Genifer Murray's path to the pot industry was an unlikely one. After graduating with a degree in microbiology, she spent two less-than-fulfilling decades working in corporate sales. But three years ago, a random conversation in a bar about medical marijuana testing awakened her inner scientist.
"It's literally a napkin story," Murray says. She spent the weekend brushing up on Colorado's cannabis laws and researching potency-testing methods and equipment. Come Monday, she was making plans to open CannLabs, the medical marijuana testing lab she now runs in Denver.
Today CannLabs operates in a 1,000-squarefoot space, serving many of Colorado's leading dispensaries and manufacturers of THC-infused beverages, tinctures and baked goods. The company's growth is steady, with sales on track to double in 2013. Plans for a second lab are in the works. "I took every penny I had and put it in this," Murray says. "It really has given me purpose in my life."
Cannlabs' Genifer Murray
Brendan Kennedy came to the cannabis industry at the same time as Murray, but from the other end of the startup spectrum: Silicon Valley banking. When a venture capital pitch from a potential client in the medical cannabis world sparked his interest, he began meeting with hundreds of pot activists and entrepreneurs. In 2011, Kennedy and pals Michael Blue and Christian Groh formed Privateer Holdings, a Seattle-based private equity firm for the legal marijuana sector that has raised $5 million (out of a goal of $7 million) from more than 20 investors. That December, Privateer made its first acquisition: Leafly, a website where users of medical cannabis can find product reviews and ratings by strain and effects and dispensaries by location.
Leafly didn't have a whiff of revenue when Privateer acquired it. Now, Kennedy says, "we're signing up four to six new clients a day," and traffic is growing by 20 percent per month. In December alone, the site had 2 million visitors, and Leafly's mobile app had 50,000 downloads. The company's projected sales for 2013 are $3 million to $4 million.
Welcome to the green rush. Independent financial news and data firm See Change Stratgeegy estimates that the U.S. medical marijuana market is worth $1.7 billion and could reach $8.9 billion by 2016. That's not just dispensaries, growers and producers of edible marijuana, but also the testing labs, equipment suppliers, security companies, insurance firms, attorneys, accountants and other consultants that serve them.
"This is the next great American industry," says Troy Dayton, CEO of San Francisco-based The ArcView Group, which runs an angel investor network for the ancillary cannabis industry. "Marijuana prohibition is a house of cards, and the first two cards have just been pulled."
- Small Businesses
- medical marijuana
- Brendan Kennedy