The New West Summit at the Hyatt hotel in downtown San Francisco looked similar to other business conferences held there throughout the year. Men and women in business suits hurried around, people huddled in corners talking shop, and unembellished booths showed off varied graphs and charts.
But every once in a while, conference goers got hit with a strong waft of marijuana.
That’s because this summit was all about weed. At their booths, companies displayed glass urns filled with buds, cannabis-laced chocolate bars and different kinds of vape pens and bongs. Yet among the firms touting this typical pot paraphernalia, there were other kinds of businesses dealing in marijuana: tech startups.
“This plant has been illegal and underground since the invention of technology,” said Steve DeAngelo, founder and CEO of Harborside, one of the world’s largest medical cannabis dispensaries. “This conference represents the intersection of Bay Area startup culture and cannabis.”
Weed has become big business. Four states — Alaska, Washington, Oregon and Colorado — have legalized the recreational use of marijuana, and 25 states allow for medical use of the drug. That number is bound to grow too; this election season nine more states are set to vote on legalization. The industry is now worth $7.2 billion, according to New Frontier, a data-analysis group focused on marijuana, and it’s growing 29 percent per year. By 2020, New Frontier forecasts, the industry will be worth $20.5 billion (and some estimates put that figure a lot higher). That type of escalation makes the weed business one of the fasting-growing industries in the US.
It’s no wonder startups are getting into the game.
A meander around the New West Summit gives a sense of where the business side of the industry is heading. There’s Grownetics, for instance, which uses a machine-learning algorithm to help farmers grow bigger buds more sustainably. There’s Fleurish Farms, which has invented a contraption that it says captures 99.7 percent of the sun spectrum to let people grow pot plants indoors at a higher efficiency than they could in a greenhouse.
“It captures the sunlight from all angles,” said Fleurish Farms CEO Jonathan Cachat. “This reduces the environmental imprint of indoor cannabis production.”
Even edible marijuana is seeing innovation. Besides gummies, lozenges and chocolates, some companies showed off marijuana-infused dissolvable breath strips, while others had topical sprays with exact dosing per pump.
“We’re coming to a point where we’re starting to see edibles that are lower dosed,” said Kristi Knoblich, co-founder of Kiva Confections. “It’s that person that’s looking for a glass of wine in the evening, that person that isn’t looking to get blasted.”
As the weed industry becomes more professionalized, it’s caught the eye of more investors. In 2015, investors dropped $360 million into marijuana-focused startups, and so far this year they’ve invested $137 million, according to PitchBook, a research firm specializing in venture capital. That’s a lot compared with just four years ago; in 2012 investors put only $7 million toward funding weed companies.
Jim McAlpine, the New West Summit’s founder, said the conference is more about technology and business than getting high. The event is meant to be a forum where the future of the industry is discussed, he said.
“This industry is really looking at how it’s going to grow and scale,” McAlpine said. “Last year it felt like a cannabis technology event. This year it feels like Salesforce’s Dreamforce conference.”
Put that in your pipe and smoke it.