The Cannabis Industry is in Full Bloom
It’s harvest season for hungry investors who are eager to enjoy the fruits of a burgeoning era – legal marijuana. Since legalizing the plant for adult use in Colorado and Washington States, the legal cannabis industry has expanded 74 percent to reach $2.7 billion in combined retail and wholesale sales, according to ArcView Market Research (AMR), the industry analysis division of the San Francisco-based cannabis investment firm, The ArcView Group.
The “Green Rush” as enthusiasts are calling it, could be the next monolithic business domain for investors. And with 68 percent of millennials in favor of legalized marijuana, AMR projects that full legalization of marijuana nationwide could result in $36.8 billion in cannabis retail sales. That is $3.7 billion more than the U.S. organic foods market, which stands at $33.1 billion in sales. If these numbers ring true, that would mean the cannabis industry is on tract to becoming the fastest growing industry in America.
Doing what they can to champion the space, The ArcView Group is connecting cannabis-focused entrepreneurs to the right venture capitalists with their bi-monthly investor forums. Every other month, ArcView hosts a two-day pitch fest where they select 10 budding businesses to present to a room full of interested investors.
MiLLENNiAL was among an exclusive group of press representatives that attended the forum hosted at the LA Hotel in Downtown Los Angeles. The conference room was packed with businesses representing every shade of green.
It was evident the marijuana flower was no longer the dominant market force in approaching viable products, but rather 21st century business models were infusing themselves with a cannabis spin.
The New Buds on the Block
While the marijuana flower will always remain at the epicenter of the industry, it was fascinating to see the complementary products and services that were aligning themselves with the crop. Steve DeAngelo, founder and CEO of Harborside Health Center, the largest marijuana dispensary in the world, and President of ArcView Group points out, “All cannabis businesses are by nature social entrepreneurs. You have to be an activist in order to move the industry forward.”
A few businesses in the room provided unique insight as to how the industry will evolve. Below are some of the more interesting concepts we discovered.
GrowShow: the ultimate online multiplayer marijuana growing game. Players from around the world can compete to create the biggest digital hydroponic grow room, and receive points by accomplishing certain grow goals, interacting in virtual smoke sessions, or even successfully producing specific cannabis strands.
A first of its kind, GrowShow now teaches players the science behind how to start and maintain a flourishing garden. These principles can be used in a real-world scenario and can be applied to any type of gardening technique.
Bud+Breakfast: the premier cannabis-friendly lodging and hospitality company in the US. BnB provides a luxury cannabis experience at three of their Colorado-based locations where guests are free to smoke or eat their marijuana product of choice.
Each location offers an array of Wake n Bake Breakfasts, where gourmet selections of morning goodies are presented alongside uplifting Sativa strains. And no marijuana friendly lodge would be complete without a proper 4:20 Happy Hour. Every day, the hotel offers appetizers, complimentary beer and wine, and of course, the freedom to consume whatever recreational marijuana product guests prefer within the dining and living areas.
Ganja Boxes: a subscription based “box of the month” service for cannabis connoisseurs. In an effort to bring cannabis and tobacco enthusiasts the latest in product paraphernalia, the team at Ganja Boxes provides specialized boxes to their members for a flat-monthly or annual fee. Each box contains five to nine sourced and curated items from accessory manufacturers entering the marketplace.
The subscription box model first became successful with Birchbox, a sample cosmetic delivery subscription service, and has now been applied to the cannabis industry via Ganja Boxes. The company will focus on the delivery of quality products with scheduled frequency right to the consumer’s front door.
Healthy Headie Lifestyle: the only in-home, direct sales, and demonstration company for the Cannabis lifestyle. Healthy Headie arranges for customized in-home consultations of top of the line vaporizer devices, tools, and accessories.
The service allows customers to touch, feel, and test the products, while answering any questions that will leave the client comfortable and confident with their purchase. The company also provides 1-on-1 and Group sessions, and is actively recruiting consultants in Colorado.
An Accelerator to Cultivate the Landscape
When Colorado legalized marijuana on January 1, 2014, it was only a matter of time before the cannabis counterpart to TechStars hit the state. CanopyBoulder is now the first and only cannabis focused accelerator program for seed-stage startups working to bring ancillary products and services to the cannabis market.
Some of the companies that have successfully graduated the program include StashLogix, a combination locking kit to store goods and accessories, Highest Rewards, a cannabis staffing agency, and PotGuide, a comprehensive directory for all things related to marijuana consumption such as strain analysis, legal dispensary locations, lodging options, and trending news.
Now in it’s second-class of startups, CanopyBoulder is crying out for female entrepreneurs to join the movement. Patrick Rea, founder and CEO of the accelerator, says due to the lack of female representation in the industry, CanopyBoulder is calling for investors to search for women-led cannabis businesses.
ArcView confirms the desire for cannabis businesses with female founders, saying their forums have raised $1.5 million for businesses with female-based companies since its inception.
Market Trends for Cannabis in 2016
While market investment trends may be pointing toward female owned companies, the products and services receiving an influx of demand include the following:
- product potency and contaminant testing to ensure consumer safety
- vaporizer machines that increase the purity of the high
- Uber-esque delivery systems that satisfy real-time demand
- travel destinations that accommodate the 4/20 lifestyle
The potential for growth within the cannabis industry is exponential…and the numbers haven’t even scratched the surface for hemp-based products. It will be interesting to see the outcome for the legalization of adult use when it reaches ballots in California, Nevada, Arizona, Michigan, Maine, and Massachusetts during the 2016 voting cycle.
Ohio recently voted against the legalization of marijuana, creating one more hurdle for cannabis activists, investors, and entrepreneurs. It will only be a matter of time before the economic prosperity of the industry proves to be a viable American commodity.
Britt Hysen is the Editor-in-Chief and founder of MiLLENNiAL. In addition to being a media entrepreneur, Britt is a passionate humanitarian, international speaker, and an expert on all things related to the global millennial.