Investors looking to cash in on California’s burgeoning marijuana industry can learn about local start-ups this week at a pitch competition at Expert Dojo inside Santa Monica Place on Wednesday.
“This is a booming, growing economy,” said Peter Vogel, CEO of Leafwire, the company behind the event. “Like any industry, getting in at the beginning rather than the middle or the end, you’re more likely to see bigger, more exciting returns.”
Despite banking restrictions and other complications related to dealing with a product that is still illegal at the Federal level, cannabis-related companies secured more than $1.5 billion in the first quarter of 2018, according to New Frontier Data. Vogel said having a good lawyer is key to participating in the marijuana market.
He said hesitant investors can start with one of 45,000 ancillary businesses that don’t directly deal with marijuana, but supply payment processing software, media, human resources, or compliance aspects of the industry.
“For new investors, there’s less regulation and less exposure investing in those companies,” Vogel said. “It’s an easier entry point.”
Nearly 30 states and the District of Columbia have legalized marijuana for either medicinal or recreational use. Leafwire estimates the legal industry is already worth $9 billion. Given the illegal nature (and stigma) surrounding the drug, many entrepreneurs are inexperienced and need guidance to scale their ideas and secure funding.
In this state, second quarter tax revenue from cannabis totaled $74 million, according to new data from the California Department of Tax and Fee Administration (CDTFA). That amount does not include additional taxes imposed by cities. Santa Monica only recently permitted medical marijuana dispensaries in the city limits and does not currently allow recreational stores.
Vogel’s event here is just one of a national cash call to get more investor money into the industry. He’s hosting similar “Shark Tank” inspired events in Miami, Oakland and Boston this fall. During the Future of Cannabis Pitch Competition, six companies will make three-minute pitches to a panel of judges. The panel of investors will award the winner with a $10,000 PR distribution from AxisWire and tickets to the High Times Cannabis Cup, the industry’s top competition for growers.
Tickets are still available for the event at lajointventures.com and cost $19. The program will run from 6 p.m. – 9 p.m. at Expert Dojo, 395 Santa Monica Place on Wednesday, August 22.