The cannabis industry is the latest trend that Silicon Valley companies are investing in, and for good reason.
Venture capitalists, or private investors who provide venture capital to promising business ventures, are really starting to see the green that this industry is creating. With four states utilizing the recreational use of marijuana, there is certainly profit to be made.
Venture capitalists are looking for any kind of tech company to make it easier to acquire or grow the product, and maybe even lead the tech-marijuana industry. Some of the cannabis-focused technology includes mobile apps, search engines, and on-demand services.
Meadow and Eaze are medical marijuana delivery services, intending on becoming the Uber of cannabis.
Leafly is a cannabis search engine, educating users about the plant’s characteristics as well as providing news and videos for enthusiasts. Last year, Leafly became the first cannabis-tech company to place an advertisement in The New York Times.
Even celebrities are investing in the soon-to-be billion dollar industry. Both Snoop Dogg and Willie Nelson are launching their cannabis lifestyle brands, hoping to create household names in an industry they’ve always been at the forefront of.
For most of the cannabis-tech companies, the end goal is to educate the masses and deliver services as quickly and smoothly as possible.
One of the big players in the industry is Privateer Holdings, an investment firm focused solely on the legal cannabis industry. They own Leafly, as well as brands like Tilray and Marley Natural – a joint effort between Privateer and the Marley family.
It’s certainly not easy to grow an industry overnight, and investors know this – it’s a long-term play for them. But, when the legalization issues are resolved, if at all, the industry looks to bring in around $3 billion a year in tax revenue, according to the Huffington Post. Recent studies have even shown that number jumping up to a whopping $8 billion to $10 billion by 2018, according to NerdWallet. The cannabis-tech industry is just beginning to show growth, yet the big players still remain cautious.
The real issue these companies are facing is the fact that cannabis still remains illegal under federal law. But both advocates and investors believe that the laws are loosening their grip, and even the presidential candidates have frequently stated their opinions.
Colorado was the first state in the nation and the first government in the world to establish a regulated marijuana marketplace. Other states with recreational legalization include Washington, Oregon, Alaska and Washington, D.C. – all bringing in millions of dollars in tax revenue.
Venture capitalists and cannabis-tech developers alike want to see this industry take off, and it may only be a matter of time. However, until the laws change, the illegality of the product coupled with the public’s perspective towards this industry creates some major hurdles to jump. If these hurdles are surpassed, we may see another industry dominated by money-hungry Silicon Valley investors.
Like most technology-focused industries, we’ll just have to wait and see.
Zothner, a junior marketing major from Cary, is an opinion writer