On the high holiday yesterday—4/20, that is—my friend and PR client Jason Hairston, the young entrepreneur behind the übersuccessful Nugget Spot in New York City, happily shared an article on Facebook. It was a Thrillist roundup of the city’s top 32 places to cure the holiday munchies.
Turns out Hairston—whose deep-fried nuggets of chicken, fish, pork, polenta and cheese appeal to plenty of sober adults, too—has a lot of company in making high-end stoner food. The list includes single-focus restaurants specializing in biscuits, pudding, bacon, cheese fries and burgers with doughnuts for buns. While many of them are in bar-heavy neighborhoods, their target demographic might very well have a different drug of choice.
They’re just one segment of the growing marijuana industrial complex. Everyone is putting a huge emphasis on how to monetize weed. Now that recreational marijuana is legal in two states, medical marijuana in 18 more and D.C., and many other states (including New York, where law enforcement has long largely looked away) looking at legalizing one or both, businesses of all stripes and sizes are trying to get in on the action.
As Robert Frichtel, president and CEO of Advanced Cannabis Solutions, a Colorado Springs, Colo., company that leases spaces for growing marijuana, told Bloomberg Businessweekin January, “Everybody is running toward this as the
And that doesn’t even count all of Hairston’s nuggets.
When you consider the countless peripheral businesses that stand to benefit from the growing acceptance of the drug—watchers predicted the return of classified advertising and new growth for Colorado’s alt-weeklies, head shops have seen business boom, garden shops found new markets and junk-food sales quite likely went up—it’s clear that the marijuana business has an overall valuation much higher than $2.34 billion.
There are the little guys, like Colorado blogger Nathan Hammond, who announced in a pre-legalization post that his new blog was an effort at “Monetizing The Marijuana Industry Without Having To Sell The Stuff!” and raised amusing questions about marijuana SEO (“What do stoners punch into
But this isn’t just a big joke. The media is taking notice. Not long ago, at a panel discussion at the Society of American Business Editors and Writers’ spring conference, Al Olson, a senior editor at NBC, said he has been embarrassed by a lot of the media’s coverage of the marijuana industry. “It’s time to drop the Cheech and Chong jokes; it’s time to drop the reefer madness,” he said. “It’s time to cover this like a real business.”
At the same conference, Brendan Kennedy, CEO of Privateer Holdings, a private equity firm that invests in the legal marijuana industry, said 81 percent of Americans believe medical cannabis should be legal if a doctor prescribes it. He added: “As a crop, it’s bigger than corn, it’s bigger than soybeans, it’s almost as big as corn and soybeans together.”
Privateer itself is certainly no joke. The firm is set to raise more than $50 million in its latest round of fundraising, by the end of next month, which will more than double the $22 million Privateer has raised to date. New investments include some from several institutional investors who had previously avoided the industry, and the pace has even surprised Kennedy, according to an article in the online newspaper Marijuana Business Daily (itself a business that’s built on monetizing the drug). Privateer has invested its current funds in companies ranging from crop producers to processing and shipping companies to a strain-review website.
At the same time, publicly traded cannabis companies that had shied away from actual marijuana before (think hemp-based products and growing equipment) are starting to get more directly into the medical marijuana market, according to another Marijuana Business Daily article. That’s both because of growing public acceptance of the drug and because of a shift in regulations and laws surrounding it, and a perception of less risk.
“Based on my conversations with companies that are public and private, it’s likely that we’re going to see licensing models emerge, whereby proprietary strains, extraction processes or edible brands are put into public company vehicles,” the article quoted Alan Brochstein, a Chartered Financial Analyst who runs a cannabis-focused stock website for investors. “We are headed in this direction because investors want it that badly.”
In the meantime, restaurateurs can happily promote their high-end junk food and their 4/20 specials. Bloggers and reviewers can sell advertising to new marijuana businesses. It gives a whole new meaning to green marketing.