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HIGH TIMES MAGAZINE (MAY 2004)

CHILLS OUT

Chris Hill started CHILLS Tobacco in his father's garage at the age of 22. When yearly sales hit $3 million, the National Republican Congressional Committee named him "Republican of the Year" in Florida. Then a team of Iowa federal agents flew south to raid his home, his store and the factory where he manufactured CHILLS pipes, and Chris Hill went to prison.
BY DAVID BIENENSTOCK

Chris Hill is trying to make up for lost time. He shifts gears in his Porsche convertible, accelerating through light traffic on the highway between Tampa and his home in Sarasota. The car is not new, but it's new to him. He sold his last Porsche a year ago, right before reporting for duty at a federal prison camp.

Shouting over the noise of the revving engine and the salt air whipping above his head, Chris explains that he'll never really make up for lost time, or any of his other losses. He's been out of prison for six weeks and is trying to build a new business from the ashes of the last one. He's separated from the mother of his children and trying to piece together a new family from the one that was torn apart. And he's making progress. Putting the past behind him like the yellow lines on the asphalt.

Chris Hill started young. His first entrepreneurial venture consisted of selling sunglasses through classified ads in Rolling Stone magazine. After breaking even, and while still in high school, Hill moved into pushing high-end foreign cars at a personal markup, operating as a "kitchen-table broker" in the pre-Internet '90s. Over the phone, no one knew his real age.
And then, after a few years shuffling through community colleges and false-start business plans, he finally had the million-dollar idea—and he had it while stoned.

"I was in Wisconsin on my way to a boys camp where I was going to be an instructor in French, water-skiing, and Native American studies. I was smoking with a friend, and I'll never forget his pipe. It was a 1 3/4" by 12" purple Matrix waterpipe," Hill recalls, fondly. "My friend told me they were sold all over the country and that he paid about 24 bucks for the one we were smoking. That's when I looked at it, turned it all over, and said to myself, 'Man, I bet I can make this thing for about $4.' And it turned out I could make it for a little less."

And so CHILLS was born, started up in Hill's father's garage with $4,500 in student loan money. The young man at the helm practiced a simple mantra: sell, sell, sell, spending 19 hours a day developing, sourcing, and manufacturing alternative smokeware (waterpipes, hookahs, handpipes, glass, ceramics, etc.) and pushing his brand. The start-up soon grew out of the garage and into a condemned warehouse by the interstate, then moved-on-up again to downtown Sarasota. With a loan guarantee from the federal government's Small Business Authority, Hill eventually bought out two neighboring buildings and began wholesaling smoking apparel nationwide.

In its last year of US operation, CHILLS had annual sales of over $3 million dollars, 35 full-time employees, a 401K retirement plan and a simple formula for success. Despite the dubious (read doobie-us) nature of the merchandise, the CHILLS business plan was anything but radical.

"We prided ourselves on three things: product quality, customer service and same day shipping." Hill explains. "It's those three things that grew the company."

The highlight of Chris Hill's business career came at the 1999 Inc. 500 awards, where Inc. magazine included CHILLS in its annual list of the fastest-growing private companies in the United States. He attended a black-tie ceremony in Vail, accepting the award from Colorado governor Bill Owens. For Hill, who decided to forgo an acceptance at the Sorbonne in Paris to stay on with a then-fledgling CHILLS, the award was his personal "college graduation."

Chris Hill never saw it coming. He'd read the drug paraphernalia laws, including a 1994 Supreme Court decision, and strove to keep CHILLS in compliance to the letter. Drawing his personal and business philosophy from the novel Atlas Shrugged by Ayn Rayn, the young entrepreneur saw himself as engaged in "activism through commerce," objectively creating the world he wanted to live in and refusing to acknowledge any false limits on his freedom. Unfortunately, federal agents in the Southern District of Iowa read a different book, and then threw it at him. The government compiled an extensive case against CHILLS based on sales to headshops in Iowa, charging Hill with heading a conspiracy to sell drug paraphernalia. The legal standard: He sold pipes to stores, and they sold those pipes to someone "likely to smoke marijuana."

The raids came less than two weeks after the terrorist attacks of September 11. Dozens of federal agents were involved, including a team of DEA agents flown down from Iowa for a taxpayer-funded trip to the Sunshine State. While their colleagues scoured the country in a desperate manhunt for Al-Qaeda "sleeper cells," these guys were busy protecting America from itself.

In the end, Chris Hill copped a plea. Threatened with sentencing possibilities that ranged from 20 years imprisonment to the death penalty, and feeling under funded in his effort to buy justice through the courts, Hill agreed to 14 months in the minimum-security prison camp at Saufley Field Air Force Base in Pensacola, Florida, plus probation. In February 2003 John Ashcroft's Justice Department expanded the war on paraphernalia with Operation Headhunter and Operation Pipedreams, charging 55 people (including Tommy Chong) following raids on pipe-selling businesses from Pennsylvania to California.

“Today’s actions send a clear and unambiguous message to those who would poison our children,” White House Drug Czar John P. Walters boasted following Pipedreams. “We will bring you to justice, and we will act decisively to protect our young people from the harms of illegal drugs.”

And so the Drug War rolls on—unchecked, unbalanced, and out of control.

"I was in prison for 266 days, leased out at 12 cents an hour to a private company which was contracted by the Navy to provide grounds maintenance at Pensacola Naval Air Station," Hill says. "And every day, on the way to work, and on the way back to the prison, I had to pass at least one headshop and two billboards for other headshops selling the same pipes I went to prison for selling. They're all over the country. So is it illegal? I guess so, I went to federal prison for it."

You've been an entrepreneur since high school. What motivated you?
My motivating factor is always money. That's why I do business. What prevents someone else from doing what I did is fear of risk. I've never understood it.

What was your lifestyle like as the business grew?
I was living in a $300-a-month apartment with my fiancée, and I kept it that way for a long time because I needed to be frugal. You never know what's going to happen. I wouldn't even add a $200 drill press unless I could make the money back in thirty days. I'm a risk-taker, an entrepreneur and a business-builder, but I'm also conservative. If I hadn't been conservative I'd have lost my house by now.

When did you get involved with the Republican Party?
I've been a Republican since I was 18. It's supposed to be the party of small government, individual rights and economic conservatism—although we all know that's not true anymore. There really isn't a party that represents those ideals. [Prior to my arrest] I was getting ready to get involved in federal politics. Members of the traditional tobacco community approached me at the Retail Tobacco Dealers Association tradeshow about making a run for congress in the seat that Katherine Harris now occupies.


Do you still consider yourself a Republican?
Yeah, I guess I'm an idealistic Republican. It'd be nice to see the party go back to what it's supposed to be.


Will you vote for George Bush in the 2004 election?
I’m forbidden from voting.


Would you?
No. I don't think I'd vote for anyone. I never thought I'd say that. The reason felons can't vote is that it prevents a very large political force from being represented. Felons can't even associate with other felons if they're on probation, and everybody's on probation. Somebody needs to organize all of the convicted drug felons and their families into a political action committee. Prison has become an out-of-control industry, and it's a growth industry that's also a drain on the economy.


So how did you end up with an award from the National Republican Congressional Committee?
I really don't know. I was named honorary co-chairman of the Business Advisory Council for the National Republican Congressional Committee. Then I was named Small Businessman of the Year and Republican of the Year in Florida, which they award to 20 or 30 different people. I was invited to play golf with four congressmen the week before I went to prison. When they found out a convicted felon had won the award, they said, "Oh, it's based on donations, and this and that." I donated $200 to the Republican Party in 1996 for some random thing, and that's the only time I've ever given any money to any political party. So it's not a donation-based issue.


What kind of safeguards did CHILLS implement to stay out of trouble?
We didn't sell pipes we thought there was a chance of smoking crack with. We didn't sell scales. We didn't sell baggies. We sold our products only to licensed tobacconists. We even did our own internal investigations. We would call retailers on the phone and trick them, asking, "Do guys sell drug magazines, do you sell bongs, this and that.” We closed out our biggest account plus 200 others during Christmas of 2000. I was trying to regulate myself so the government wouldn't come in and do it for me. I was always worried about the other guys in the business, who were doing stupid things and looked like they were promoting drug usage. I thought there was going to be problems with these companies that would lead to problems for me. But because we had the biggest brand name in the country, that was what brought the attention to us. I think they took me down because we had the best chance of winning in court.


When did you suspect there could be a legal problem for your business?
I knew in March, six months prior to my arrest, that there was something happening in Iowa relating to CHILLS. I didn't engage the US Attorney's office because I thought they would have an investigation, find out how we market ourselves and do business, and leave us alone. It was the most naive thing I've ever thought in my life, except for thinking the dude renting a room in my house when I was in prison wasn't fucking my fiancée. Obviously I was wrong on both counts.


What was the first official contact you had with law enforcement?
"Chris Hill, I'm here from the DEA, and I have a warrant to search your home." And my jaw dropped a little bit, because there were 25 people standing outside my front door. And then, "We also have a warrant for your arrest." And that's when my jaw hit the floor. They asked me to step outside, and I said no. I was in shock. So basically, they just moved me aside, and people flooded in and started going through boxes, drawers, and drilling holes in the walls. Everything. You don't know humiliation until you've changed diapers with handcuffs on.


Did they treat you like a hardened criminal?
The main guys treated me with respect. They didn't kick in the door or put their feet on my throat. But the guys that were with them, I don't know what to say about them. The agents from Iowa were in Florida for about ten days. I saw one of them at the water park with his family. He wasn't a guy I'd ever dealt with; he was just there at the raid. Everyone was at the raid: postal inspectors, the DEA, US Marshals, state police, local sheriffs, and at my store there were city cops—these are city cops who I know, who have come in when the burglar alarm is going off and I gave them pipes.


What did you tell your children?
Nothing. I played it off like these guys were my friends. The kids were young enough that they didn't really get it. But the time I was gone is going to have permanent repercussions on my children. And the fact that I was betrayed and abandoned by their mother while I was inside, that's going to be the worst part on the kids—growing up in a broken home.


You were busted in Florida by Iowa agents. Where did you appear in court?
Des Moines, Iowa. I went to Iowa seven or eight times, all at my own expense. Fly into Iowa. Fly into Iowa. Fly into Iowa. For preliminary hearings, to meet with my attorney, or to try to work out a plea. We came up with Operation Panacea, which was our cure-all. It was a motion to dismiss based on exemption from federal law, but they never even let us test it. They said try it, and we might charge you with the drug kingpin act (a.k.a. continuing criminal enterprises), which includes a 20-year mandatory minimum sentence, up to the death penalty. At first my attorneys laughed and said there's no drugs in this case. But then they read the law: Technically, paraphernalia was a drug crime, I had five or more employees, I had three or more related transactions, and I probably made a substantial income. Those are the factors that determine if someone is running a continuing criminal enterprise; therefore, I could have been convicted as a drug kingpin. And I think if they had gotten that conviction, those guys would have gone to bed that night without losing a wink of sleep.


Do you regret accepting a plea bargain?
I wanted to go to trial so bad. My situation could have been the test case, but really, I had no choice. If you ever see a piece of paper that says: The United States vs. Your Name, just plead out. Because they will crush you. I wanted a fair trial, and if I had gotten one, and lost, I could have taken the maximum sentence of 36 months. My lawyers thought we had a 60 to 70 percent chance of winning.


I begged the store owners [who carried CHILLS products] to send me $100 each. I was willing to risk it all, but I couldn't afford the right legal team. I couldn't get the publicity I needed. CHILLS was the test case, because we were a company that was pushing paraphernalia for legitimate uses. Obviously we know people are smoking pot with it, but we strived to stay in compliance.


Does it bother you that people were smoking pot out of your pipes?
No, it does not bother me. It's their own concern. On a personal, medical, environmental, industrial and recreational level, I think marijuana is God's gift to the planet. I smoked marijuana every day for 10 years, up until the day I was arrested. I hope the law changes someday, so I can smoke again.


Did smoking pot have any ill effect on you?
No, not at all. It certainly didn't lower my sperm count. And it didn't de-motivate me while I built a multimillion-dollar business.


How long between the arrest and when you went to jail?
Fourteen months. That was hell. Really depressing. I was sleeping all day. Gained a bunch of weight. I didn't care about losing the business, because I can build a new one. I cared about the 35 people who lost their jobs, 29 of them overnight, for nothing worse than working hard. And I tried to spend as much time with my children as I possibly could.


Was there any sense of relief after your sentencing?
No, there was no relief. I was relieved that my two co-defendants didn't get any prison time, ex-employees who hadn't worked for me in over three years, and who were living in Atlanta and Denver when they were arrested. That was my relief. But I was also terrified for my children. I'm a father who can't spend a day without my kids.


Did you explain things to them before you went away?
No, they were only three and one. Even now, they think I was at school the whole time. Someday, I'll explain what happened, but what am I going to tell my kids? Why did I go to prison? What did I do wrong? Do I tell my kids that the government's bad? I can't say that. Hell, by the time my kids are old enough to understand, pot might be legal. I don't believe that, but it's possible.


How did you prepare for prison?
I always said that if I ever got sentenced to prison I was going to start doing push-ups immediately [laughs]. But I didn't start doing anything until I got in there. I don't know how I made it through that first day. I was still smoking cigarettes. I remember the first time I tried to run around the track; it was a half-mile track and I made it about halfway around, everything went black, and I saw stars. Then I lost 40 pounds, hit the weight pile, and started running three miles a day.


What crimes had the other inmates committed? How did they react when you explained why you were in prison?
Everybody's in prison for drugs. We had everybody from street-level dealers to Escobar's money launderers. I was housed in a kind of barrack with about 100 other guys in one room. When I walked in, everyone was totally helpful. And I was shocked, because there was some thug-looking guys in there. When I told them about my case, they either didn't believe me, or there was just utter shock, because it shows that we're going the wrong way in the drug war. If the authorities are going after manufacturers who make pipes that people might smoke pot out of, what are the chances that they're going to change the drug laws and let these people out of prison?


You underwent a physical change while incarcerated. Was there a corresponding mental change?
Yeah, I lost a lot of my idealism in the way this country is run. But mentally, I became a stronger person. I think I can do anything, nothing fazes me. And I learned patience, big time.


Do you think you can get your idealism back?
I think I can. Individuals can still create change in this country. It's not usually the masses that create change, it's one person—one good activist, or one good entrepreneur is worth a thousand normal people. We live in a great country, where change is possible. I don't believe there's some corrupt evil force that's driving our government. I think it's a government made up of individuals, and we have some of the wrong individuals in power.


What was the first thing you did when you got out?
Well, I ate at Subway, which wasn't exactly my ideal situation. Then I went home to my children. That was the only thing I really cared about. I spent the first three days with them 24 hours a day, and I couldn't have been any happier. And then I ate snow crab.


What was your reaction to the Pipedreams and Headhunter busts that followed the CHILLS case, particularly the attention given to Tommy Chong?
The media should have been responding when I got arrested and was stalking CNN. I thought people would be up in arms, but nobody cared until Tommy Chong got involved. The media just responds to something it finds amusing and interesting, they don't address the fundamental problem that companies are being held responsible for third-party use. They don't realize that this is a stepping stone. The government is already arresting club owners because somebody sold a dime bag in their club. You can't prevent it. You can't stop people from doing things. It has to be their individual responsibility.


If you could talk to Tommy Chong right now, what would you say to him?
I'd tell him that his nine months will go quick and that he's lucky to have a good woman by his side. He'll probably have a good time. I've hung out with him a few times, got high with him a few times—nice guy. But he was asking for it. If anyone was asking for it, I guess it was him.


Do you think the people who busted you really believe this is the solution to some drug problem?
They know this isn't the solution, or even part of the solution, to resolving either a real or perceived drug problem in the United States. It's something else. And I don't think they're bad people, or scumbags, or evil—these same guys protect us from real criminals. The system has just created these careers that may not actually contribute anything to the American people. I don't think they do. The War on Drugs is a joke. I don't know why they fight it so vehemently. I don't know why there's no congressional oversight of the DEA. They keep getting bigger and bigger budgets, while there's more and more drugs that are cheaper and cheaper.

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