(FT Magazine) Cannabis: Silicon Valley’s hot new sector

The Silicon Valley version of that “green rush” looks a little different. It involves slick apps, software and founders who talk about big data and algorithms. AngelList, a website where micro start-ups can look for angel investors, lists more than 300 marijuana start-ups in the US ”” half were founded this year, and a third of those are in California. (Examples include an Amazon for cannabis, a Kickstarter for cannabis, inventory management software and dozens of delivery companies.) Investments in marijuana-related companies have reached $200m over the past 12 months, quadruple the levels of the previous year, according to CB Insights, a venture capital database.

This rush of funding has attracted software engineers such as Austin Heap, a veteran of some half-dozen start-ups. Heap didn’t initially know much about the marijuana industry, other than being a medical marijuana consumer himself. He and a friend (now co-founder) started batting ideas about last autumn and came up with Potbox, a monthly subscription delivery service for organic, farm-to-table cannabis. They met their other co-founder, a 20-year veteran of the industry, because they had been using his marijuana delivery service.

“It feels like a very normal start-up, it just happens to be cannabis,” Heap told me, the day before their launch on July 8. Later that night, he would put the final touches on their social media accounts and website. “Hopefully at about 2:30 in the morning I will be a) still awake and b) getting Cloudflare in place, which will help us deal with any huge spikes in traffic,” he explained with a geeky enthusiasm. “I’m largely tech focused.” Heap says the huge investor interest in cannabis is “refreshing” after years of doing the venture capital dog-and-pony show. “No start-up I’ve worked on has said no to so many investment requests. I think we have something the cannabis industry has never seen.”

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