Would you invest in a medical-marijuana company if you thought its profits would grow like, um, a weed?
As the WSJ reports, the industry is expanding as more states decriminalize the use of pot to treat pain, MS-related muscle spasms and other conditions. And that’s attracting private investors and raising the possibility of public offerings.
Most of this action is happening in Colorado and California, the states with the biggest medical-marijuana markets. Among the deals in the hopper, according to the paper: a seed supplier has raised $500,000 in a private financing round and hydroponic-equipment supplier GrowOp Technology and medical-marijuana vending-machine company Medicine Dispensing Systems are each planning IPOs this year. (General Cannabis, with subsidiaries including a marijuana-dispensary website and a dispensary-management business, is already public.)
Meantime, there are plans to launch a hedge fund, called Kaneabis, to invest in the medical-cannabis industry, the WSJ reports.
That said, there are obstacles to attracting investment — namely the fact that the drug is illegal under federal law. And, of course, there will have to be the potential for profits to attract investors.
Would you park part of your 401(k) in pot?