The legalisation of marijuana in parts of the United States is creating big business opportunities.
There has been an explosion in the number of companies taking advantage of changes in the law, allowing the sale of medical marijuana to relieved pain, but also for recreational use in Colorado and Washington state.
The law is complicated, with a ban still in force under US federal legislation, but money is flooding in to new business ventures – both growing and retailing.
Chris Walsh, the editor of Marijuana Business Daily, told euronews: “There’s at least 100 million new fresh dollars that are being pumped into angel investing and private equity funds in just the past couple of months. So we really see this trend continuing and growing. The barriers are coming down everwhere to investing in this industry. The US government several years ago was conducting raids on medical marijuana businesses and shutting down those businesses and putting owners in jail. That hasn’t happened at all this year.”
Private equity firms are raising millions, focusing initially on the medical marijuana market in the US.
That is worth $2.5 billion dollars this year, growing to $9 billion in two years according to estimates by cannabis industry tracking and investment site ArcView.
But it is also a case of investor beware: in the US Financial Industry Regulatory Authority and the Securities and Exchange Commission have both warned about medical marijuana company shares.
Marijuana Business Daily editor Chris Walsh pointed out they are mostly traded on the over-the-counter market that is lightly regulated and sometimes involve people with questionable backgrounds.
Listen to Euronews reporter Paul Woodley’s full interview with Chris Walsh on the boom in the industry and possible dangers for investors