For early tech investors, big green should yield a big harvest. Propelled by an influx of venture capital funding for innovative startups, amenable state legislation, and increasingly normalized consumer values, the legal cannabis market is blooming.
According to leading cannabis industry trade publication Arcview Market Research, the marijuana industry is expected to exceed $21 billion by 2020. States where marijuana is legal have served as marketplace laboratories for entrepreneurs, said Max Simon, founder and CEO of Green Flower Media. "[The cannabis industry] is the fastest growing industry in the US right now and is rich with opportunity," he said.
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Green Flower Media aspires to be the Lynda.com of legal cannabis. The startup is a health-focused knowledge base and media platform. Using a combination of Ruby on Rails, PostgreSQL, and Amazon's AWS stack, Green Flower streams and archives educational and how-two content. The archive is locked behind a subscription paywall.
The company, Simon said, works with over 200 doctors, scientists, and entrepreneurs to inform and produce content. Green Flower produces a trade magazine that publishes industry research, papers, and data. The integrated platform is growing by 22% per month, which the company claims demonstrates a fast-growing legal cannabis market.
Technology could have a massive impact on the cannabis market, Simon said. When states began legalizing marijuana, innovators and investors rushed to fill one of the remaining holes in a mature, albeit underground, market: technology. As a business owner, he says "the [market] in cannabis is the most fascinating I've ever seen."
Simon went on to explain that tech is shaping a new cannabis industry. "From edu-tech platforms like ours," he said, "to [e-commerce] services that allow you to find the perfect dispensary and strain for you, technology is accelerating the growth and accessibility of cannabis like never before."
He cautions that the gold-rush state of the tech-rooted cannabis industry resembles the dot-com boom of the late 1990s. "On one hand there is a tremendous opportunity for wealth and impact, especially in technology," he said. "On the other hand, you are already starting to see market leaders in different domains. The key [for business] is to look in the spaces where it's still wide open, like SaaS, ag-tech, bio-tech, and even traditional services, like legal, financial, and consulting."
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In spite of the booming industry, Green Flower faces a few unique challenges. "The challenges... are the unrelenting stigma [of marijuana]," Simon said. "We've had our bank account shut down, and we've struggled to find a merchant account. And we're a [tech and media] company that doesn't even touch the plant! While it's a challenge, we all see it as a tremendous opportunity."
Over time, he said, the cannabis tech market will actually get bigger and more exciting because the regulatory environment will relax. Where it's exceptionally easy for many cannabist startups to access cutting edge technology, ironically, "it's still hard for cannabis companies to get a bank or do paid advertising online, for god's sake. Once that changes, the industry will grow exponentially," Simon said.
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Dan Patterson has nothing to disclose. He does not hold investments in the technology companies he covers.
Dan is a Senior Writer for TechRepublic. He covers cybersecurity and the intersection of technology, politics and government.