Recreational marijuana use by adults became legal last November when voters approved Proposition 64—with retail sales reported to begin in early 2018—and medical use has been legal for two decades.
Canopy San Diego managing director Jack Scatizzi says the Sorrento Valley–based accelerator isn’t interested in companies like growers or sellers that directly “touch the plant.” He says the real money is in this new crop of businesses offering tech services to cultivators, dispensaries, and patients.
“Our goal is to help build the technology infrastructure to the scale of market demands and at the rate at which it’s being legalized,” says Scatizzi, who was once head analyst of the San Diego investors network Tech Coast Angels.
Canopy San Diego is nurturing a portfolio of 16 cannabis-adjacent businesses with an infusion of cash, boot-camp-style mentorship, and perks like office space. In exchange for $20,000 in seed capital, Canopy San Diego takes an equity position of between 6 and 9.5 percent in each company. Those who wow investors could receive up to $50,000 more after completing a 16-week business development program.
Canopy San Diego’s first cohort included LooseLeaf Tech, which is developing a mobile platform for patients with chronic conditions like epilepsy, cancer, and multiple sclerosis. Patients will use the app to track their cannabis usage to find their best treatment protocol, says CEO Daniel Hopson. Having previously worked in real estate financing as a vice president for Wells Fargo, Hopson couldn’t ignore the metrics: the medical marijuana segment is a high-risk industry with the potential for huge returns for investors and customers alike.
“Once I figured out that patients were being left behind to serve the recreational user, I decided to fully embrace it,” Hopson says. “Medical developments are going to be the foundation of the cannabis industry and will give it credibility.”
Direct Cannabis Network CEO Adelia Carrillo is another graduate of Canopy San Diego. She made the jump from consumer electronics and launched her digital news platform for the cannabis industry—she likens it to CNET—after using cannabis as a treatment for postsurgical pain.
“Coming from the corporate world, I think we’re able to have that professionalism that’s missing in this industry. We have a real opportunity if we’re able to stay ancillary and tech-focused,” she says.
Other Canopy San Diego portfolio companies doing early work in the field include Traffic Roots, which hopes to help cannabis brands amass online impressions through digital display advertising; EventHi, which plans to offer users an online tool for finding and reserving tickets to cannabis-friendly events like conferences and yoga sessions; and Urban Labs, which is building a scalable “lab in a box” for cannabis testing.
Scatizzi says large corporations have so far avoided the cannabis industry because of federal legislation. He predicts that as cannabis becomes more widely accepted for medical and recreational use, early entrants in the field will be ripe for the picking.
Link – San Diego Magazine
