Is a Cash High Coming for the Marijuana Industry?

This is one way to address why Shively — whose company is Diego Pellicer — doesn’t seem very worried about a brand like Marlboro. Philip Morris certainly has the capital, the infrastructure, and the skill to invade the industry, but that’s exactly how current industry participants — including customers — are expected to see it: as an invasion.

The fact that THC remains illegal in the eyes of the federal government is arguably the biggest liability facing the industry. Under the the Controlled Substances Act enacted by Congress in 1970, THC is a Schedule 1 drug. Until THC is rescheduled, the cultivation, transfer, or possession of the substance is punishable by federal law, and any business facilitating or carrying out these activities faces possible closure, seizure of funds and property, and owners and employees face the real and present risk of federal prosecution.

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This legal headwind seems to be the primary obstacle in the way of both business and investment activity. It’s unclear if funds such as Emerald Ocean Capital will be able to provide a substantial tailwind, but their existence alone will do some trailblazing. If the fund manages to attract enough attention from investors — and the government decides not to give it a hard time — its success may encourage investors who are on the fence to take a more serious look at the industry.

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