The steadily booming marijuana industry has been likened to the gold rush in days past. The industry continues to expand at an exponential rate and those involved are benefiting from the profits. Wealthy tech companies are no strangers to the potential goldmine involved in partaking in the industry. In particular, those located in California’s Silicon Valley, which houses companies such as Uber, Twitter, Snapchat and Instagram, have taken notice, sensing a new opportunity to get involved in the “budding” industry. With Californians voting to legalize recreational marijuana last November, marijuana related business revenues are predicted to skyrocket.
Why California Bud Appeals to Investors
The state is the 6th largest economy in the world and, since 1996, it has housed a very successful medical marijuana industry. Northern California’s Emerald Triangle is home to some of the most expansive marijuana cultivators in the country. Now, the law has opened up the possibilities for profit even further, with the advent of a legal marijuana industry, regulated like alcohol for adult use, and big name tech companies are getting involved. As of January 1, 2018, cannabis will be available to buy from pot stores for people over the age of 21. Adults will be legally allowed to possess up to 1 ounce of marijuana. While it will be legal to consume cannabis, it must be done in private.
Merging Technology and Cannabis
This opens up a whole new market for marijuana in California. Previously, a doctor’s recommendation was necessary if you wanted to go into a store to buy the plant. Now it will be legal for the public and investors are champing at the bit to get involved. According to STAT, Benchmark is one of those companies. They invested $8 million in Hound Labs to create a device that let’s drivers and police know if someone is too high to drive. They are just one in many who are investing in a host of tech related products and services including marijuana skin patches, new vaping methods and apps like PotBot which searches through 750 different marijuana strains, using lab research and DNA analysis, to help people find the perfectly matched strain for them. Cannabis investors have already seen a high rise in profits. “Marijuana Business Factbook 2017” from Marijuana Business Daily predicts that U.S. sales will rise by approximately 300% between 2016 and 2021 to about $17 billion.
Problems with Banking
The issue of banking still remains a problem for marijuana businesses. The plant is still being classified as a Schedule I drug, placing it in the strictest drug category alongside heroin and LSD. While many bipartisan bills exist to try and change the laws surrounding marijuana, the current Attorney General Jeff Sessions, who is a long time prohibitionist, is trying to keep it illegal. This makes it very difficult, if not impossible, for banks to provide services to cannabis related businesses. California’s State Treasurer John Chiang is working to build a parallel banking system to override the federal laws that make banking difficult.
For now, the industry continues to boom and with so many big name tech moguls getting involved, we are bound to see many exciting marijuana related technologies born in the coming years.