerance, and decreased subjective ratings of pain. Compared to marijuana, dronabinol produced longer-lasting decreases in pain sensitivity and lower ratings of abuse-related subjective effects.

Previous studies have shown that the impact of Marinol isn't the same on all types of pain. It doesn't work well for post-operative pain or inflammatory pain. Also, the subjects in the test were chronic marijuana smokers, so non-smokers might react differently to the pill-versus-smoke test, the researchers warned.

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Pot magazine High Times held its annual Cannabis Cup this past weekend in Denver. 

The event coincided with the broader "4/20" celebration, which was marred to some extent by a shooting.

There's considerable effort put into the development of new, interesting, and potent strains of marijuana.

The industry is in a major period of innovation following legitimization last November after ballot initiatives in Colorado and Washington made marijuana legal. 

That's why this event was one of the most important events,  the first such Cannabis Cup in the post-legalization era.

Here are the winners for U.S. Mixed Flowers: 

First Place: Platinum Girl Scout Cookies by Private Stock LA

The Platinum Girl Scout Cookie is a strain made famous by Berner, a San Francisco rapper.

Here's how one dispensary described the original Girl Scout Cookie on  their menu on WeedMaps: 

Girl Scout Cookies has quickly becoming a west coast favorite, with elegant, yet powerful flavors of sticky cotton candy, earth, fruit and spice all wrapped up into one pungent flavor-combination with a long-lasting almost all-day effect that will leave you lethargic for hours after you "come down" from this fantastic medicinal strain.

Second Place: Chem Tange by La Conte's North

Chem Tange sells for up to $250 per ounce  at La Conte's North in Denver. It incorporates tangerine flavors, but there are not a significant number of reviews available to describe any further attributes.

UPDATE: The grower got back to us and described their victorious entry as follows:

Chem Tange is a 60/40 sativa-dominant hybrid.  The unbelievable tangerine smell is almost as incredible as the taste.  This strain gives off a wonderful and unique aroma when smoked.  The lineage is a Colorado mystery.  This cut is worshiped by many Colorado locals and is also known simply as "The Tange". 

Third Place: Kosher Kush by DNA Genetics

According to creator DNA Genetics:

 It is a stinky over the top strain with an average yield making all who smoke it feel "blessed". She grows tall so pinching will help tame her as well as beef up the yields. She is easy to grow for the beginner and a challenge to master for the expert. The Kosher can handle moderate to heavy nutrients and has a great bud to leaf ratio making her easy to trim. Kosher Kush will instantly become your favorite smoke. 

Here's how one dispensary described it on  their menu on WeedMaps: 

Great for insomnia leaving you feeling sleepy, pain relief, uplifting effects good for stress or depression, Uplifted Euphoric.

Click to see the full list of winners.

SEE ALSO: The Real Story About Marijuana Legalization According To A Top Insider In The Movement

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After police noticed a "strong smell" coming from Justin Bieber's tour bus parked on a fan-infested street outside of the Grand Hotel in Sweden Wednesday, cops raided the bus and found "a small amount of narcotics,"reports TMZ.

"When the bus left the hotel and headed toward the Globe Arena, the officer contacted a special narcotics unit, which issued a warrant to search Bieber's bus," according to TMZ.

Swedish papers are saying police found weed on the floor of the bus, along with a a stun gun — which requires a permit. No one was on the bus at the time of the search in the arena parking lot.

Swedish police tell TMZ that no one will be charged because "they have no idea who was in possession of the drug since the bus was empty" thus, "they have no clue who brought it on."

Bieber was with his friend Lil Za hours before the incident — the same pal who was seen smoking pot with Bieber at an L.A. home earlier this year.

The two were goofing around in front of the tour bus wearing matching onesies, pictured above.

Since the tour bus bust, Bieber tweeted:

some of the rumors about me....where do people even get this stuff. whatever...back to the music

— Justin Bieber (@justinbieber) April 25, 2013

SEE ALSO: 11 celebrities who are outspoken about their love of weed >

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Massachusetts state lawmakers are trying to ban medical marijuana edibles packaged to resemble tasty treats. 

Rep. Peter Durant, who supports the ban, recently showed legislators photos of "Munchy Way,""Rasta Reeses,""Puff-A-Mint," and other weed that looks like candy. He wants to ban the marijuana candy bars because they could appeal to children, the Associated Press reported.

The state is trying to ban candy-specific weed following its legalization of medical marijuana during last November's elections, making it the 18th state with medical weed.

Florida, where medical marijuana is not legal, is pushing its own pot-related bill. It's trying to ban the sale of bongs, according to AP. If the law is passed, selling marijuana pipes will become a first-degree misdemeanor.

SEE ALSO: Thousands Of Pot Tourists Are Coming To Colorado And Washington This Week To Celebrate Legalization

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How much pot will Coloradans consume once it becomes widely and legally available?

About 150,000 pounds a year, according to a new study by the Colorado Futures Center at Colorado State University. The study warns its estimate is probably conservative.

Put another way, that’s roughly 672 million bong hits per year, which may generate as much as $130 million in tax revenue.

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Amanda Knox is refuting the "party girl" image that plagued her during her nightmarish murder trial in Italy.

Knox, who was accused of killing her study-abroad roommate in 2007, explains her youthful exploits in her new memoir "Amanda Knox: Waiting To Be Heard."

Knox became known in the media as "Foxy Knoxy"— a nickname earlier assigned to her by soccer teammates back home in Seattle — and prosecutors in Meredith Kercher's murder case spread the theory that Knox killed her then-roommate during a "sex game" gone wrong.

Knox was often portrayed as a "sex pot" who liked to experiment. 

Not true, she says.

Knox says her friends back home made her feel inexperienced and told her to "give casual sex a chance." She says she "yearned to break down all the barriers" between her and adulthood, and "sex was a big one."

She goes into some detail about the random hook-ups that were eventually leaked to the press after Italian prison officials (falsely) told her she had HIV and demanded a list of her past sexual partners.

Knox describes meeting a man named Cristiano on a train from Milan to Florence. She makes her innocence and inexperience clear: 

I wondered if Cristiano thought I was cute — the word I used to describe myself back then. The leap to beautiful or sexy was too huge for me to make. In my mind, if that ever happened, it would only be after I'd grown into a sexually confident woman. 

But she quickly had second thoughts: 

We were making out, fooling around like crazy, when, an hour later, I realized, I don't even know this guy. I jumped up, kissed him once more, and said good-bye.

She says the encounter left her with a giant cold sore and oral herpes.

It's clear that Knox wants to establish that she doesn't feel comfortable with the "party girl" label. She spends more time establishing that the casual sex she was criticized for was a product of peer pressure:

Casual sex was, for my generation, simply what you did. I didn't feel that my attitude toward sex made me different from anyone else in my villa. ... I told myself, People have flings. 

She makes the same defense for her regular use of marijuana, calling it "as common as pasta" around the villa she shared with Kercher. Knox says the drug use was "purely social" and "not something I'd ever do alone." She didn't even know how to roll a joint, she said.

Knox also talks about a picture her other roommates took of her with a joint:

Either Filomena or Laura took a picture of me posing with it between my index and middle finger, as if it were a cigarette, and I a pouty 1950s pinup. I was being goofy, but this caricature of me as a sexpot would soon take hold around the world.

Knox seems painfully aware of people's perception of her, and much of the exposition of the book reads as a defense — a series of explanations for her much-criticized behavior.

She is now facing another trial. Knox was initially found guilty of Kercher's murder in 2009, but that verdict was overturned on appeal in 2011. A higher court in Italy recently overturned that acquittal and now her case must be heard again.

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Just over six months ago Coloradans voted to legalize marijuana, and to allow the state to tax and regulate it like any other substance. 

Today the legislature followed through on its side of that vote, passing the legislative and regulatory framework for cannabis production, distribution and sale,  the Denver Post reports. 

Gov. John Hickenlooper is expected to sign the regulations into law. 

According to the Denver Post, the state of Colorado is set to make quite a bit of tax revenue from the arrangement. The bill sets a 15% excise tax and an initial 10% tax on recreational pot sales. The revenues from the sale of marijuana to adults will fund the regulatory apparatus and also go toward Colorado schools. 

All marijuana stores will have to be licensed by the state and be owned by residents of Colorado. 

The Marijuana Policy Project, one of the key advocacy groups working at the state level to decriminalize and legalize marijuana, heaped praise on the legislature in a statement issued today. 

"The adoption of these bills is a truly historic milestone and brings Colorado one step closer to establishing the world's first legal, regulated, and taxed marijuana market for adults," said Mason Tvert, director of communications for the Marijuana Policy Project. 

The Colorado Department of Revenue — which is already experienced with the regulation of the marijuana business after years of successfully overseeing Colorado's medical marijuana dispensary system — has until July 1st to develop the specific regulations called for in the law,  according to MPP. 

In November, voters will have to approve the new taxes in accordance with Colorado's Taxpayer Bill of Rights. The taxes are supported by a three-to-one margin. 

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With marijuana legal or medically available in 16 states, a new industry is rising to capitalize on the new commodity.

Interestingly, many of the entrepreneurs in the cannabis industry are finding a way to run their business without even touching the drug, which remains federally illegal.

One such set of entrepreneurs is Joseph Slotin and Matt Hudson,the team behind MJCharts.com.

CEO Slotin and CTO Hudson are trying to provide up-to-date historical financial data through their Cannabis Price Index. Their firm is one of the many that see billion-dollar potential in the legal marijuana business and are trying to get in at the ground floor.

Here's the transcript of our chat:

Business Insider: What does MJCharts do, exactly?

Hudson: So right now we’re collecting and presenting all the data related to cannabis products, markets, segments, and products within those segments.

We’re interested in presenting market share data, trend visualization and then identifying pricing differentials, identifying strong brands.

We’re looking to provide a resource for retailers, producers, and consumers. We feel that all of those sectors should find value from this data.

BI: Where do you get the data from?

Hudson: We get the data from publicly published pricing — advertisements essentially — and we go out and scrape it. This is directly from the dispensaries, there is no black market data at all that we look at . We feel that is not very useful at this stage of the game. We have built custom spider software that reaches out to directly to stores, however they are publishing that data.

BI: Are you alone?

Slotin: So far we have been. We’re the only people doing historical indices on this. We haven't found anyone else doing this quite the same way — or at all.

BI: So you’re aiming to be the Bloomberg terminal for marijuana financial data?

Slotin: Yeah, I’d agree with that. Absolutely. We’ve always looked at MarketWatch.

Hudson: We’re definitely taking the financial approach to presenting the information. rather than the educational or social approach.

BI: What are your backgrounds?

Slotin: I’ve owned a few companies and worked in some finance and business. I’ve had some startups. I was also a medical marijuana patient for a number of years – still am — so I kind of identified a need here as the industry moves forward.

Hudson: I’ve worked in the tech sector for the better part of a decade. I have a background in system administration and web development. I’m always had an interest in data gathering and data visualization, so this project presented a perfect opportunity for me in that regard.

BI: What was the process like getting started?

Slotin: Well after our initial meeting in December we decided when we were gonna do this I went out to go and look for funding. We got a small amount of start-up funding and we got it working. We’re hoping to branch out and explore partnerships with businesses in the peripheral industry — clinics, garden supply, dispensaries, testing labs.

Hudson: We hope to be able to provide consulting expertise because of our unique views of the market data. So we would hope to be able to answer questions for the growers, like what products to produce or what products to stock on their shelves, to see what other businesses are doing.

BI: How long do you think it will be before the marijuana industry will be considered a serious investment?

Slotin: People are already starting to dabble a little bit, but seriously throwing money at it? It’s moving forward, but I’m looking at one to five years for people to really get into it. I think forfeiture laws are the real obstacle here.

So when the federal government decides to let states do what states do, I think that will have a huge influence. I think statistics and polls [are] showing a political and social change with regards to marijuana and cannabis in general. Things are moving.

BI: What are asset forfeiture laws and why do they make marijuana a risky investment?

Hudson: Currently the way federal laws are written, a business that engaged in touching cannabis at a primary level is still technically subject to federal forfeiture laws.

That means the federal government can confiscate assets including real estate, bank accounts, and it makes it more perilous for people to go into the business.

BI: As an industry what makes marijuana businesses different than regular businesses?

Slotin: I don’t think there is any real difference. It really comes down to antiquated systems at this point and just moving forward. I don’t see the marijuana entrepreneur being any different than the anyone else selling any legal, recreational substance.

It’s just about normalization at this point and we’re moving forward pretty quickly. Gallup poll puts out a stat every year about how Americans feel about federal and state marijuana laws. About two and a half years ago that tipped the scale towards legalization. The hold outs are the people 80 years and older and some southern states. Normalization is happening.

Hudson: You’ve got more risk takers in the marijuana industry. People who are comfortable working with state law and not necessarily working with federal law. There’s certainly a risk-taking aspect and it’s certainly a high-risk investment with regards to federal law. But, we expect to see that change, that’s changing

Slotin: We’d love to see some people who can afford to take those risks jump in and help to push it forward. That would hopefully make a difference.

BI: So at the moment it’s high risk, high reward.

Slotin: I’ve seen numbers all the way up to a $50 billion industry, but it’s hard to measure that because the black market is just a huge part of that too.

Hudson: That’s where we come in. We’re measuring it and we’re publishing what we find. We hope that data helps speed up this normalization process in terms of presenting the facts about what’s going on out there in the industry.

SEE ALSO: Five People Who Are Leading The Fight To Legalize Marijuana

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HELENA, Mont. (AP) — If American society's tolerance for marijuana is now growing, then what happened in Montana illustrates just what can happen when the government decides things have gone too far.

Pot advocates were running caravans, helping hundreds of residents in a day get medical marijuana user cards. Some doctors who conducted cursory exams on scores of people were fined. As the number of users quickly grew, so did a retail industry that led some to dub the state "Big High Country."

Today, thousands of medical pot providers have gone out of business, and a health department survey showed that the number of registered users have fallen to less than a quarter of their 2011 numbers.

The drop was driven in part by a tougher 2011 law on medical marijuana use and distribution. But more than anything, marijuana advocates say, the demise of the once-booming medical pot industry was the result of the largest federal drug-trafficking investigation in the state's industry.

The three-year investigation by the U.S. attorney's office, the Drug Enforcement Administration and other federal agencies wrapped up last week when the last of 33 convicted defendants was sentenced. That allowed its architect, U.S. Attorney Michael Cotter, to speak publicly for the first time on the crackdown.

"For a long time, we were hearing complaints from local law enforcement and from citizens ... that they were tired of marijuana and they were tired of it next to schools, to churches, people smoking it openly on the streets," Cotter said in an interview with The Associated Press.

"It was just something that had to be done," he said. "And the result of doing it the way that we did, it was a strong statement that marijuana wasn't going to be tolerated in Montana."

Cotter said he believes he is on the right side of history, regardless of what is happening in the country. Last fall, voters in Colorado and Washington state passed laws to legalize recreational pot use, and a Pew Research Center poll released last month found 52 percent of Americans think marijuana should be legal.

The Justice Department has yet to decide whether to sue in federal court to block Colorado and Washington's laws under the legal argument that federal laws outlawing any use, possession or distribution of marijuana prevail over state laws.

In Montana, what started out as a system to provide marijuana to those with health problems turned the state into a source for drug trafficking, Cotter said. The industry had ballooned so much and so quickly that drug traffickers were operating under the guise of medicinal caregivers, and the pot was being sent to users in New Jersey, Virginia, Colorado and other states, he said.

Now, marijuana is still in Montana, but it's manageable, he said.

The investigations were split geographically into three parts: Operation Smokejumper, Operation Weed Be Gone and Operation Noxious Weed. They targeted medical marijuana providers dealing in more than 100 plants and came away with 34 indictments, from a longtime state lobbyist to a former University of Montana quarterback.

Most of those arrested argued at first that they were following the state's medical marijuana law. When federal prosecutors, led by Assistant U.S. Attorney Joseph Thaggard, successfully squelched that argument in court, all but three of the providers made plea deals.

The federal Controlled Substances Act, which bans any distribution or use of marijuana, trumps state law, Thaggard said. Besides, the investigation found that none of the defendants was following state law, he added.

"I think that we were confident that if we had to go down that road, we would show just how out of compliance these people were," Thaggard said.

The final scorecard: 33 convictions. Thirty-one made plea deals, two went to trial and lost and the case against the accountant of a provider was dismissed.

Federal prosecutors in other states watched closely as the probe unfolded in Montana, and was widely seen as a success and possibly a model for others, Cotter said.

"Speaking through enforcement action does have the deterrent effect that is needed," Cotter said. "It had the effect that we were looking for, and that was to deter the trafficking of marijuana."

Montana Cannabis Information Association spokesman and Marijuana Policy Project lobbyist Chris Lindsey — who also was one of the 33 providers convicted in the probe — agreed the federal investigation was the main driver in changing the shape of the industry.

But a federal crackdown won't stem the tide of the public will, he said.

Montana residents are increasingly in favor of improving the medical marijuana laws so there is better regulation and better access for those who need it, Lindsey said. "In Montana, it seems our options have only been the wild, wild West or no activity at all. Ultimately, we will be in the middle," Lindsey said.

Cotter and DEA Agent in Charge Brady MacKay, who led much of the investigation, dispute that medical marijuana is beneficial for the seriously ill. They say patients who need the relief that marijuana provides should get it from Marinol, a prescription drug that contains some of the properties of marijuana.

"I think it's Madison Avenue marketing, the person who dreamed up tying medical and marijuana together," Cotter said. "It's a powerful marketing tool. But the fact of the matter remains that marijuana is a dangerous drug and it's harmful to people," Cotter said.

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