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Business

Budding business: Americans drawn to weed’s market potential

Revenues from the U.S. marijuana industry are expected to mushroom from $6.7 billion in 2016 to over $21 billion by 2021, according to Arcview Group research. Troy Dayton, CEO of Arcview Group, works with hundreds of high-net-worth investors who have poured more than $100 million into cannabis-related startups since 2010. Dayton predicts that explosive growth will happen, whether or not President Trump cracks down on legalized marijuana.

[A crackdown] may impact valuations of some companies, and it may affect who invests in those companies, but states will continue to give out licenses, and there will be a line of people outside those facilities looking to purchase [the product].

Troy Dayton

Next year is expected to be a particularly big year for the weed business because at least eight of the 11 states that passed medical or recreational cannabis laws in 2016 will begin allowing dispensaries to sell it. So, in 2018, one in five Americans will live in an area where it’s legal to get high. And it seems people are embracing weed’s marketability. Not so surprisingly though, an exclusive Yahoo News/Marist Poll found that there is a “generational divide” when it comes to people’s attitudes about investing in the cannabis sector. Still, Dayton says that he sees a softening of this generation gap in his own business with “father-son, daughter-mother type match-ups.” While most large, mainstream banks still don’t do business with cannabis companies, due to the fact that the drug is federally illegal in the U.S., they do recognize that their clients are interested in exploring weed as a viable investment. In the meantime, many large companies are choosing to wager on the marijuana boom from afar. They are investing in ancillary industries, such as agriculture or consumption paraphernalia.

We have to end federal prohibition of marijuana. [Once that happens, bank resources and venture capital funds will flood the market.]

Troy Dayton