Successful startup MassRoots gained $150,000 for a marijuana-centric social network. Credit: Metro World News
A year after the first three states legalized marijuana, it has become an irresistible commodity in a booming industry. The revolution's latest sign came from Seattle this week, where investors paid more than $1,000 just to attend a startup fair and have the chance to buy in.
“It’s an extremely professional event full of high-quality opportunities,” says Isaac Dietrich, CEO of MassRoots, a social media app for consumers. The 21-year-old has secured $150,000 in investment from hedge fund managers, and the only way is up.
“It’s an incredibly exciting industry to be a part of,” says Dietrich. “We’re even drinking with companies competing with us, as there are so many new markets and more than enough money to go round. Every day there is more good news.”
That news includes projected sales figures of more than $2.3 billion next year, according to investors circle ArcView, representing growth of 64 percent — the fastest of any domestic industry. The federal government has not followed through on threats against states legalizing the plant, and a recent Gallup opinion poll showed 58 percent public support for full legalization.
That climate has attracted investors such as Jim Willett, 62, a Navy veteran and social conservative who fully supports the revolution.
“It’s a much broader and more diverse type of company than the early days of just selling (marijuana) pipes,” said Willett, who has made $750,000 from a $150,000 investment in a specialist marijuana security firm, and holds software and agricultural shares too.
The investor sees the boom as a “gold rush” with few risks. “The legal environment is relaxing and there is little doubt this becoming a mainstream commodity. This is an industry created out of thin air, that is starting from zero, and there are opportunities everywhere I look.”
The trend looks set to continue, with California and Arizona among the states expected to legalize marijuana before the 2016 presidential election. “There will be hiccups in creating the tax structure and the price could fluctuate,” said Dan Riffle of the Marijuana Policy Project. “But the most important thing is business investment is taking it out of the hands of criminals, as well as creating jobs. Around half of Americans have used it already, and it can compete with alcohol’s market share.”