Techpreneur Justin Kan Talks Marijuana Investing

aquisitionThis is the time to take risks and pursue “crazy ideas” in the legal marijuana industry.

That was the advice of successful technology entrepreneur Justin Kan to investors and startups present at an investment forum in San Francisco on Monday.

The forum, organized by The ArcView Group, was a two-day invite-only event attended by VCs, entrepreneurs, and lawyers involved in the marijuana industry. Kan was the keynote presenter who spoke on the assembly’s first day.

Lightly infusing his talk with humor, Kan arrived at three solid points on why he is optimistic about pot. Namely: it’s in-demand, there are not many companies in the space yet, and it’s “regulatory arbitrage play” like Uber and AirBnB.

Expounding, Kan said that the national cannabis market is worth $40 billion but with few players so far. This presents “massive opportunity” for investors to have the first-mover advantage.

Kan also pointed out certain parallels of legal cannabis to Uber and AirBnB. In his words, “they’re not pure tech plays.” AirBnB and Uber used to be illegal but their fast-growing userbase enabled them to negotiate with regulations. A similar trend might be said of marijuana, which is still federally illegal but is rapidly gaining favor among voters and in the state level.

According to Kan, companies that are now taking root in legal states despite federal risk are poised to gain the most once the federal policy turns. “[I]t’s almost the perfect timing,” he said, for risk-takers willing to go all in.

Kan’s advice to take risks was exemplified by his beginnings in tech eight years ago, when he started the “life-streaming” business Justin.TV. He admitted that at first, he thought it was an “awful” idea. But as the business evolved into an e-sports live-streaming tool and became Twitch.TV, it gained more traction, having some 60 million viewers last month alone. Twitch.TV was also sold to Amazon in 2014, for a whopping $970 million.

Today, Kan, who is also a Y Combinator partner, affirms that he is “a big believer in… crazy ideas.”

And though he has not invested in a marijuana company yet, he said he is interested in pitches. The ArcView forum was designed as a “shark tank” event where investors and cannabis entrepreneurs got to meet.

Another highlight from the event was the release of the 2015 cannabis market report by ArcView, which revealed huge numbers for the industry, including a 74% growth in 2014.

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