Not so long ago, pot smokers had a dubious reputation in the popular imagination. Stoners seemed more likely to pick up the phone to order a late-night pizza delivery than to adjust their stock portfolios. Now, both the image and industry of pot are cleaning up, and investment opportunities abound.
Suddenly, a previously shadowy and disreputable business has Silicon Valley startups fighting for an ounce of the action.
Why? Two words: medication and legalization.
The potential benefits of medical marijuana across a wide range of conditions, from joint pain to seizures, is now virtually undisputed. Sales of medical marijuana across the United States reached $1.5 billion in 2013, up 15 percent from the previous year. That kind of growth is too strong to ignore, and is hardly surprising when the vast majority of Americans agree that pot for medicinal purposes should be legal.
A recent Gallup poll showed 58 percent of Americans support legalizing cannabis for adult use, up from just 12 percent a few decades back. The real tipping point, though, was when the states of Washington and Colorado legalized the sale of recreational marijuana to adults.
Colorado, dubbed the “Silicon Valley of pot,” has added thousands of jobs since legalization. Revenue in the first three months leapt from $14 million to $19 million, and shows no sign of falling.
Those sorts of numbers have caught the attention of tech entrepreneurs in California and beyond, all of whom see a nascent industry in the early stages of stratospheric growth, ripe for disruption.
“We’ve seen this quantum leap from small-scale production to what will now be macro-production, and technology really has to be at the forefront of that process,” says Tae Darnell, VP at Surna, a company committed to providing the legal marijuana industry with cutting-edge equipment.
Surna is led by Tom Bollich, co-founder of Zynga and one of the first tech entrepreneurs to spot pot’s potential.
“Tom is here to merge tech ideas with the indoor agriculture industry,” says Darnell. “He’s a coder, and we’re developing technology that will allow growers to monitor their crops from anywhere in the world, the same way alarm systems monitor houses. You’ll be able to check on yield, irrigation levels, all from a smartphone. The opportunity here is great.”
With many more states predicted to legalize marijuana in the next few years, professionals and investors from all kinds of backgrounds are migrating toward pot faster than Gold Rush prospectors headed for the hills. Whether they’re designing sleek new vaporizers, developing apps that help users locate their nearest legal dealer, operating vast indoor farms, or promoting Water-Chilled Climate Control, these so-called “ganjapreneurs” are determined to get established in the industry now. And they’re ready for revenue to go through the roof.
So, can they deliver? In Surna’s case, Tae Darnell is confident.
“Our cooling systems are outfitted for operations of all sizes, from 20 to well over 200,000 square feet, something that no one else is offering right now. Our systems have a heat absorption rate 20 times faster than normal, and four times more heat capacity than air, giving our cooling products 30 percent more efficiency than other systems.”
“The goal is to learn more about the plant and its function within the human body,” Darnell says. “Companies like Surna have the responsibility to allow growers to grow consistent crops so that consumers, retail product manufacturers, and medical professionals receive a product they trust.” And, he adds: “Branding requires consistency of quality and potency.”
In other words, as the worlds of marijuana and tech merge, both sides stand to benefit. Tech entrepreneurs may never have set foot in a greenhouse or tended to a budding plant, but their innovative thinking and expertise can bring new opportunities to growers, distributors, and retailers still reliant on outdated, inefficient methods.
There are still complications, however. Marijuana remains illegal in federal terms, and many businesses that handle marijuana directly are still unable to open bank accounts. The risks of entering such a volatile, uncertain, and tightly regulated industry are not for the faint-hearted. But as attitudes toward pot continue to relax among citizens and lawmakers alike, believers are adamant that it won’t be long before pot is sold alongside liquor and cigarettes in stores across the country.
“We are seeing this evolve as a social issue that people want to address with a responsibly regulated and taxed infrastructure,” says Surna’s Darnell. “There is no doubt that the international and domestic markets are exploding. The focus must be on bringing the plant and its cultivation into the 21st century.”
Tech entrepreneurs want to take pot somewhere it’s never been, and they have the skills and resources to do just that. No smoke without fire, the poet once said, and right now this industry is red hot.
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