The cannabis industry is booming, and Poseidon Asset Management is positioned perfectly to take advantage of it.
A recent article on MotherJones.com focused in on the San Francisco ArcView Investor Meeting and the rush of start ups in attendance seeking capital. The scene is set thus:
"Sitting atop San Francisco's Nob Hill last week, in a banquet room of the opulent Fairmont Hotel, I began thinking maybe I ought to invest in marijuana. 'You really should,' said a woman at my table, who reminded me, in her wholesome, middle-aged earnestness, of my mom. About a year ago she poured money into Poseidon Asset Management, a marijuana hedge fund that requires a minimum investment of $100,000. The fund earned a 67 percent return in 2014, besting the S&P 500 by a factor of six. Now she's trying to figure out what to do with all of her extra cash."
After explaining how ArcView has acted as a sort of Y-Combinator for the start-ups pitching, guiding and mentoring young companies in best presenting themselves, the writer tells of the caliber of the current cannabis investor base. In January, Peter Thiel's Founder's Fund, best known for early backing Facebook and AirBnB, invested $75 million in the space. And they are not alone. Eyes from around the world are looking at the cannabis industry very closely, and very carefully placing their bets.
The writer wisely divides the start-ups into two broad categories: those who touch the plant, and those who do not.
"Start-ups that offer ancillary services to growers—the so-called 'shovels and pickaxes'—will soon be attractive buyout targets for bigger companies. Those that actually grow and sell marijuana, on the other hand, are income-generation plays."
Perhaps it's the dress code at the event itself that best reflects the industry's unusual space in the business world.
"I was seeing far more suits," he writes, "than I'd seen at the fanciest of San Francisco tech conferences. It struck me as odd until I realized that in the world of pot, the suit is the new tie-dye. It's subversive and countercultural in a way that a suit anywhere else simply isn't."
Great article on the state of the industry and how the event last week truly sums up where we are now: new, excited, green, and growing.