It was an announcement that took no one by surprise: Rapper and reality television star Snoop Dogg would be raising $25 million in venture capital to invest in tech innovations blooming in the legal marijuana market.
The celebrity investor has become a tech fixture—from Ashton Kutcher (Airbnb, Uber) to Justin Bieber (Spotify)—even in an era where founders themselves become celebrities. But Snoop is a special case: He’s been a commanding figure in weed culture for more than two decades, and appears to have an intimate knowledge of the market at hand. He also has other tech investments already in his portfolio, including a stake in Reddit, and support for angel investor Ron Conway.
The CEO of one weed-focused venture capital firm the ArcView Group calls it “the fastest growing industry in America.” The national market is currently estimated at around $2.7 billion, with some entrepreneurs and investors betting it will grow 100-fold. But marijuana’s federal illegality has largely left the medicinal and recreational business up to those willing to deal in an all-cash gray market.
The technology of the industry—the better means to grow it, smoke it, chemically test and analyze it—operates on a more legitimized plane. Still in its infancy, it’s a field more ripe for innovation than for disruption. There aren’t just special vaporizers and grow lights, but cloud software, data tools, specialized inventory tracking systems, and consumer services and testing kits. ArcView says it has raised $20 million from more than 400 investors for weed businesses since launching five years ago, and other marijuana-specific venture capital firms such as Ghost Group have also joined the mix.
Since Washington and Colorado passed recreational legalization laws, growers and dispensaries have been hitting it big. But there’s still potentially billions on the table.
Tech is primed to profit big as the weed market grows. About half the business is already in California. It's also an issue ripe for strategic lobbying. In the past, California has voted down marijuana legalization, in no small part due to the efforts of a strong contingent of growers in the state looking to keep control over what’s long been a strong and rarefied local business. But the Emerald Triangle would be no match for Silicon Valley’s venture capital, political connections, and sheer lobbying power. Even Google is rumored to be planning investments in marijuana technology.
The coder’s ambition is more likely fueled by nootropics and Adderall than a dank indica. But tech culture is wealth culture, and the money’s in the green.
If Snoop’s ambitions really are greater than being a mascot to tech moguls, he’ll have to raise that first round fast, and hopefully do better than $25 million.