July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Weed is a big business.

Ghost Group, a venture capital firm located in Newport Beach, California, is raising a fund to provide people with an opportunity to invest in the growing (ha) marijuana industry. Ghost Group manages two funds. The latest is called Emerald Ocean Capital and will invest in companies and technology in the “legal cannabis and medical marijuana” sector.

The marijuana industry is in a state of transformation. Colorado and Washington legalized the drug for adult use, and 18 states have enacted laws to legalize medical marijuana. The Pew Research Center conducted a study in March that found that not only do 65 percent of millennials (people born since 1980) favor legalizing marijuana but that 50 percent of Baby Boomers (born between 1946-1964) and 54 percent of Generation X (born 1965-1980) also favor doing so.

“Similar to the end of prohibition, the marijuana industry is in a transformative era, and Ghost Group and its host of companies are well positioned to take advantage of the unrealized potential of this burgeoning sector,” said cofounder and partner Justin Hartfield.

Emerald Ocean Capital seeks to be a pioneer in “navigating the cannabis opportunity” by acquiring companies and forging ahead with businesses that, upon legalization, give it a first-to-market advantage. EOC will engage in lobbying efforts as well as fund the next wave of “professional pot entrepreneurs.” CNBC  estimated that the illegal marijuana market is $18 billion a year, and if legal, this market could skyrocket. However, since it is still illegal at the federal level, there are issues with banking as well as a lack of professionalism in the sector. It is not currently an industry loaded with operational talent. And “dogfooding” the product — aka using it — likely has an adverse effect on productivity.

Hartfield launched Weedmaps.com in July 2008 to help people find the best and nearest medical marijuana dispensaries. It now attracts 1,675,000 visitors per month and brings in $1.5 million of monthly revenue. Weedmaps owns marijuana.com, which will “sell more marijuana than anybody in the world” once it is legal to do so. Cannabinoid Science System is another portfolio company, which tests cannabis and does research on “terpenes extraction.” Other potential areas of investment are land banking, cosmetics and nutritional supplements, hemp industry, machines and equipment, weed tourism, venues and events, and cannabis-friendly restaurants and bars.

The perception and habits surrounding marijuana are shifting, and government — state and federal — is slowly beginning to reflect these changes. If startups were deterred by legal ambiguity and controversy, we wouldn’t have some of the great, disruptive companies that we have today. Policy changes are opening up massive opportunities in healthcare and businesses financing, and the same is possible for weed. The stakes — and the potential for returns — are sky high (sorry, I had to).

Ghost Group is not the only organization looking to capitalize on this sector. Seattle private-equity fund Privateer Holdings is also making moves by buying up smaller weed companies in anticipation of the day when having a massive weed conglomerate will pay off.

Photo credit: it was 3 a.m./Flickr

Mexican police have confiscated a homemade cannon that shoots cylinders of marijuana over a border fence and into California, the Associated Press reports.

The Mexicali, Mexico drug dealers did some innovative work to make the cannon function out of the bed of a truck. They used plastic pipe as a shaft and a crude metal tank for the base. Compressed air from the engine of a car created the pressure needed in the metal tank to shoot the cannon. (See a picture of the actual cannon here.)

This isn’t the first time such an incident has occurred. U.S. Border Patrol agents found similar canisters that were launched over the border into Arizona in December. More than 30 cans of marijuana were found at that time, and evidence suggested a “pneumatic-powered cannon” with a carbon-dioxide tank was used to launch them.

The cylinders, in this new case, were packed full of weed and weighed as much as 30 pounds. That means the improvised cannon had some impressive power.

All we can say is … that’s one groovy cannon, baby.

Weed cannon illustration by Sean Ludwig/VentureBeat

It’s rare for a publicly traded company to be concerned when its stock price gets a dramatic increase, but that’s exactly what happened to MedBox earlier this week.

MedBox produces marijuana vending machines used in hospitals, pharmacies, doctor’s offices, and “alternative medicine clinics,” which is code for medical marijuana dispensaries. The machines use a pre-registered biometric scan to identify authorized users, track and restrict drug usage, and deliver secure reports about those that use it. The company, which was awarded a U.S. patent on its “herb” dispensing machines, has generated over $8 million in revenue since launching in 2010.

And due in part to voters in Washington and Colorado legalizing marijuana for recreational use, MedBox’s stock has experienced quite a dramatic boost. The company’s shares went from $4 on Monday to $215 by the end of the week, which prompted MedBox execs to lower investor enthusiasm, reports Marketwatch.

Obviously, investing in a business that’s highly reliant on a substance that the federal government considers illegal — despite several state-level legalization measures and widespread usage from the general population — is risky. At the same time, it could be worth the risk to get in early at a company that already has its foot in the door for an extremely lucrative new industry.

MedBox represents a very legitimate business that’s focused on the health care and medical industry, and it wouldn’t be difficult to expand its target customers should marijuana finally become legal across the country.

And while most people are still debating whether or not state rights supersede federal law, my first question was “how long is it going to take for the tech industry to take hold of this brand new marijuana industry?” If MedBox’s stock is any indication, the answer is not long at all.  That said, I’m not just talking about marijuana social networks, either.

Dispensing and inventory monitoring machines are definitely one area where tech companies can shine, but there’s also plenty of room for innovation in agriculture tech as well. Of course, all of this is dependent on marijuana being legal, which would legitimize it for the business world.

Via BoingBoing

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

The user community of news-aggregation website Reddit is up in arms after site owner Condé Nast stated it would not run ads promoting California’s Proposition 19, which would legalize marijuana under certain restrictions.

Instead of using the online ad space to generate revenues, Condé Nast is now facing an army of “Redditors,” as the site’s active participants are known, placing what amounts to free advertising for Proposition 19 on the site’s homepage.

Eight of the top 25 posts on Reddit are now images that promote the proposition. The top overall post? “YES to Prop 19; NO to corporate censorship.“

The official statement by Condé Nast is that it “does not want to benefit financially from this particular issue.” As a compromise, Reddit staffers have reversed the ban and are running pro-Proposition 19 ads without charge.

Reddit operates as a news aggregator that allows users to “upvote and downvote” news stories, links and self-written posts, similar to Digg and others. The top-voted links make it to the front page, and users can do the same with comments written for each individual link.

Reddit was launched in 2005 after getting backed by Silicon Valley startup incubator Y Combinator. It was acquired by media supergiant Condé Nast in 2006.

[Photo: pvera]