Marijuana Stocks of the Future: An Introduction to the Five Biggest Cannabis Tech Startups
While prohibition is still in effect in parts of The U.S., cannabis as an industry is here to stay. Most of the public marijuana stocks consist of pharmaceutical or medical tech corporations who are developing drugs (often pills) based off THC and CBD, the two most prevalent chemical components of marijuana. On the other end of the spectrum, these five companies, not yet public, are taking the medical and recreational world by storm with products like thoroughly modern vaporizers, high-end cannabis lines, and revolutionary growing practices. These startups, who have raised the most of any cannabis tech startups, are the ones to watch as the landscape shifts and marijuana becomes a more attractive industry to invest in.
1. Privateer Holdings
Privateer Holdings sits way atop this list, the only marijuana tech startup to have raised over $100 million. Founded in 2010 in Seattle, today Privateer boasts four different brands in the marijuana industry. Aside from Tilray, their medical cannabis brand, and Goodship edibles, they also acquired Leafly in 2011. Leafly has 13 million monthly users and is the largest cannabis website internationally. They also launched Marley Natural in 2014, a brand centered around high-end (or as we in the community call it, “top shelf”) strains, which is already ubiquitous in dispensaries across the country.
Privateer made headlines in 2013 when it hired a DEA agent, some news outlets believing it legitimized marijuana as a medicine, especially where government was concerned, others that the move was also proof positive prohibition was coming to an end. Privateer champions marijuana as a medicine--one of Privateer’s founding partners, Christian Groh, was even an advisor on AB 223 Compassionate Use Act of 1996.
2. Pax Labs
Founded in 2007 and based in San Francisco, Pax focuses on one main product line, their loose leaf and concentrate vaporizers. With supplemental merch including grinders and more, Pax’s brand is well-established. The muted dark-toned, uniquely shaped vaporizers are their main offering, expanding from the original Pax into Pax 2 and 3, some better for concentrates, others the plant itself. Pax is a high-tech company--the vaporizers’ temperature and more are controllable via a mobile app.
Pax was founded by two Stanford design program graduates. Co-founder and CTO Adam Bowen boasts over 15 years of experience in consumer product design, with 11 years experience in tobacco product innovation--two industries that well-equipped him to found Pax Labs. High-profile investors include Fidelity and Tao Capital Partners.
3. Surterra Holdings
Surterra’s first facility was a 6000 square-foot indoor farm, which they built before getting final approval from the state. The facility itself is impressive and borderline artisanal, hand-watered and soil-grown (rather than hydroponic). The vertically-integrated Atlanta based company was one of only six to be approved by the state of Florida to cultivate, process, and dispense medical marijuana. In 2017, it was selected out of 43 other companies to receive a medical marijuana license in Texas.
Growing--and bringing the tech world to the cannabis industry--is where Surterra really stands out. At that massive climate-controlled indoor farm, they A/B tested two disparate growing conditions and tracked them using a software program. Surterra heavily focus on the medicinal aspect of marijuana. CEO Jake Bergman notes, “We also felt that in the states where it was legal, everyone had overlooked the true medical benefits of cannabis production. When you go to Colorado, it’s very much ‘wink wink, nod nod’ … We saw demand for conditions like epilepsy, Parkinson’s disease and cancer that no one was addressing in a therapeutic fashion.”
Surterra has branched out into gels, topicals, and drops. They fine-tune levels of THC vs. CBD (another compound in marijuana that does not get you high, and instead only functions medicinally) for different ailments: a concoction to treat epilepsy, for example, has 10 to 15 times more CBD than THC.
Eaze is a California-based delivery service. Very full-service, they deliver medical cannabis as well as their own lines and other popular brands of drops, vaporizers, and more. Founded in 2014, it is hailed as the fasted growing tech startup in the cannabis industry. Concerned with legalization issues, Eaze shares anonymous user data to help improve forming legislation around marijuana.
Like a lot of tech companies, Eaze is a part of the gig economy, which recruits people like Doordash or Uber (but pays better, starting at $15 an hour). With 300% increase in year over year sales, Eaze raised $27 million in their funding series B round. They are also known for being able to spend $1 million each month, for the sake of “investing in growth,” according to CEO Jim Patterson.
Medmen operates 18 facilities in 3 of the biggest cannabis-centric states: New York, California, and Nevada. Specifically, they go where the action is: Los Angeles, Orange County, San Diego, Syracuse, Buffalo, and Las Vegas all have Medmen storefronts and growing facilities. The website proudly calls these, “scalable, highly efficient growing facilities using the latest in agronomic technology and sustainable techniques.”
In a founder’s own words: “We do not run pot shops, we manage class leading retail stores that happen to sell marijuana and marijuana products.” Medmen is the largest financial supporter of legalization at the local, state, and federal levels, supporting candidates and pro-legalization groups. Founder Adam Bierman is known as a champion of legal cannabis. Founder Andrew Modlin is the architect of their message and brand, which is easily discernible in looking at their high levels of organization and political involvement.