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Cannabis, sex tech, and psychedelics are often lumped together under the “dealing” category — a trait that deters many VCs from investing in these spaces. But does that make sense? Let’s explore together. – Anna
That (no) is a sin
Isn’t cannabis really similar to coffee, wine, and spirits? That’s the argument Emily Paxhia made on Twitter Space hosted by TechCrunch+ earlier this week to discuss our latest survey of US cannabis investors.
An executive at the cannabis-focused hedge fund Poseidon Asset Management, Paxhia argues that cannabis-derived products have more to do with health than with the sort of “sin” they typically commit to. .
“Sin clause” and “side clause” are terms venture capitalists use to refer to their inability to invest in certain business categories, from porn and chess silver to alcohol and tobacco. When I discover fundraising strategy for sex tech startups I discovered earlier this year that this veto usually comes from limited partners of the fund, or LP.
It is understandable why investors are reluctant to put their money into certain types of businesses, let alone be known for doing so. But there is a fine line between a moral stance and a stigma.
Andrea Barrica told me: “I don’t identify with the word ‘vice’ at all. Barrica is the founder of O.School, which she describes as a sexual health communication platform. “Health” is a common term in both the sex tech and cannabis industries – because it makes them more palatable, sure, but also because it honestly reflects the impact entrepreneurs are hoping for. have been.
It should be noted that marijuana is not only highly recreational. In Europe, we hear from investors, it’s medical marijuana that has most of the momentum. It is this view of health benefits that drives many entrepreneurs, who deserve more than cheap jokes.
Similarly, diving into psychedelics has taught me that this is more than just drugs and fun. With investors sometimes entering the space after personal travels with depression or burnout, and the founders hope to be able to make a point of the global mental health crisis. bridge, jokes easily feel out of place.
Miss
The sub-clause only applies to certain types of investors, which is also problematic. The fund that is handling your pension may be able to channel its investment into cannabis, but many family offices cannot. This means that the profits from these potentially lucrative bets will be concentrated in the hands of the already rich.
Some fund managers are also investing as individuals, Paxhia said – and it is they who will get the edge. Meanwhile, subsidiaries are missing out on profits and the impact they could have, for arbitrary reasons. After all, what is legal is not always ethical, and vice versa.
The most obvious paradox is that the tobacco, nicotine and alcohol industries are actually keep a close eye on cannabis and whether consumption can change. Will the change be a net negative for society? Maybe not. For hallucinogens, there is research underway to use non-irritating derivatives for the treatment of opiate addiction. With overdose deaths related to fentanyl and methamphetamine Strong increase in the US, is this the deputy? I do not think so. You have?
