It’s widely known that the pharmaceutical industry is huge. In the USA, there is a new medicine in the spotlight. Currently, weed is a popular industry, and it is getting more and more investments. Medical and recreational uses are getting legal in multiples states. In the USA you have a National Law, but you also have a State Law. Even though it is not legal nationally, you can buy it in many places in the country. This new business opportunity is being explored for many players.
Investments are flowing into Weed startups. Since 2014, around $700 millions were invested. It is a significant amount of money, but it could be even more if you consider the potential of the market. The expectation is that in 2018 it will be a $10 billion market. Many funds can’t invest in drugs. The VCs who are investing use the medical approach to justify the investment, but since it is not national legal, it’s not that simple.
Medical benefits of TCH (the principal element of weed) are being broadly explored. In California, for example, it was legal to use Marijuana as a medicine for a few years. Just this year the recreational started to be legal. The most common uses of Medical THC are against pain and insomnia. Indeed, researchers say that it can help to reduce opium overdoses and save about $220 million per year.
The market is getting used to this new products. More players are getting into it, and the price has dropped from $44 to $12 per gram in 3 years. Plus, more 300.000 jobs might be created by 2020. This is a clear example of legal changes creating business opportunities. As I mentioned before, timing is one of the most important facts for a startup to be successful.
Some startups are already making money out of it. The startup Eaze focused on delivery, is one example. It is one of the most funded Weed Startup. There still are many opportunities out there in this field. Despite all the market opportunity, I’m not saying that cannabis should be legal in Brazil or any country. I believe it is a sensitive social matter and we need to discuss it more. On the other hand, I can see it bringing some social benefits and also businesses opportunities.