Through the end of October, venture capital firms have poured close to $2 billion into cannabis-industry startups, according to the data provider PitchBook. That's up from just $17 million in 2013, right after Colorado became the first state to open its doors to the commercial cannabis industry.
That number is bolstered by mega-rounds for companies like Pax Labs, which closed a $420 million funding round in April. Much of that money, however, has flowed into early-stage companies. For companies later in the growth cycle, there still isn't much capital available because THC, the psychoactive component of cannabis, is federally illegal, so many big funds are reluctant to invest.
Most institutional VCs still draw a hard line between cannabis-tech companies, like software platforms for dispensaries, and branded products that "touch the plant" — or sell and distribute THC — a number of venture investorsThat's because the cash in these funds often comes from pension funds, endowments, or sovereign wealth funds, who are unwilling to take risks on a brand-new industry in a muddy legal climate.
and then after sometime it will turn out to be more harmful than beneficial... just like e-cigarettes 😏
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