CANNAINVESTOR Magazine U.S. Privately Held Companies November 2017 | Page 147

Although the opportunity to invest on the ground floor of an industry poised for decades of incremental growth is very rare, the cannabis industry offers investors this opportunity.

Investors have already profited millions upon millions from cannabis investments and the game has not even started. The United States cannabis industry is already a multi-billion-dollar industry and is not even in the first inning of what will be a multi-decade growth cycle.

Funds Become Friendlier to Cannabis Investments

Over 150 years ago the market saw a similar opportunity during the gold rush. This period created enormous wealth and many people became millionaires.

Although mining for gold was the sexiest opportunity, most did not make their fortunes mining for gold. The real winners were people such as Samuel Brannan and Levi Strauss, who sold the ancillary products to the gold miners (i.e. picks, shovels, clothing, etc.).

This opportunity has been recognized and the tides are turning in Silicon Valley. Over the last few years, we have seen several prominent venture capital firms plant their flag in the cannabis industry. These firms clearly remember the gold rush because they have invested in several ancillary technology businesses.

The Next Trillion Dollar Industry

Today, there is a similar trend in the cannabis industry where many ancillary businesses seek to capitalize on the green rush. The cannabis industry is not even in the first inning of a multi-decade growth cycle that will create a trillion-dollar industry (marijuana and hemp).

In 2014, 59 cannabis companies raised a combined $104.5 million. This number increased significantly in 2015 and the year was highlighted by Privateer Holdings’ $75 million Series B raise which included Peter Thiel (Founders Fund)

2016 was an even bigger year for the cannabis industry. During this time, cannabis startup Eaze completed a $13 million funding round that included two prominent firms, DCM Ventures and Tusk Ventures.

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