‘Alternative’ Investments: Marijuana and Climate Change

By John Kimelman | June 9, 2015

An employee pulls marijuana out of a canister for a customer at the LoDo Wellness Center in Denver. Photo: Matthew Staver/Bloomberg

Most investors can do just fine by buying a fund pegged to the S&P 500 or focusing on a list of 10 stocks with solid dividends.

But that would be so square, man.

Indeed, most investment stories churned out each day are the kind your parents’ generation could easily relate to. But sprinkled in amidst the conventional fare are occasional stories that play on themes that might have once seemed suited only for the counterculture.

In recent months, for example, there have been a spate of stories that discuss and handicap the dozens of marijuana stocks that have come to market, most of which play on the growing legal acceptance of medical marijuana. Indeed, this market now has its own benchmark, the Viridian Cannabis Stock Index, a collection of 75 publicly-traded pot plays.

Much has happened to this market since Barron’s featured a cover story two years ago poising the basic question, “Should Pot Be Legal?”

A fresh piece this week looks at a brand new phase of the marijuana industry, focusing on a broad infrastructure of related services, particularly in the area of financing.

“First comes the product itself, second come ancillary products, and third comes the infrastructure of related services,” writes Fortune’s Jennifer Alsever. “By that measure, the legal cannabis business is rapidly accelerating into stage three, as an ecosystem of financial and other services quickly grows up.”

It’s not surprising given that sales of legal marijuana soared to $2.7 billion last year from $1.5 billion the year prior, according to the ArcView Group, an investment and research firm focused on cannabis. According to the Fortune article, ArcView’s 470 member investors have poured some $41 million into 54 weed companies of late. “Recipients include Eaze, which aims to be the Uber of pot delivery (it got $11.5 million), and Medicine Man, a Denver dispensary that nabbed $1.6 million,” Alsever writes.

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