OAKLAND, CALIFORNIA, UNITED STATES (REUTERS) – Two years ago, Alan Gertner was head of Google’s Asia-Pacific sales team in Singapore, handling more than $100 million (USD) in business.
Now, he begins his day in a small Toronto office, building Tokyo Smoke, a cannabis brand that sells fancy smoking accessories such as vaporizers and bongs that cost up to $335 CAD ($261.72 USD).
Gertner is among a growing group of entrepreneurs and investors who are trading in high-paid corporate jobs in the technology and finance sectors to launch start-ups focused on the fast-growing marijuana industry.
Two decades after the first legalization of medical marijuana by a U.S. state, pot-based businesses are professionalizing their operations by luring top talent from other industries and billions of dollars in investments from Wall Street firms. A new commodity index even offers data on the going rates for greenhouse and field-grown weed.
Gertner said the idea behind his career change was simple. “The opportunity,” he said. “This will likely be the only time in my life that I see such a large-scale market move from the black market into the legal market. Consumers are already consuming cannabis. Here’s this incredible moment where all around the world the cannabis revolution will happen within the next 10 years.”
He’s raised $10 million in capital in 10 months as the chief executive of Tokyo Smoke, despite the continuing taboos and legal risks in the industry.
The legal cannabis market, currently worth about $8 billion, is predicted to triple in size to $22.6 billion in total annual sales by 2021, according to cannabis industry tracker, Arcview Market Research. That could make it bigger than the America’s most profitable sports organization, the National Football League, which saw about $13 billion in revenue last year and aims to reach $25 billion by 2027.
So far in 2017, there have been at least 27 investments by venture capital funds in cannabis companies, compared with just 10 deals in 2016 and nine deals in 2015, according to venture capital data provider CB Insights.
The influx of capital helps finance the paychecks of 150,000 workers in the legal U.S. pot industry, representing job growth of 20 percent from a year ago, according to an estimate from the cannabis website Leafly, a marketing firm for dispensaries and other cannabis firms.
Eric Eslao, founder of Defonce Chocolatier – which makes artisanal cannabis-infused chocolates costing $20 a bar – was a senior production manager at Apple just over a year ago. He feared the stigma of joining the weed industry, but it didn’t stop him.
“With Asian-Americans or Asian families, cannabis is still one of those taboos. Having that conversation with my mom who is not only Asian, but also very Catholic and grew up in a generation where cannabis was considered just as bad as any other drug, schedule one drug, it was kind of a hard conversation to have, or I thought I was going to have. But she actually was really open to the idea and she actually eats the product on a regular basis,” he said.
In the United States, 30 states have legalized marijuana for recreational or medical use, but possession and sale is still banned at the federal level.
The administration of U.S. President Donald Trump has sent mixed signals on its enforcement policy. Attorney General Jeff Sessions has vowed to crack down on the pot trade in states with legalization laws, but Trump has extended a ban on using federal funds to interfere with the industry through the end of this year.
Americans increasingly support marijuana legalization, according to the Reuters/Ipsos opinion poll. The number of adults who believe it “should be legal” to possess small amounts of marijuana rose to 54 percent in a poll conducted between Oct. 27 and Nov. 10, up from 41 percent in a similar poll in 2012.
$1 USD = $1.28 CAD