The Cannabis Market and Venture Capital

This is going to be simple.  Venture capital works when organizations have an idea that scales upward.  Medical devices, software, lots of other examples.  Competitors in the same space who will compete or compliment in the marketplace are handy as well.

Marijuana farms do not scale.  They are small operations with growth through the addition of new greenhouses.  Everyone wants to grow “the best dope you ever smoked” and that is a time intensive process.  You cannot get rich on this idea, especially when the price of marijuana is trending downwards with the removal of the illegality premium and the desire to make the product into a commodity.  Keeping those damn kids out of your yard is yet another problem.

It is also a challenge when the process is all cash and no real tracking systems to ensure the validity of the books in any direction.  How do you take cash which is tracked and taxed and move it into a cash business with no real information on how the return is to be processed?  The structure of these investment group is designed to avoid legal linkages between members of the organizations and their technologies.

Commodities to enhance your experience do not scale.  Glass containers and metal containers continue to drop in price as they will be manufactured less expensively.  So will the many ways to absorb THC into your system, as users will become less interested in the perfect experience and seek out the price appropriate experience.  Sometimes, we buy the $12 Belgian beer, sometimes we buy PBR.  It’s all the same process in all the markets.

We are currently working with a technology which would be used by law enforcement.  The interesting part in visiting with the VCs in this space is how they see the market.  The growth is limited and the goal is to supply products and consumables for the users.  Unlike other markets, there is no big data upside (Hello, Attorney General Sessions!) or opportunity to do anything other than sell glass and metal things to enhance your experience.

Our application is more of a biotech and of limited interest to a group of people who do not want to see law enforcement in their area.  If you are interested in testing people for THC while they are driving, let us know.

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