US marijuana dispensaries turn to venture capitalists for seed funding
In the past couple of months, Rosh Kirsh has sold over 500,000 childproof bags to Colorado-based recreational and medical marijuana dispensaries. His company, Stink Sack, has achieved the sales through the financial backing of the ArcView Investor Network, according to Las Vegas Review Journal.
ArcView is a growing group comprised of venture capitalists who have flocked in town to attend this week's National Cannabis Industry Association conference. From 25 members last year, the group now has 125 member today. Kirsh will be among the dozens of entrepreneurs who will pitch their latest inventions to over 100 investors in the said conference, the report explained.
Andy Williams of Medicine Man Denver secured a $1-million loan from ArcView in 2013. A former industrial engineer, Williams built a marijuana facility adjacent to the Denver International Airport. With the backing from the group, he plans to construct another one.
Because of the illegal status of marijuana in the eyes of the US government, banks that are insured by the FDIC do not provide traditional loans to marijuana startups that are readily provided for other startups, the report said.
Each ArcView investor must put in a minimum of $50,000 and pay a yearly membership fee that ranges from $3,500 to $5,000. These investors loan the money to the founders of marijuana-related startups and monitor the activity in the bottom lines. Since the legalization of marijuana in Colorado late last year, the drug's price has surged from $2,500 to $6,000 per pound, Las Vegas Review Journal reported.
Williams said: "And like Costco, I'm never going to run out of merchandise, and I'm going to offer it at a reasonable price. Nevada is next up. You just watch and see. It's only a matter of time before it legalizes marijuana on a recreational basis."