Five startup cannabis firms have received commitments for a combined $1 million in financing from angel investors, providing yet another indication that the investment climate is improving as marijuana gains more traction and acceptance across the US.
The tentative deals – which collectively represent some of the most significant investment activity in the MMJ industry this year – stem from an event held Monday by The ArcView Group, a company that looks to connect angel investors and entrepreneurs. The investment total could soar to more than $2 million when the deals are finalized in the coming days, according to ArcView officials.
The commitments come on the heels of news reported by MMJ Business Daily earlier this week that a new private equity firm has launched a $250 million fund to offer cash advances and credit lines to marijuana businesses. Additionally, a startup company set to launch this summer will provide a crowdfunding platform for ancillary cannabis businesses. In fact, the company – WeCanna – is one of the five upstarts that received an investment commitment at the ArcView event.
“The real reason we’re seeing investments now as opposed to before, when people were simply looking at making investments, is that something significant has changed in the perception of the growth of this industry,” said Troy Dayton, CEO of The ArcView Group. “I think people up until now were thinking this could be the next great American industry, but they decided to learn all they could about it and get to know the companies so that when the time is right they’d be able to make a good investment. In the last few months, people have realized that now is the time to start making these investments.”
More than a dozen companies took the stage at the ArcView gathering to pitch a group of roughly 50 investors that included billionaires, tech entrepreneurs, small venture capitalists, real estate moguls and founders of successful MMJ companies who are interested in acquisitions and strategic partnerships.
The companies that received funding commitments are based in different areas of the country – including some states that don’t even have MMJ laws – and offer a variety of ancillary products and services but do not actually sell marijuana themselves:
Uptoke: Founded by an engineer, this California-based company makes portable handheld vaporizers – or e-cigars. Uptoke says its products heat up much faster than other vaporizers on the market and also have a much longer battery life. Here’s a clip of Uptoke’s founder – Jason Levin – talking about the company.
Rodawg: With roots in New York and Florida, Rodawg in the process of developing high-end packaging and lifestyle products for the cannabis industry, including smoking cones that can be filled with marijuana, as well as upscale cases and tins for smoking devices.
WeCanna: With founders and staff in California, Oregon and Nevada, WeCanna is gearing up to launch a crowdfunding site specifically for the hemp and cannabis industries, offering individuals a chance to help fund related companies and projects in exchange for recognition and rewards. These “investments” could be anywhere from $5 to several thousand dollars. The idea is that hundreds of people will pitch in whatever they can to help get a business idea or cannabis project off the ground, providing entrepreneurs with the precious funding dollars they typically can’t find elsewhere.
Canna Security America: This Colorado-based company offers a host of security products specifically for the marijuana industry, including alarm and CCTV systems, high-grade locks, steel bars, security doors, safes and fencing.
Apeks Fabrication: Founded in 2001, Ohio-based Apeks built its name offering design and fabrication services for a variety of industries, including the food products, alternative energy, medical, and oil and gas sectors. More recently, it has moved into the marijuana market by offering high-tech extraction systems used to develop cannabis concentrates.
Aside from these five companies, investors signaled their intent to funnel a total of around $100,000 into two nonprofit groups: the Marijuana Policy Project and Students for Sensible Drug Policy. MPP will use the money to form a political action committee that will support cannabis-friendly candidates.
Dayton – who is also a co-founder of WeCanna – said a fair share of cannabis investors are interested in more than just returns.
“In addition to the potential for creating profit, tax revenues and jobs, many of the investors and entrepreneurs are passionate about political change and see the development of a responsible, profitable, and politically engaged cannabis industry as a key element in hastening the day when not a single adult in the world is punished for this plant,” Dayton said.
Indeed, Thomas Dunker, a member of ArcView Group and a real estate investor, said he is preparing to pump money into both the business and political sides of the industry.
“I think now is the time for those who believe in freedom and American enterprise to step up to the plate and make history,” Dunker said.
Photo by Kim Sidwell of Cannabis Camera