Cannabusiness, Tech, and Investor Opportunity at SF Forum

106This week’s Shark Tank-style cannabis investor-pitch forum in San Francisco saw the collision of three worlds: marijuana business, technology, and investor opportunity.

Some 200 investors attended the event, where several dozen cannabis entrepreneurs were given the venue to pitch. Many of the startups presented notable ways through which technologies could be utilized in the marijuana industry.

One of these startups was DNA Trek, a producer of a spray that coats cannabis with grower information and acts as a sort of DNA bar code. Company founder and CEO Anthony Zografos said the technology was developed at the federal research facility Lawrence Livermore National Laboratory. For him, this product is “more suited” to the future of cannabis.

Another startup has already gained support from several members of The ArcView Group, the investor network that organized the event. MassRoots is dubbed as the social network for the marijuana community and provides a mobile app for cannabis enthusiasts. Several ArcView members have helped the startup to raise $1.4 million, and other investors have come in as well.

The app, however, became one of the marijuana-related apps shut out from Apple’s App Store last fall over legal concerns (marijuana, though legal in some states, is still illegal at the federal level).

Despite this, people behind the app remain optimistic. Isaac Dietrich, the 22-year-old chief of MassRoots, is confident that the app’s time will come. He predicts that Apple will eventually change its policy and MassRoots, being “first one in the gate”, will hopefully dominate the niche.

A MassRoots investor, Douglas Leighton, hopes this will be the case. Leighton is a co-founder and principal partner of the global hedge fund Dutchess Capital, and has been backing MassRoots since 2013. For him, the App Store setback has an upside, because if mainstream social media proves unwelcoming to the marijuana industry, then MassRoots can offer a safe haven.

Marijuana businesses and users can use MassRoots as their “cannabis profile”, said Leighton. In turn, the data that can be harvested about marijuana use – for example, when users check in or post about it – will be highly valuable for marijuana-related businesses.

Like MassRoots, the cannabis delivery service Eaze also has an app for users. The app promises to deliver medical marijuana to users’ doorsteps in about 10 minutes. It currently works by connecting users to the closest MMJ dispensaries, but the startup is improving the service Silicon Valley-style: it is now seeking professional drivers who can work in the industry, similar to the approach of Uber and Lyft.

But like in any other industry, it can be tough to distinguish marijuana companies with true potential from those that just have wacky ideas. New Orleans attorney Rodger Wheaton is one of the careful investors in the cannabis industry. Though he has already put in $100,000, he saw “a lot of snake-oil salesmen” in the space.

This is where cannabis-specific investor services come in. Wheaton, for example, invests with the cannabis hedge fund pioneer Poseidon Asset Management. Based in San Francisco, this hedge fund is run by siblings Morgan and Emily Paxhia. To date, the fund has put some $5 million into marijuana companies including MassRoots.

Another provider of investor opportunity is Marijuana Investment Co. It runs the website Marijuana Index, which serves as a free web dashboard for investors in the new industry.

Other startups at the San Francisco event offered more conventional products. An example is Auntie Dolores, a seller of marijuana snacks such as nuts, crackers, and brownies. Founder Julianna Carella was particularly proud of the glazed pecans, which infuse recreational cannabis in a vegan, paleo, and gluten-free recipe. She recommended about three pecans per serving, and the company sells 10-“dose” bags for $20 each.

Regardless of the specific focus of each canna-preneur, ArcView emphasized that the marijuana industry has gained the velocity that attracts investors. Many of these investors may have focused on tech alone, but as Peter Thiel’s recent cannabis investment exemplified, they may likely fuel the projected growth of the marijuana industry this year.

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