“Three months in the cannabis industry is like five years in any other industry.”
With these words, Troy Dayton kicked off the June meeting of the Arcview Group, a network of investors that specializes in the nascent legal cannabis market. The Arcview Group brought together hundreds of investor members to the mile-high city of Denver to hear pitches from 11 companies looking for investments. It’s kind of like the TV show "Shark Tank," but all on weed — or more accurately, about weed.
The explosive growth of the legal cannabis industry was most visibly on display in the venue chosen for the meeting by the Arcview Group. Held at the Denver Center for Performing Arts in a beautifully high-tech conference space, it was a huge step-up in class from the last meeting space just a few months ago in April, held in a faceless chain hotel 20 minutes outside of Boston.
The day-long meeting of the Arcview Group was followed by a two-day business summit put on by the National Cannabis Industry Association, headquartered in Denver, which makes sense given Colorado’s leadership in legalizing adult-use recreational marijuana. I flew out to Colorado’s capital city to attend both meetings and to get a better sense of how this new, quickly growing industry is handling its rapid entrance into the legal limelight.
Arcview Group CEO Troy Dayton delivers the opening keynote address to a packed room.
The Arcview Group: A lot of money looking for good business plans
During his opening keynote address, Dayton, CEO and co-founder of the Arcview Group, shared a couple of impressive numbers with his audience. In the last 16 months, more than $10 million in investments have been made within the Arcview network, which now has 250 accredited investor members (meaning they each have a net worth of more than $1 million or annual income of $200,000). Each Arcview Group member is expected to place at least $50,000 in investments with Arcview entrepreneurs.
In addition to all of the investment activity, more than $300,000 has been raised over that same time period from the Arcview stage for the activist organizations pushing marijuana reform in the 48 states where it is still illegal. Groups like Students for Sensible Drug Policy (Note: I founded the first chapter of SSDP way back in 1997), the Drug Policy Alliance, and the Marijuana Policy Project still have a lot of work to do, and the cannabis industry recognizes their role in helping to finance that work. The activist side of the legal cannabis coin was well-represented at the Arcview meeting, both on stage and in the display hall.
Grassp was an event sponsor working to attract new clients. The company has built a platform that allows medical marijuana patients to shop for different cannabis products and have them delivered to their door.
The media loves this story. There were a lot of reporters wandering the halls and corespondents using this lighting setup for their camera shots.
Arcview’s many sponsors.
Ebbu is a company working to create standardized cannabis products based around the mood the user is looking to achieve (giggles, mellow, energized, etc…). Ebbu’s CEO Dooma Wendschug shifted his attention away from video games, where he co-wrote and designed a few "Prince of Persia" titles as well as the well-regarded "Assassin’s Creed," and is seen here on the right.
The world of technology has not ignored the cannabis industry. These lights are used to grow marijuana.
The National Cannabis Industry Association was started in 2010 and has the mission “to promote the growth of a responsible and legitimate cannabis industry and work for a favorable social, economic, and legal environment for that industry in the United States.” Above, NCIA Director Aaron Smith (left) and Deputy Director Taylor West talk to the Arcview audience about some of their recent successes and why all cannabis businesses should become members of the industry organization.
If three months in the cannabis industry is equal to five years in any other industry, it's going to be really interesting to see how thing develop in the 12 months until the next Denver meeting. In the meantime, the Arcview Group will gather next in September in the windy city of Chicago where once again, entrepreneurs will pitch investors on their cannabis-themed businesses, each dreaming of making it big in this next great American industry.
Onwards to the NCIA Business Summit!
National Cannabis Industry Association: Turning cannabis legitimate
Right now marijuana is only legal in two states — Colorado and Washington state. It's probably a safe bet that the other 48 states will soon enough come around to the same side of the legalization question. Each new state that legalizes marijuana opens up new markets for cannabis businesses but also introduces a unique set of challenges and logistical hurdles that have to be met and overcome by anyone hoping to do business there. Events like the NCIA Business Summit are a great way for the industry to share best practices, get caught up on advances in technology and processes, and more tightly network. As fast-paced and quickly changing as the world of legal cannabis is, it's important for everyone involved to get together on a regular basis and just sync up as a community.
The schedule for the two days of conference were fairly standard; each day kicked off with a keynote address followed by a series of panel discussions and wrapped up with another keynote. Industry leaders like cannabis consultant Kris Krane, self-proclaimed ganja guru and professional cultivator Ed Rosenthal, and activist Rob Kampia were on hand to share their insight into the politics of legal cannabis, how to best market pot products, and the finer points of growing marijuana in a legal environment. It was an exciting two days.
Welcome to Colorado!
There were more than 1,000 people attending the two-day business summit, so the large convention hall at the Colorado Convention Center in downtown Denver was well-chosen.
More than 50 companies and organizations sponsored the first annual business summit. It's likely that most of these companies will eventually fall to the dustbin of business history, but it’s just as likely that at one or two will grow to be enormous household names as the cannabis industry moves beyond its current two-state situation.
The most remarkable thing about the NCIA business summit is how unremarkable it was. If you squinted, it looked just like any large glitzy conference — same breakout sessions, same conference displays, same keynotes. The same principle applied to Denver and Colorado at-large under legal cannabis. Everything was just the same as it was before Amendment 64, except people aren’t being put in jail for smoking pot. I think a lot of drug warriors are going to be upset at how boring legal pot actually is.
EZ Trim makes machinery that automates the otherwise labor-intensive process of trimming marijuana buds for retail sale.
The SPEX CertiPrep Group is a 60-year-old laboratory supply and equipment manufacturer that is marketing analysis products to the cannabis market. This is a smart move given the projected growth of the market and the accompanying rise of strain and product testing and analysis.
GfarmLabs is a cannabis producer. The company makes cannabis concentrate oils for vape pens, which are small battery-powered hand-held devices that heat the cannabis or cannabis product to a high enough temperature to vaporize the important parts of marijuana — the cannabinoids that deliver the effects — while staying below the temperature at which plant matter burns. They are basically e-cigarettes, but they get you high. Vaporizers are less harmful to use than traditional pipes or bowls where the user burns the marijuana, and they are especially valued within the medical marijuana community. Vape pens are how middle America is likely to consume cannabis in the future.
FunkSac makes cannabis packaging. The FunkSac promises to eliminate the odor of pot products while the company's FL3 lock satisfies the Colorado law requiring cannabis retailers to sell their products in childproof packaging.
Living legend Ed Rosenthal (sitting to the far right) anchored an interesting panel about the challenges of growing marijuana in a legal environment.
Not surprisingly, the panel discussions about cannabis policy and law were the most well-attended. People were watching from the hallway.
The most interesting takeaway that I brought home with me from Denver was the idea that there are a lot of challenges unique to the cannabis industry. Beyond the obvious ones like having to navigate in a system where roadblocks from prohibition still stymy newly legitimate entrepreneurs (good banking services are still hard to come by for most marijuana businesses), there are also the necessary paradigm shifts that comes from operating in a legal environment. Growing marijuana without the constraints previously imposed by prohibition is a completely different ball game than having to grow your crop either under the total cover of secrecy or even within guidelines mandating a cap on the total number of plants grown. When you can grow pot in a legal and open setting, it doesn't make sense to grow a small amount of plants for a long time to a large size. Rather, it might be better (i.e. a bigger harvest) to grow a large number of small plants for just a short amount of time. We're only one grow season into full legality and I got the sense that there is a lot more innovation left to be squeezed out of the marijuana grow cycle.
It's certainly a whole new world. For those of us who have been paying attention to the world of drug policy over the years, the recent changes have been swift and much welcomed, if a bit heady. I, for one, am glad that organizations like the Arcview Group and NCIA are out there leading the charge from the business community and helping to shape the future of legal cannabis. If we're going to win this war against the war on marijuana, it's going to take all hands on deck to finish the job.
Want to learn more about the legal cannabis market? Check out these stories here on MNN:
- Mark Passerini: How one cannabis advocate morphed into a marijuana dispensary owner
- Troy Dayton is on the forefront of the legal medical cannabis market
- Quiz: How much do you know about marijuana?