The Columbian / Associated Press

Investors urged to be high on pot

Inside a Brooklyn ballroom, investors smoothed their suits and opened their iPads, preparing for a day of sizing up hungry entrepreneurs and impassioned lobbyists.

One after another, startup founders took to the stage, making their cases for a round of venture capital. There was a building materials manufacturer, a catering company and, as one would expect, the inventor of a vaporizer.

It was high time to monetize pot.

Here at the Investor Pitch Forum last week, hosted by the cannabis industry investment and research firm The Arcview Group, some 200 investors Arcview described as “high net worth” met with dozens of companies looking to cash in on the promising new market of legal recreational marijuana.

Cultivating Spirits, a caterer that pairs organic dishes with fine wines and just the right weed, got the attention of more than a dozen investors.

Mule Extracts, a cannabis-oil extraction company, generated some buzz, too. Chief Executive Officer Rachel E. Kurtz made it through a “Shark Tank”-style wringer and came out the other end to applause, hopeful of finding an investor at the forum.

It’s a good time to be investing in the space, at least in terms of market expansion. Recreational weed is already legal in Colorado, Alaska, Oregon, Washington, and Washington, D.C., and it’s on the ballot in nine states in November. If California legalizes it, the industry could triple in size, to $18 billion. Analysts expect it to balloon to $50 billion by 2026.

Investors at the forum constantly and animatedly discussed the legalization efforts, which will have a big impact on their returns. Arcview CEO Troy Dayton stressed the importance of lobbying efforts in key states, including California, and expressed frustration with the Drug Enforcement Administration, which has maintained marijuana as a schedule 1 drug.

Although a recent poll found that most Americans support legalizing marijuana, it remains to be seen how many will dabble in recreational use. A review of about 40,000 legal marijuana purchases made in Washington state from September 2014 to July 2016 found that the average consumer spent $647 annually on the pleasure/vice. The yearly expenditure on tobacco smoking is $2,555 and $1,560 for alcohol, according to data from Bankrate.