Breathalyzers. Vaporizers. Delivery services. Real estate market exchanges. Safety and product review systems.
As marijuana laws undergo serious change in the U.S., new pot-related startups have sparked up all over the place. But what will separate the pretenders from the contenders in what’s becoming an extremely crowded space?
TechCrunch spoke with Privateer Holdings CEO Brendan Kennedy and Founders Fund Partner Geoff Lewis backstage at TechCrunch Disrupt NY about the potential for startups in the weed arena.
“Ultimately, we see the recreational product being somewhat close to a commodity,” Kennedy said. “So, we’ll certainly have different levels: Mass consumption brands, premier brands, connoisseur brands. It will probably be closest to something like micro-brewing, or the wine industry in California.”
Kennedy launched Seattle-based investment firm Privateer Holdings three years ago as a way to back marijuana-related startups. The organization has come a long way since 2012, most recently raising a $75 million Series B round that will help grow the firm’s portfolio further.
Founders Fund, the well-known Silicon Valley venture capital firm led by Peter Thiel, participated in that Series B round, marking the first time a major institutional player has placed capital in this industry.
“It’s a key event as this industry transitions from a state of prohibition to a state of legalization,” Kennedy told GeekWire in January.
As far the potential for delivery services, Lewis said that it depends on whether cannabis delivery will be a standalone vertical, or if a company like Postmates or Instacart lumps weed into its already-built infrastructure. He is also wary of the legal regulations around delivery which are already causing startups to shift their business models.
“The delivery space pushes it pretty far to the limit in terms of the regulatory legal stuff around it,” Lewis said during the backstage interview.
Lewis added that he thinks there are short-term opportunities for companies that provide point-of-sale solutions for dispensaries, but that longer term, a traditional enterprise software may ultimately offer the best option.
Kennedy and Lewis both agreed that companies developing vaporizers are in a “really competitive” space — however, there still may be room for new startups.
“When it comes to whole plant vaporizing, we’ve seen so many technologies over last few months that are emerging,” Kennedy said. “We know it’s going to happen, it’s just hard to figure out what company and which engineers are the right play. I think you’ll see a variety of different providers of of those products.”
See the full interview here, or watch the on-stage interview at TC Disrupt here.
