Must-See Cannabis Investing Strategies
Legal pot sales in the U.S. have hit $4 billion and are projected to hit $25 billion in less than a decade.
Silicon Valley venture capitalists want in on this action.
Big money VCs cash in and cash out quickly. Long before most catch whiff of the opportunity.
But not today!
Ray Blanco, our resident marijuana industry expert, will tell you why.
Read on below for more.
Why Pot Investing Is Silicon Valley’s New Target
By Ray Blanco
What do Silicon Valley behemoths like Uber, Facebook, SpaceX, Airbnb and Spotify have in common with a handful of tiny pot companies?
They’ve got the same investors…
Some of Silicon Valley’s hottest venture capital funds are investing in the marijuana industry right now. These aren’t fly-by-night operations, either — they’re the heavy hitters. I’m talking about Peter Thiel’s Founders Fund, Tusk Ventures, DCM Ventures and Y Combinator.
These venture capital funds (and others) have collectively invested hundreds of thousands of dollars into the marijuana market.
And as I’ll explain in a moment, this is a very good development for us.
The venture capital angle is a big deal because just a couple of years ago, it would have been completely unthinkable for these mainstream funds (and their very mainstream, very rich investors) to be pouring money into the pot market. But as you know, a lot has changed in the last couple of years.
Today, New Frontier Data is projecting that legal pot sales will balloon to more than $24 billion by 2025. And that doesn’t even count the companies that sell growing equipment and provide secondary services to the pot market.
It’s not hard to see why venture funds are falling all over themselves to invest in emerging pot companies.
The poster child for venture-backed pot right now is Eaze:
Eaze is a medical marijuana delivery company — it’s basically Uber for pot. Customers order online and a background-checked driver brings the medical marijuana from a local dispensary to the customer’s house. They also provide an app that can connect smartphone users with a live doctor and issue a medical marijuana card for $29.
In other words, Eaze is making it incredibly easy for consumers to legally access medical marijuana. It’s not hard to see why that business is likely to be a cash cow…
But Eaze isn’t publicly traded. We don’t have access to it, or to many of the other tiny marijuana businesses that venture funds are investing in right now. So you might understandably be wondering why this VC push is a good thing for us.
It all boils down to one word: exit.
Venture capital and private equity funds aren’t in the business of running businesses. In other words, they want to invest, help a tiny company grow and then cash out. That’s central to their model.
One of the most common ways for VCs to exit an investment is through an IPO. That means we’re going to have incredibly powerful, connected venture funds pushing a bunch of high-quality marijuana-related stocks onto the stock market in the intermediate term.
That’s clearly a good thing for us.
And it’s likely to boost demand for the tiny pot stocks that already trade on the market.
Market conditions continue to be quiet right now — and not just for pot stocks, either. But that’s temporary. The market for cannabis stocks is a tidal wave growing in the distance. The tide may ebb and flow in the meantime, but when that tidal wave hits, it’s going to unleash profit opportunities like most investors have never seen before.
In the meantime, we’ll continue to be tactical to bring you the most updated news moving the needle.
To a bright future,