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10/22/2010

INTBUS 705 

FROM LEGAL HIGHS TO LEGAL REFORM

A Case Study on Matt Bowden: Stargate International | Developed for UoA International Business 705, by Chelsea Griffin, Jess Maher , Øyvind Bjørnsmoen and Samira Ibrahim

After spending some time in Australia after his first failure Matt returned to New Zealand in 2000 and began producing and distributing party pills with the chemical Benzylpiperazine (BZP). This first stint lasted six months but his second attempt saw the growth of a successful industry and an eight and a half year business. The first began in 1997-1998 when he began distributing legal alternative pills in New Zealand by both order/delivery based sales as well as stocking to retail stores. Matt had two attempts at cracking this industry. upholding a strong sense of motivation and determination in the face of adversity. However his overarching goals of harm minimization prevailed until 2008 when legislation banned party pills in New Zealand.A Case Study on Matt Bowden: Stargate International Stargate International was established by Matt and Kristi Bowden. Witnessing horrific incidents around the use of methamphetamine Matt recognized an opportunity to provide a safer legal alternative for drug addicts. This case talks about opportunity recognition and legal reform in the party pill industry of New Zealand. Matt was met with many legal issues throughout his time in the industry. It explores how a social entrepreneur can drive change in a small economy. A Case Study on Matt Bowden: Stargate International 2 .

with call centre and courier deliveries set up to facilitate sales and distribute the product. The product was a stimulant that upon testing. his music and his children. This idea came to fruition when he began importing merchandise from England and distributing it to his known target market. With various tales of drug abuse. This was the first opportunity point in Matt s entrepreneurial expedition. He began by advertising on websites and on the radio.Int oduction Those who have not had the chance to meet Matt Bowden may perceive him and the industry he is affiliated with as getting away with the unthinkable. Matt instantly saw an opportunity. The experiences he has had paint a rather tumultuous picture of his life in the party pill industry and is the main opportunity recognition point in his career. crime and e ven death. To spark retail interest Matt offered businesses such as The Hemp Store a 100% mark up on the pills. violence. ¡ B ck ound: The fi st pu suit of the legal d ug alternatives In the midst of 1997 1998. However. Matt was advertising for Performance Car Magazine ¡ ¡ ¡ ¡ ¢ when a client with a business proposition approached him.A. He saw it as a potential safer legal alternative to drugs in a society where a methamphetamine explosion and an accompanying surge in violence was prevalent. literally selling you legal speed. He is now a stay at home family man who works with what he is truly passionate about. prostitution. this is a far cry from the truth. realizing that this pill had a purpose and could be used. those suffering from drug addictions. Matt is a true social entrepreneur who believes that he was put on the earth to achieve a purpose which has overrode a lot of the obstacle s and challenges he has faced in his life. A support line and a F. This strategy saw Matt s product rapidly become a A Cas Study on Matt Bowden: Stargate International   £ 3 .Q were also set up. Matt realized was not your everyday pill. evident in the charismatic persona he exudes not to mention his passion for social change. Matt found himself reaching some alternative understandings and perspectives on the matter of drug reform.

However. Matt substantiated his claims with both legal and scientific facts. After careful consideration and advice from his accountants. He witnessed a number of terrible incidents involving methamphetamine. I vowed in my heart that I would never be steamrolled like that by the government again.significant contributor to their cash flow. Matt s first attempt at cracking into a legal drug substitute market was only a six-month stint. named Greg Boyd who conducted an interview with Matt regarding his new venture. He was approached by a journalist. and that next time I would come back with something better and I d last more than six months i. His statements regarding the substance he was marketing were taken out of context and a misrepresentative story was portrayed to the public. Media pressure drove the Ministry of Health to take the issue to the courts. unregulated side of the industry that shocked and moved him. The power of editing demonstrated statements being made about what the pills were capable of doing. While amidst this environment he was exposed to a darker. A Case Study on Matt Bowden: Stargate International 4 ¤ . Matt decided to move to Sydney in 1999. There he pursued the idea of again providing a cheaper and legal alternative to harmful drugs. This was the motivation he called upon to return back to the industry he had previously failed in. it was illegal to make any claims regarding the effects of a substance. some concerning people close to him. However on investigation. the pills were found to contain a substance called ephedrine and a nationwide recall of the product ensued . to the point of reliance on it for profit. Unfortunately this first media contact was not the ideal coverage he was hoping for. but a profound interest was sparked in the legal side of this industry. This became problematic for Matt as under the Medicines Act 1981 law. At this point the venture began to attract media attention. this was not last both the government and the industry would see of Matt Bowden. A sociall inspired return Later Matt was approached by an Australian investor who suggested marketing a product that was in an area of Matt s expertise.

With the strength of his convictions Matt Bowden believed that if we could meet the consumer need without the harms. Matt returned to New Zealand in 2000. They attempted to approach the Australian government. Known colloquially as BZP this substance had been scientifically tested through clinical trials and was proven not to be a danger to consume. Adopting the motto that if you believe in something strongly enough. a non-addictive euphoric stimulant and so they began the pursuit to transfer this into a marketable product. but they were not receptive to it. Matt s product was meeting the same stimulant need to keep them awake between the desired hours of 12 am and 6 am in the morning. they had indicated a liking of the drug BZP ii. They knew that with this compound they might have been on to a winner in their search for a legal alternative substitute. Matt aligned himself with a neuro-pharmacologist and together they began to search for an alterative drug that they could use to fill this niche. Research was A Case Study on Matt Bowden: Stargate International 5 . He decided to make a product for people that are choosing psychostimulants like amphetamines and give them a safer alternative . Soon Bowden s new product became a social. legal substance that was been taken by current drug users. seeing a shift away from the intake of harmful drugs. we could build a better society . Research also indicated that in 1973 trials that were conducted with amphetamine users. Soon they discovered the drug Benzylpiperazine. In order to tackle the escalating methamphetamine problem that was in existence in his home country. Bringing BZP to the market While still in Australia . It became evident that consumer and behavioral trends were changing.He was inspired to try to find some form of safer stimulant that didn t result in the horrific effects seen with methamphetamine use. H e was then able to gain access to the substance BZP and began to make some pills. you can do anything he began to pursue this idea.

He spoke to the government and said. The Sunday Star Times published an article that involved Matt and his business. The article attempted to discredit the politician by associating him with selling drugs that were illegal overseas. Nandor Tanczos. some of them are actually dying around us as methamphetamine users. This is what we are trying to do. so what we are doing about it is we are making a safer alternative . his product was a addressing demand reduction. with the main goal of having a go at Nandor Tanczos. This time around Matt had learnt a bit about how to deal with the media and government and attempted to go straight to the source of the problem.. with around 20 million tablets consumed in New Zealand and no reported fatalities iii. The New Zealand government and the Ministry of Health again got involved with the claims and started an investigation. a lot of our friends are addicted to methamphetamine. Society s way of dealing with our problem is to lock us up in a cage and we think that s wrong. traveled down to Wellington and explicated his mission. Kristi.reporting the pills to be a success.. Matt felt that short comings of this ¥ A Case Study on Matt Bowden: Stargate International 6 . Media and government pressures While the business seemed to be flourishing there were other political issues that needed to be addressed. which has three pillars. One of Matt s major retailers The Hemp Store was part owned by a member of the Green party. with a stated aim at addressing the drug demand reduction strategies. This aligned with the New Zealand National Drug Policy. we can't really put up our hands and ask for help because we are technically criminals now. The laws of suppl and demand The objective of Stargate International and Matt s focus has been on harm minimization. Matt and his wife. The media had its own agenda regarding the politician and thus Matt became once again caught in the middle of media and political cross fire.

these laws or trends are basic laws of economics. The Methamphetamine Action Plan was an initiative. A Case Study on Matt Bowden: Stargate International 7 . They responded by researching further into the topic . which aligned with his purpose. which his product was addressing harm minimization. When these pressures exist the quality of the drugs is reduced and therefore more health risks emerge for people. Because of these newfound trends which supported Matt s argument.eventually you're going to get to the point where it's worth it to crank out a few more grams.policy was identified ultimately at demand reduction. 2010 . then even though you might have been thinking about the fact that it's a couple of years in jail if you get busted. the Government decided to not prosecute and to instead move toward changing the laws to accommodate Matt s vision. If you reduce the supply without reducing the demand. Now once you put the price up and it's worth more. if they're worth thousands of dol lars each. ¦ He also identified another document.1% of party pill users who also used illegal drugs stated that they now mainly used party pills instead iv. which invited community groups to come forward with solutions regarding demand reduction. because users are going to run out and want more. you might think more about that it might be worth it. This trend happens all around the world. Research showed that p eople had stopped taking illegal drugs and in fact were using Stargate International s product instead. Matt proceeded to identify himself as a representative of the dance community a group who don t like to drink alcohol but instead prefer to take stimulants and socialize from late in the night until early in the morning. He indicated that this community would not be able to stop and believed that the use of a demand reduction strategy for them was offering a safer alternative.. They are as set in stone as the laws of gravity and so politicians trying to ban substances and effectively start a drug war have proven to be a totally ineffective policy (Matt Bowden.. or the price goes up. 44. the quality comes down. The demand's going to stay there.

they ve got to go (Matt Bowden. they re bad. § A Case Study on Matt Bowden: Stargate International 8 . His original mission was still strong in his heart and so he identified a way to continue with this while not having his products sold within the industry. saying party pills and alcohol shouldn`t be combined . alcohol advisory groups and so on. He had begun to feel that it was working contrary to the original mission. which were consumed over eight and a half years by 400. no longer just to his original target market. having disagreements with his distributors in the process. A rival industry.000 consumers with no deaths and no lasting injuriesv. He approached all his competitors and negotiated arrangements so that they would help establish a collective fund to pay the legal fees for the industry. not to mention that the industry was based on intellectual property developed by Stargate. This was substantiated with the valid argument that no one had died from taking party pills. as Stargate had effectively been dealing with the government on behalf of the whole industry. 2010 . However with Matt s excellent legal representation he again fought back.The turf war begins Competition arose when rival industries such as liquor stores began to feel an economic sting. The booming party pill trend was seeing in some cases. a statistic that the liquor and tobacco industry could not claim. missing out on its revenue started pushing back and silently behind the scenes driving the whole campaign that party pills are dangerous. They recognized that Matt s industry had sold 26 million pills in New Zealand. This was because the industry became too widespread with pills being sold in d airies and to the general public. As he had not put any patents on his intellectual property . that half the money usually being spent on alcohol going into the pockets of Matt s industry. At the same time as this Matt states that Research started coming out from the fingers of the liquor industry. Matt then withdrew some of his brands from the market. A turf war was happening between the party pill and liquor industry. the marketplace had exploded with competitor products.

so did the evidence of unethical behaviors. Class D could regulate it being illegally sold to someone under the age of 18. As the industry and markets for it grew. Without restrictions on the strength or quality of these products. In 2005 the restricted substance category or Class D was put in place. with a new class of drug being implemented by the government as opposed to an industry shutdown. not being allowed to advertise on the TV. as a regulatory tool for lower risk substances deemed not harmful enough to be illegal. The food safety authority was arguing that the pills were not classified as a food group. radio or magazines and putting limits to how strong the drugs are allowed to be. Matt formed The Social Tonics Association of New Zealand (STANZ). Yet after creating the laws. The result of this was in Matt s favor. By 2006 BZP pills were a commercial success with the industry estimated at being worth £ 8 million annuallyvi. Matt s defense was that this was not the case and ingeniously relabeled the products as social tonics and wrote on the back that this is a harm minimization initiative so that it was really clearly labeled not as a food or dietary supplement. By taking this action. they still developed a type of no man s land for the product where no formal regulations were in place . the NZ Government accepted that there was a clear need for ensuring that some kinds of stand ards and regulations were to be in place. there was evidence of some competitor s pills being up to 16 times stronger than Stargate Internationals.Establishing Class D In return he hoped to stop the government from shutting the industry. A Case Study on Matt Bowden: Stargate International 9 . At this point the industry was facing an imminent shut down with the g overnment preparing for a nationwide recall of the products due to the pills apparently brea king food safety regulations. They were lacking in a category for them so they wrote one up and put it in place As a result of this action it became apparen t that the industry didn t fall under a specific jurisdiction and instead needed a new category with the Misuse of Drugs Amendment Act 2005.

the party pill industry grew. broadening markets and uncovering some unfortunate events which were a result of youth combining the use of alcohol and BZP. This was also a cause for media to pressure the government for further attention and enquiry. All the independent research came back confirming that the pills were of very low or as low as practically possible risk. Now days his expertise in government lobbying and intellectual property on the relative issues of legal alternative drugs has been in high demand. but one commercial institute with strong ties to government came back with claims of serious adverse events. which became clear at a later stage when a whistleblower leaked information about the research. His entrepreneurial actions have transformed New Zealand into a representative sample. The aim of this is to eventually set international standards around drug policies A Case Study on Matt Bowden: Stargate International 10 . Now other countries are able to learn from New Zealand in the battle to minimize the harm caused by illegal drugs. The ban happened as part of a lead up to an election. Before Matt and his lawyers could counteract this.After seeing a surge in the number of competitors. A request for research was arranged which was enthusiastically supported by Matt whom had already extensively researched the cost to benefit analysis of this approach and product. He is also continuing to build New Zealand regulation systems by keeping a safe natural drug within the Class D category. Matt suspected that this research was somehow flawed or misrepresented. Jim Anderton passed a new piece of legislation banning party pills and it was voted through in 2007 and came into force in 2008. Other countries facing similar issues such as Canada and the United Kingdom have called upon him for help. Onwards and upwards Having set backs is not a concept unfamiliar to Matt Bowden. The research failed at peer review stage but was used as a political and media tool. Clearly the lesser harm of the social tonics industry products when compared to alcohol was something he was excited for the researchers and policy makers to explore.

All direct quotations were taken from interview with Matt Bowden. at his home on the 28 September. Now in 2010. This is not something that can be done in larger countries so he urges people to take responsibility. remarking on how cool it is that you can just pop down to parliament and with time and patience you can have some impact on laws and regulations for the better of the country. That s my feeling.unless otherwise stated. He hopes that people try out new policies and do things that are quite progressive. 2010 . as there is a different facet between being a businessperson and a rock star.He is very proud to have had this entrepreneurial experience in New Zealand. Then when he makes a media statement he will be seen differently. He believes that having a commitment to social responsibility through regulating and operating to best safety standards. as we have a small enough infrastructure to allow this to happen. he is in the process of recording a rock album. we have just got to stand up and that for New Zealand as a country we have to stand up I feel like in a sense we have done that and I think that the mission worked in that sense . which will continue to carry on his message. A Case Study on Matt Bowden: Stargate International 11 . you can end up with an industry that is not only sustainable but also beneficial to society. He feels that if he has music out there he can be perceived more like an artist. Notes i The authors wish to thank Matt Bowden for his valuable assistance in the preparation of this case.

nzma.ii Lynn Theron.com/2008_03_09_archive.com/Rebirth/wordpress/?page_id=105 A Case Study on Matt Bowden: Stargate International 12 ¨ .ac. Retrieved from: http://www. Emergency Department Overdose Database (2002 2004) compared with ecstasy. Centre for Social and Health Outcomes Research and Evaluation & Te Ropu Whariki. Retrieved from: http://www.mattbowden. Remix magazine . Retrieved from: http://www.com/Rebirth/wordpress/?page_id=105 iv Chris Wilkins.shore. Melissa Girling. Jennifer Miles (2007 Benzylpiperizine-based party pills' impact on the Auckland City Hospital. Paul Sweetsur.html v vi Lizzi May (2006) This Man wants to sell you legal ecstasy. Dr.blogspot. John Huakau (2006) Legal party pill use in New Zealand.mattbowden.nz/publications Peter Cresswell (2008) Retrieved from: http://pc. Taisia Huckle. Remix magazine .nz/journal/120-1249/2416/ iii Lizzi May (2006) This Man wants to sell you legal ecstasy.org. Retrieved from: http://www. Karl Jansen.