The elegant Washington Athletic Club (WAC) will host some unlikely guests Monday: pioneering pot entrepreneurs pitching their products to an angel-investor network, the ArcView Group, based in San Francisco.
Josh Gordon, 26, is coming from New York to seek up to $500,000 for his packaging company, RODAWG. Aiming for more-discriminating consumers, Gordon’s containers for joints shun old symbols such as pot leaves; they’re more like accouterments for fine cigars. His investor presentation projects at least 35 percent yearly growth and annual revenue of $3.7 million in five years.
Chris Walker, 40, will be pitching for a Swedish company that makes cutting-edge lights for cultivating plants. Walker says Heliospectra’s biofeedback technology leads to healthier, higher-yielding cannabis plants, while conserving energy. He’s looking for $2 million from investors.
Later Monday, Seattle Mayor Mike McGinn will greet and take questions from another group at the WAC, the National Cannabis Industry Association, based in Washington, D.C. “He’s going because, just like with any other trade organization, these professionals are interested in learning more about the legal and regulatory lay of the land,” said Aaron Pickus, the mayor’s spokesman.
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“The world changed 10 weeks ago,” said ArcView CEO Troy Dayton, referring to when Colorado and Washington voters approved legal marijuana for adults. Merchants who dealt in the underground are meeting on Main Street. Investors who had sunk money in software are now eyeing weed-related ventures and what might be the start of a multibillion-dollar industry.
“Seattle along with Denver has become Ground Zero for an emerging industry,” Dayton said. “So it’s only fitting we hold our quarterly investors’ meeting at Ground Zero.”
But marijuana hasn’t gone totally legit yet. The federal government’s ban on all marijuana remains in place, and the threat of a crackdown has kept investors out of the leaves-and-buds business until the clash between state and federal laws is resolved in a way that inspires more confidence.
Until then, ArcView is investing only in ancillary products and services. Besides the risk of a federal crackdown, Dayton sees compelling reasons for investing in ancillary products and services, and not touching the weed itself.
The cultivation business is already well-capitalized by friends and family of producers, he said. And, there’s a better chance an ancillary business will be acquired one day by a bigger company, which is where a really big payout might come for investors.
Dayton, who worked in Silicon Valley, hopes to foster what he sees as a natural connection between technology investors and the marijuana business.
“Some of the best ideas come up through the counterculture,” he said. “If you look at the beginning of the personal-computing revolution, and renewable energy and organic foods, they all look similar.”
It’s no accident that leaders in the emerging industry are meeting at the WAC, said Betty Aldworth, deputy director of the National Cannabis Industry Association, the only pot-trade group lobbying at the federal level.
“That’s one of the places you do business in Seattle,” Aldworth said. “These are responsible people, and they expect a professional environment in which to conduct their business.”
Gordon, of RODAWG, is hoping to expand his business with a clothing line aimed more at the “discerning socialite” than the scruffy stoner. Free of tie-dye and pot leaves, he said he’s aiming for a cross of Marlboro Man and Tommy Hilfiger. The models on his website look more like Brooklyn hipsters than Woodstock hippies. He believes apparel could double his projected revenues.
Dayton said he expects roadblocks ahead for pioneering entrepreneurs as they try to mainstream marijuana.
“This is a two-steps-forward, one-step-back process,” he said. “No one getting involved thinks the future is going to be smooth sailing.”
Bob Young: 206-464-2174 or firstname.lastname@example.org