We don’t need to tell you that companies are investing in the cannabis industry. The topic has practically consumed all other cannabis-related news stories outside legalization efforts over the past few months. Stories like the rise and fall of various cannabis stocks, as well as companies like Coca-Cola and Pepsi Co. flirting with the cannabis industry, have dominated the news cycle.
So you may not be surprised to hear a new investment sector is circling the cannabis industry — Silicon Valley. A New York Times feature broke down why Silicon Valley has drawn a moral line in the sand against Juul and other nicotine companies, and it basically has to do with their advertising practices and a belief they target teenagers.
Some of those same investors, though, were open-minded about investing in start-ups focused on cannabis, which is now legal in California for recreational use. Many companies are positioning marijuana and CBD, a related compound that does not have psychoactive effect, as a wellness product for relaxation, anxiety relief, and even post-workout recovery. Cannabis start-ups have raised $1.1 billion in funding so far this year, nearly double last year’s total, according to CB Insights.
The Times cites Tusk Ventures investing in Eaze, the Uber-like start-up dedicated to cannabis deliveries. Another investor admitted he’s been evaluating CBD companies because he believes their product has clinical benefits.
Again, it isn’t that surprising that smart people want to invest in cannabis. Projections indicate the cannabis revenue will dramatically rise in the coming years. But it is interesting why they’re investing from these public statements. Silicon Valley wants to feel good in what it invests in. We guess cannabis seems like an obvious choice then.