California was the first state to legalize medical marijuana, but like the pimply-faced stoner dude you may have known in high school, it hasn't had the healthiest of relationships with Mary Jane. The Golden State differs from most others with medical pot laws in that it doesn't actually regulate production and sale of the herb. Instead, it lets cities and counties enact their own laws—though in practice most haven't. The result has been the Wild West of weed: Almost any adult can score a scrip and some bud from a local dispensary, assuming, of course, that it hasn't yet been raided and shut down by the feds.
But all of that might be about to change. The California Police Chiefs Association (CPCA) recently announced support for a bill that would put the state in the business of regulating the medical pot trade. Though you'd think cops would have pushed for such a thing decades ago, the reality is quite the opposite: The CPCA and other law enforcement organizations have, until now, opposed pretty much every reform to California's medical marijuana system for fear that anything short of completely abolishing it would legitimize it.
"With no regulations, you get your doors kicked in."
The CPCA's change of heart "is a huge for us," says Nate Bradley, executive director of the California Cannabis Industry Association, the state's marijuana industry trade group. Bradley agrees with his police adversaries that tighter regs would legitimize medical marijuana, which is why the CCIA has pushed for them since the group's inception four years ago. Bolstering his case, the US Department of Justice last year announced that it would no longer raid dispensaries in states that it believes are regulating them adequately—a formulation that seemed to exclude California. New rules issued last month by the Obama administration allow banks to accept funds from pot dealers, but only if they're licensed in the state where they operate.
So why are California's drug warriors reversing course? "We could no longer ignore that the political landscape on this issue was shifting," the CPCA explained in a letter written jointly with the League of California Cities. Polls and changing federal policies suggest that medical pot reform "could be enacted," and that "without our proactive intervention, it could take a form that was severely damaging to our interests."
The bill that law enforcement groups are backing, SB 1262, is flawed, but it's something that "we can work with," says Bradley, who previously worked as a cop in California's Yuba County. Advocates of medical pot don't like how the bill constrains the ability of doctors to recommend marijuana, outlaws potent pot concentrates such as hash oil, and puts regulation in the hands of the Department of Public Health, rather than the Department of Alcoholic Beverages Control.
When my in-laws moved from India to the United States some 35 years ago, they couldn't believe the low cost and abundance of our milk—until they developed digestive problems. They'll now tell you the same thing I've heard a lot of immigrants say: American milk will make you sick.
It turns out that they could be onto something. An emerging body of research suggests that many of the 1 in 4 Americans who exhibit symptoms of lactose intolerance could instead be unable to digest A1, a protein most often found in milk from the high-producing Holstein cows favored by American and some European industrial dairies. The A1 protein is much less prevalent in milk from Jersey, Guernsey, and most Asian and African cow breeds, where, instead, the A2 protein predominates.
"We've got a huge amount of observational evidence that a lot of people can digest the A2 but not the A1," says Keith Woodford, a professor of farm management and agribusiness at New Zealand's Lincoln University who wrote the 2007 book Devil in the Milk: Illness, Health, and the Politics of A1 and A2 Milk. "More than 100 studies suggest links between the A1 protein and a whole range of health conditions"—everything from heart disease to diabetes to autism, Woodford says, though the evidence is far from conclusive.
Holsteins, the most common dairy-cow breed in the United States, typically produce A1 milk. Sarahluv/Flickr
For more than a decade, an Auckland-based company called A2 Corporation has been selling a brand of A2 milk in New Zealand and Australia; it now accounts for 8 percent of Australia's dairy market. In 2012, A2 Corp. introduced its milk in the United Kingdom through the Tesco chain, where a two-liter bottle sells for about 18 percent more than conventional milk.
A2 Corp. recently announced plans to offer its milk in the United States in coming months.
But critics write off the success of A2 Corp. as a victory of marketing over science. Indeed, a 2009 review by the European Food Safety Authority found no link between the consumption of A1 milk and health and digestive problems. So far, much of the research on the matter is funded by A2 Corp., which holds a patent for the only genetic test that can separate A1 from A2 cows. And in 2004, the same year that A2 Corp. went public on the New Zealand Stock Exchange, Australia's Queensland Health Department fined its marketers $15,000 for making false and misleading claims about the health benefits of its milk.
The A1/A2 debate has raged for years in Australia, New Zealand, and parts of Europe, but it is still virtually unheard of across the pond. That could soon change: A2 Corp. recently announced plans to offer its milk in the United States in coming months. In a letter to investors, the company claims that "consumer research [in Los Angeles] confirms the attractiveness of the A2 proposition."
The difference between A1 and A2 proteins is subtle: They are different forms of beta-casein, a part of the curds (i.e., milk solids ) that make up about 30 percent of the protein content in milk. The A2 variety of beta-casein mutated into the A1 version several thousand years ago in some European dairy herds. Two genes code for beta-casein, so modern cows can either be purely A2, A1/A2 hybrids, or purely A1. Milk from goats and humans contains only the A2 beta-casein, yet not everyone likes the flavor of goat milk, which also contains comparatively less vitamin B-12—a nutrient essential for creating red blood cells.
The A1 milk hypothesis was devised in 1993 by Bob Elliott, a professor of child health research at the University of Auckland. Elliott believed that consumption of A1 milk could account for the unusually high incidence of type-1 diabetes among Samoan children growing up in New Zealand. He and a colleague, Corran McLachlan, later compared the per capita consumption of A1 milk to the prevalence of diabetes and heart disease in 20 countries and came up with strong correlations.
Critics argued that the relationships could be explained away by other factors, such as diet, lifestyle, and latitude-dependent exposure to vitamin D in sunlight—and in any case started to fall apart when more countries were included.
Yet a 1997 study by Elliott published by the International Dairy Federation showed A1 beta-casein caused mice to develop diabetes, lending support to the hypothesis, and McLachlan remained convinced. In 2000, he partnered with entrepreneur Howard Paterson, then regarded as the wealthiest man on New Zealand's South Island, to found the A2 Corporation.
Starting in 2003, A2 Corp. sold milk in the United States through a licensing agreement, but pulled out in 2007 after it failed to catch on. Susan Massasso, A2 Corp.'s chief marketing officer, blamed mistakes by the company's US partner, but declined to elaborate. But now the market dynamics may be changing in A2 Corp.'s favor as compelling new research on the A1/A2 debate grabs headlines in the Australian and UK press.
When digested, A1 beta-casein (but not the A2 variety) releases beta-casomorphin7 (BCM7), an opioid with a structure similar to that of morphine. Studies increasingly point to BCM7 as a troublemaker. Numerous recent tests, for example, have shown that blood from people with autism and schizophrenia contains higher-than-average amounts of BCM7. In a recent study, Richard Deth, a professor of pharmacology at Northeastern University in Boston, and his postdoctoral fellow, Malav Trivedi, showed in cell cultures that the presence of similarly high amounts of BCM7 in gut cells causes a chain reaction that creates a shortage of antioxidants in neural cells, a condition that other research has tied to autism. The study, underwritten in part by A2 Corp., is now undergoing peer review in the Journal of Nutritional Biochemistry.
The results suggest that drinking A2 milk instead of A1 milk could reduce the symptoms of autism, Trivedi says, but, he adds: "There's a lot more research that needs to be done to support these claims."
Researchers without ties to A2 Corp. are also lending increasing support to the A1 hypothesis. One peer-reviewed study conducted at the National Dairy Research Institute in India, published in October in the European Journal of Nutrition, found that mice fed A1 beta-casein overproduced enzymes and immune regulators that other studies have linked to heart disease and autoimmune conditions such as eczema and asthma.
The leading explanation for why some people but not others may react poorly to A1 milk implicates leaky gut syndrome—a concept that got its start in alternative medicine circles but has been gaining wider traction in the medical establishment. The idea is that that loose connections in the gut, like tears in a coffee filter, allow rogue proteins such as BCM7 to enter the body and run amok. The body brings in immune cells to fight them off, creating inflammation that manifests as swelling and pain—a telltale symptom of autoimmune diseases such as arthritis and diabetes, and autism.
The A2-producing Normande is a popular breed in France. dominiqueb/Flickr
Though many adults may suffer from leaky guts, the condition is normal in babies less than a year old, who naturally have semi-permeable intestines. This may pose a problem when they're fed typical cow-milk formula. A 2009 study documented that formula-fed infants developed muscle tone and psychomotor skills more slowly than infants that were fed (A2-only) breast milk. Researchers in Russia, Poland, and the Czech Republic have suggested links between BCM7 in cow milk formula and childhood health issues. A 2011 study implicates BCM7 in sudden infant death syndrome: the blood serum of some infants that experienced a "near-miss SIDS" incident contained more BCM7 than of healthy infants the same age. Capitalizing on those findings, A2 Corp. also sells an A2-only infant formula, a2PLATINUM, in Australia, New Zealand, and China.
The mainstream dairy industry in the United States may be more interested in the A1/A2 debate than it lets on. For example, US companies that sell bull semen for breeding purposes maintain information on the exact A1/A2 genetics of all of their offerings. And breeders have already developed A2 Holsteins to replace the A1 varieties typically used in confined agricultural feeding operations. "There is absolutely no problem in moving across to A2 and still having these high-production cows," says Woodford, the Devil in the Milk author, who has in more recent years worked as a consultant for A2 Corp.
But the transition to A2 milk would take a bit of money and a lot of time—probably about a decade, Woodford believes. "The mainstream industry has always seen it as a threat," he says, "whereas another way of looking at it is, hey, this can actually bring more people to drinking milk."
For now, here in the United States, the best way to get milk with a higher-than-average A2 content is to buy it from a dairy that uses A2-dominant cow breeds such as the Jersey, the Guernsey, or the Normande. In Northern California, for example, Sonoma County's Saint Benoit Creamery specifies on its milk labels that it uses "pastured Jersey cows."
The heirloom A2 cow breeds tend to be hardy animals adapted to living on the open range and not producing a ton of milk, but what they do produce is comparatively thicker, creamier, and, many people say, a lot tastier than what you'll typically find at the supermarket.
"People taste our milk and they say: 'Oh my gosh, I haven't tasted milk like this since I left home,'" and came to America, says Warren Taylor, the owner of Ohio's Snowville Creamery, which has been phasing out A1 cows from its herds. For the time being, the switch to A2 milk "is going to be for the small producers—people like us," he adds. "It's just a part of our responsibility."
Remember the "War on the 1%" rant by the poor, embattled multimillionaire Tom Perkins? Well, Kleiner Perkins Caufield & Byers, the venture-capital firm he cofounded, is backing Secret, a hot new social-networking app that has captivated Silicon Valley with commentary that could have come from Perkins himself, for all we know. A sort of anti-Facebook, it lets users post updates to their "circles" (friends and friends of friends) anonymously, which means that instead of cheery wedding announcements and cute cat photos, you get friends bragging and bitching in a fashion you may not have seen at your last dinner party. Given that Secret's early adopters skew towards the tech world, the app is, at least for now, a revealing window into what people in the Valley really think—or at the very least, a fascinating study in trolling. Here are some fairly typical posts from circles in San Francisco and beyond.
Whether waxing poetic about net neutrality or defending the merits of outsourcing, Silicon Valley execs love to talk about how a free market breeds innovation. So it might come as a surprise that some of those execs were engaged in a secret pact not to recruit one another's employees—in other words, to game the labor market. The potentially illegal deals suppressed salaries across the sector by a whopping $3 billion, claims a class-action lawsuit scheduled for a May trial in San Jose, and were done to juice the bottom lines of some of the nation's most profitable companies.
"I don't want to create a paper trail over which we can be sued later?" Google's Eric Schmidt wrote in an email.
Documents filed in conjunction with the litigation, first reported last month by PandoDaily's Mark Ames, offer a fascinating behind-the-scenes glimpse of interactions among the likes of Apple's Steve Jobs, Google's Eric Schmidt, and Intuit Chairman Bill Campbell. In early 2005, the documents show, Campbell brokered an anti-recruitment pact between Jobs and Schmidt, confirming to Jobs in an email that "Schmidt got directly involved and firmly stopped all efforts to recruit anyone from Apple." On the day of that email, Apple's head of human resources ordered her staff to "please add Google to your 'hands off' list." Likewise, Google's recruiting director was asked to create a formal "Do Not Cold Call List" of companies with which it had "special agreements" not to compete for employees.
A few months later, Schmidt instructed a fellow exec not to discuss the no-call list other than "verbally," he wrote in an email, "since I don't want to create a paper trail over which we can be sued later?"
Eric Schmidt Google
Good luck with that. The "no poaching policies," as they were known among senior-level executives at companies such as Adobe, Intel, Intuit, and Pixar, were first exposed by a 2010 antitrust lawsuit filed by the Department of Justice. The DOJ complaint is the basis for the current class action, which was filed in 2011 by the San Francisco law firm Lieff Cabraser Heimann & Bernstein, alleging that some 64,000 tech workers were harmed.
The case, interestingly, has garnered little attention outside of the tech world. Sure, the average middle-class worker probably won't shed a tear for the most likely victim here: Silicon Valley code jockeys and junior execs banking six-figure salaries and perhaps million-dollar stock options. The Bay Area, after all, is recently ablaze with animosity over tech-fueled gentrification and income inequality. And yet the collusion of CEOs to artificially suppress high-end salaries speaks to an economic malaise that affects every working stiff: The widening gap between the rich and poor isn't some accident of free-market capitalism, but the product of a system that puts corporate leaders and their shareholders ahead of everyone else.
"I'm sure you realize the asymmetry in financial resources of our respective companies," Steve Jobs emailed Palm's then-CEO.
The lawsuit describes the rapid spread of anti-recruitment pacts between 2004 and 2007—arrangements perhaps facilitated by the overlap on Silicon Valley's corporate boards: Jobs, who became Disney's largest shareholder after it bought Pixar, served on Disney's board until his death in 2011. Schmidt sat on Apple's board until 2009, and Intuit's Campbell (a former Schmidt adviser) still does. Intel CEO Paul Otellini has held a seat on Google's board since 2004. Such close ties have long been seen as a problem for shareholders, but the nonrecruitment pacts suggest that such cozy relationships could harm workers, too.
Steve Jobs, according to unsealed court documents obtained by Mother Jones, was a leading advocate and enforcer of the nonrecruitment pacts. Two months after entering into the agreement with Google, he emailed Bruce Chizen, then Adobe's CEO, complaining that Adobe was poaching Apple employees. Chizen's reply, that he thought they'd agreed only to avoid "senior level employees," didn't satisfy Jobs. "OK, I'll tell our recruiters that they are free to approach any Adobe employee who is not Sr. Director or VP," he shot back. "Am I understanding your position correctly?"
Chizen responded that he would rather the arrangement apply to all employees:
The next day, Adobe's vice president of human resources announced to her recruiting team that "Bruce and Steve Jobs have an agreement that we not solicit ANY Apple employees, and vice versa."
In one instance*, Jobs allegedly played hardball with a reluctant CEO. In mid-2007, he called Edward Colligan, then president and CEO of Palm, to propose "an arrangement between Palm and Apple by which neither company would hire the other's employees," Colligan testified in a sworn deposition. When he refused, citing the deal's possible illegality, Jobs threatened to sue Palm for patent infringement. "I'm sure you realize the asymmetry in financial resources of our respective companies…" he wrote Colligan in a follow-up email. "My advice is to take a look at your patent portfolio before you make a final decision here."
The Valley's hush-hush wage-control policies have been in play at least since the 1980s, soon after Jobs bought Lucasfilm's "computer graphics division" and renamed it Pixar. As George Lucas later put it in a deposition, firms in the digital-filmmaking realm "could not get into a bidding war with other companies because we don't have the margins for that sort of thing." Lucas and Pixar's then-president, Edward Catmull, made the following agreement, according to the lawsuit:
(1) not to cold call each other's employees; (2) to notify each other when making an offer to an employee of the other company even if that employee applied for a job on his or her own initiative; and (3) that any offer would be "final" and would not be improved in response to a counter-offer by the employee's current employer (whether Lucasfilm or Pixar).
After its purchase by Disney in 2006, Pixar made the same "gentleman's agreement" with Apple, according to unsealed emails from the lawsuit. (Last year, Pixar, Lucasfilm, and Intuit settled their part of the class-action lawsuit for an undisclosed sum in a deal that allows the affected employees to file anonymous claims.)
There's "no evidence that our policy hindered hiring or affected wages," a Google attorney wrote.
In its earlier antitrust suit, the DOJ argued that the Valley's no-poaching agreements were patently illegal—clear violations of the Sherman Antitrust Act's ban on restraining interstate commerce. In 2011, without admitting fault or paying fines, Google, Apple, and four other tech firms settled with the DOJ and agreed to discontinue their anti-competitive behavior.
Representatives for Apple and Google declined to comment for this story, but Google argued at the time that its pacts hadn't hurt workers. There's "no evidence that our policy hindered hiring or affected wages," a Google attorney wrote on the company's public-policy blog. But "we abandoned our 'no cold calling' policy in late 2009 once the Justice Department raised concerns, and are happy to continue with this approach as part of the settlement."
Whether and how the pacts truly affected wages is at the heart of the ongoing suit, which is slated for trial May 27. The defendant firms insist that their employees' salaries weren't widely suppressed because they were based on a "pay for performance" model. That is, workers got raises based on their accomplishments, not on what their coworkers earned.
Tom Perkins, cofounder of the storied Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, could have used a forum at San Francisco's Commonwealth Club to row back from his much-maligned comments comparing the treatment of America's wealthy by the left to that of Jews under the Nazis. Instead, the man who provided seed money for Amazon and Google doubled down, telling the audience that "I think the parallel holds."
It was hardly the only bombshell Perkins dropped during a Q&A with Fortune's Adam Lashinsky, provocatively entitled, "The War on the 1%." Asked to offer one idea that could change the world, Perkins proposed a change to Americans' voting rights: "You don't get to vote unless you pay $1 in taxes…If you pay $1 million in taxes, you should get a million votes. How's that?" (In an interview after the forum, Perkins said he was simply "trying to be outrageous.")