Venture Capital Investors are Betting big on the Marijuana Industry
A handful of venture capitalist are staring to invest in the marijuana industry as New Frontier Data is predicting that legal pot sales will balloon to more than $24 billion by 2025. Those that are investing in the marijuana industry are doing so cautiously and keeping track of the Trump Administration’s stance on the industry for any warning signs that the industry could become too risky. However, the investors also say that this is a rare opportunity to stake an early claim in a lucrative market with little competition from other investors. Tusk Ventures Founder and CEO Bradley Tusk, an investor in a marijuana delivery company founded by Orange County entrepreneur Keith McCarty called Eaze, stated:
It’s a completely untapped market with huge opportunity.
According to PitchBook Data, investors have already poured almost $30 million into marijuana-tech startups that sell marijuana-related technology or use technology to sell cannabis products. Much of that money is coming from niche firms created exclusively to fund cannabis-related businesses, but this year is poised to pass last year’s total of $49 million. Many venture capital firms are not allowed to invest in the marijuana industry because of agreements with their limited partners. However, most venture capital firms are unwilling to invest in the marijuana industry because marijuana is still illegal at the federal level. We will have to wait and see just how lucrative the marijuana industry will be next year when marijuana is officially legal for recreational use.
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