Californians will decide this November if recreational use of marijuana should be legalized alongside medicinal use.
In Florida, voters are getting a second chance to legalize medical marijuana.
So far, 25 states and the District of Columbia allow some form of marijuana use for medicinal or recreational purposes and the trend is almost sure to grow. Entrepreneurs who are involved in the industry are hoping the growing number of people who have legal access to the weed will mean investors’ interests also will grow.
“This is a big year—a pivotal year for marijuana use, where we may have half of the population with some form of legal marijuana use,” says Derek Peterson, CEO of Terra Tech, a publicly traded company in Irvine, Calif.
Terra Tech is vertically integrated, meaning it handles marijuana from seed to sale. Peterson already has a successful food and vegetable producing business, known as Edible Garden, and he is a former portfolio manager on Wall Street.
He acknowledges that transparency and the ability to thoroughly audit public marijuana companies can be difficult for the investor.
“An investor puts risk capital into the marijuana industry. You don’t invest anything you cannot afford to lose,” he says.
However, the industry also is recession proof, according to those who are part of it. Between being medicinally necessary and recreationally desirable, the industry is less at the mercy of economic downturns than many other industries.
Brett Roper, chief operating officer for Medicine Man Technologies in Nevada, a marijuana industry consultant, agrees investor have to do their research. “Be cautious and look for business owners who have experience. Like any investment, investors need to do their research.
“But there is an air of exuberance around the business right now,” Roper adds. “This is no fluke or flash in the pan. This is a new industry that is maturing.”