Multi-Million Dollar Cannabis Venture Capital Fund in Works, Plans to Target Ancillary Marijuana Startups

A California venture capital firm led by noted MMJ pioneer Justin Hartfield – who co-founded WeedMaps.com –  has launched a new investment fund that aims to pump millions of dollars into cannabis companies, acquire ancillary businesses and help guide fledgling marijuana firms.

Newport Beach, Calif.-based Ghost Group hopes to raise between $10 million and $25 million for the fund – called Emerald Ocean Capital – by the end of the year, Hartfield said. Under that timeline, the fund could begin making investments in early 2014.

“We are just now in the beginning stages of raising money and don’t have an exact amount in mind – we just kind of want to launch the fund and see what the response is,” said Hartfield, who started the fund with Bonfire.com founder Doug Francis. “The response so far has been great, and we are already getting a lot of inquiries.”

In fact, Hartfield said his group has received 150-200 emails from potential investors and others interested in the fund over the past day alone. If the interest actually translates into investments, the fund could raise money more quickly than envisioned and begin funding companies later this year.

Emerald Ocean Capital will focus primarily on the recreational market, seeking out companies that are developing consumer-facing products and services – with a particular emphasis on technology. Other areas of interest include everything from real estate and marketing services to cultivation equipment. The fund will also target companies that cater to other businesses in the space, such as products to marijuana retail shops, cannabis grow operations and edibles companies.

Aside from making investments, the fund will consider acquiring firms and might even start some of its own companies. It will also offer guidance and advice to startup firms it works with (similar to a business incubator), providing office space at the WeedMaps.com office in the Denver area.

“Unlike a traditional VC company, we’re in the same industry that we’re investing in,” Hartfield said. “We want these companies to be able to utilize our expertise and utilize the WeedMaps brand for a licensing fee. We want to help these young entrepreneurs by partnering with them so we can create products together.”

The WeedMaps brand is well-known in the cannabis industry, often regarded as the go-to source for dispensary listings, user-generated reviews and coupons/deals.

The new VC fund hasn’t technically raise any money yet, although its portfolio includes Marijuana.com – which WeedMaps currently owns – as well as an upstart company called Cannabinoid Science Systems that holds various cannabis-related patents.

Even if Hartfield and Francis manage to raise $25 million, the fund will be considered tiny in the venture capital world – where single investments often run into the tens of millions of dollars. But it would be fairly substantial for the cannabis industry, which suffers from a dearth of funding dollars.

In terms of an exit strategy, Hartfield said the fund will earn big returns by eventually selling the companies it invests in or taking them public.

6 comments on “Multi-Million Dollar Cannabis Venture Capital Fund in Works, Plans to Target Ancillary Marijuana Startups
  1. Toni on

    Thank you for coming forwards about Medical Cannabis! I wanted to share my post about my visit the other day with the Mayor of Mesquite~ What I didn’t put in my post the other day is not only did I work in Health Care 28 yrs, I also am a Domestic abuse survivor. The injuries I sustained in September of 2000 resulted in surgical repair of my left cheek, 2 surgeries on my right TMJ (jaw joint) and 2 front teeth. I work as a Patient Advocate With Texas Coalition for Compassionate Care. What this Mayor (public servant) did not only defines intimidation but bullying on all levels. Not to mention the emotional roller-coaster that his behavior inflicted on me. As long as we as a Society allow this kind of behavior from our elected representatives, we are no better than those perpetrating these injustices! Hundreds of Medical patients are already incarcerated in our Jails based on false propaganda and lies. Our Political Leaders refuse to listen to patients, nurses,doctors about this plant and it’s medicinal value! My appointment with the Mayor 6/4/13 please share
    After much anticipation I got up today excited for my scheduled meeting with my Mayor, John Monaco of Mesquite. I walked into his office thanking him for giving me this time out of his busy schedule so we could discuss Medical Cannabis here in Texas. I had purposely not read any news clipping and such on the Mayor as I wanted to go in with a clear open mind. After his introducing a young man present in the office he directed me again to sit down. I shook the young man hand and introduced myself. Put all my data and documents on the table and sat down. I again thanked the mayor for his time. I told him that I recently became a board member with Texas Coalition and am a patient advocate. For the young man’s benefit, I reminded the mayor that I recently moved here to Texas from Washington State and had prior experience working with the Medical Cannabis Community. I told him that I frankly did not understand how politics worked here in Texas and that I wanted to get together with our local officials and get their guidance as we move forwards with Obtaining Medical Cannabis here for Patients. I went to hand him some documents I had brought for him to review. He questioned me as to why I really moved here to Texas. That he himself worked in the Medical field as well as his wife. He questioned me for names of Doctors here in Texas that supports this. I again apologized and told him that I am still getting familiar with everyone and have just recently joined TCCC. I did not have the Physicians name and number as I briefly was introduced to him in Austin. He acknowledges he was familiar with HB 594. He became more aggressive and hostile and began yelling at me. I told him to think about the patients who are sitting for hours during Chemo treatment, and those suffering needlessly. He replied he didn’t care. I told him I was starting to feel defensive because of his treatment. I was hoping that we could open a dialog with our local officials and work together to make good legislation. It was at that point where he made it very clear that he had no interest in hearing anything I had to say or review anything I had brought. He started yelling at me again from across the table. I looked at the young man and back at the mayor and told him that his behavior was inappropriate and that I was a voter and a constituent. He yelled and said he didn’t care what I was. Became more verbally aggressive at which point I apologized to the young man, stood up and told the mayor I was sorry for wasting his time. I thought he would at least keep an open mind. I picked up the documents and reached out to hand them to him. He refused, so I placed them back on the table and told him I knew he would most likely throw them in the garbage, but I wish he would read them and educate himself. I opened the office door as I was walking out of main office he yelled a Thanks for wasting my time as he threw my documents into the trash bin.
    Not only as a Professional with 28 years’ experience with Direct Patient Care, but as a woman, I find his treatment and verbal abuse reprehensible! As an elected official, to treat ANY CITIZEN as he did to me is inexcusable. I do not ever want someone with this type of attitude to ever represent neither MYSELF nor the PATIENTS that I advocate for! This is an OUTRAGE!

    Reply
  2. ali jannati on

    My comment is not related to this article but is more a question for the readers of this publication:
    Does anybody know if there is any truth to the rumors the Philip Morris has purchased massive land sites in California and possibly in Colorado (some 50,000 acers of land) for growing hemp if and when the federal government legalizes the medical marijuana?
    As you can see my consern is tha with a big player such as PM coming into the play at this stage i don,t think the small MMJ businesses will have a chance to grow and be profitable.
    Can someone shed light on this?
    thanks,

    Reply
  3. windy city on

    …all things considered, this(venture capital) is a MUST to legitimize an industry and it bodes well for industrial hemp and medical marijuana as well as legal adult use. This is very good news…

    Reply
  4. Ben - Wikileaf on

    This is very encouraging for start-ups like us! And I definitely think branching outside of the realm of medical cannabis is a good idea. After WA and CO, Im sure states will begin following like dominos.

    Reply
  5. anthony on

    This is great news!!! I’m glad there is opportunity for acquiring capital in the marijuana industry. Most banks won’t even bother with it. I will be sure to run business plan through emerald ocean in the near future.

    Reply

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