Marijuana entrepreneurs routinely are turned down for bank loans or deposit accounts and have struggled to attract financing from private investors.
But thanks largely to recreational pot’s new legal status in Colorado and Washington and more states approving medical marijuana, checkbooks are opening and investment partnerships are being signed.
Colorado business owners are at the hub of a new national network that matches venture capitalists with budding marijuana entrepreneurs.
At a recent investor conference in Seattle, two Colorado firms with money to invest listened to a pitch from a third local business seeking growth capital. The common ingredient: They sell cannabis products or provide services to the industry.
Finding funds to grow has been a struggle, said Dan Williams, president of Denver-based Canna Security America, a firm that installs security systems at marijuana dispensaries and at grow operations.
Williams and his employees never touch cannabis — only electronics — yet until last month, they had been shut out of traditional sources of financing.
Williams didn’t even bother applying for a bank loan when he started the business in 2009. Banks typically fear regulatory repercussions because of marijuana’s still-illegal status under federal law.
“We were a zero-capital startup,” Williams said. “We would do a job so that we could go buy a ladder. Then we would do another job so we could buy business cards.”
Earlier this year, Canna Security moved its headquarters from Williams’ basement to commercial office space in northwest Denver. The company is preparing to launch operations in Washington and several states with recently enacted medical marijuana laws. Williams projects that his staff of five could grow to more than 30 in the next two years.
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