Colorado’s legal recreational marijuana industry received a massive cash infusion this week. Investors from the ArcView Group committed more than $1 million to 22 marijuana startups seeking capital at a meeting in Denver.
The ArcView Investor Network, comprised of about 80 investors from the United States and abroad, committed $1 million to pot industry startups at a Seattle event last May. Investors would have invested even more than they did in Denver were it not for Colorado’s residency laws, which require interested parties to be state residents for three years before investing in canna-businesses. According to ArcView president Steve DeAngelo, more than 90 percent of investors at the Denver meeting were from out of state.
When Colorado and Washington legalized recreational pot in 2012, national attention turned to the burgeoning retail industry as the next big thing in the venture capital world. And since Attorney General Eric Holder made the announcement that the Department of Justice will not interfere with recreational marijuana laws in states that make pot legal, economic interest is at an all-time high. However, even though the federal government has said it will stay out of state-legal pot industries, marijuana is still illegal under federal law. Pot retail businesses face difficulties with the IRS, payroll companies and even when opening bank accounts.
No matter what obstacles pot retailers face, it’s obvious from the ArcView Group’s pledges to marijuana businesses that the cash flow will continue to grow, and that the “next great American industry,” as ArcView CEO Troy Dayton termed it in his opening statement at the Denver meeting, has arrived.