Yo, pothead investors and founders

Dear readers,

This week, my colleague Joseph Gan wrote a piece called “Cannabis tech on the rise in Asia.” It’s a fascinating read, and it triggered good memories of my time at Y Combinator (YC) in 2015.

Being a born and bred average Singaporean, I live in a society where marijuana is a big no-no. I first got to know more about cannabis (or pot, weed – all the same) when I met YC batchmates who founded Meadow. During one of the founder dinners, they explained what their company does, but I didn’t quite understand back then. It did, however, give me a lot to think about. Is that shit legal? And why are people back home so against it?

Photo by Wesley Gibbs on Unsplash

Fast forward five years, and marijuana is slowly being legalized in the West but is still largely prohibited in Asia. Oddly enough, though, the continent is home to the highest number of cannabis users in the world, with an estimated 86 million in 2019, according to Future Food Asia. 🤔

I’ve gained more understanding about it over the years, and now I believe that marijuana is just like alcohol or cigarettes – they all give you a good buzz. (Fair warning, however: You should never take the consumption of these substances to the extreme.) Unfortunately, marijuana has a bad reputation because it is categorized as drugs. And people generally regard drugs as evil or harmful because they’re highly addictive. Other factors such as culture, familiarity, and acceptance are also at work:

“Unlike weed, people have consumed alcohol en masse in the western world for a long time. Alcohol has been very much part of western history. From the bible to other famous literary books they all involve alcohol in it.”

Money is also an issue, at least in the US:

“Alcohol is legal because states have figured out how to make money off of it. Cigarettes are legal because they are taxable and profitable.

Weed is just now becoming legal because (wait for it) states are figuring out they can make money off of it. It’s not really any more dangerous than alcohol and cigarettes, but the way to tax it has been an issue.”

If it’s legal and there’s money to be made, would you start a company to ride this wave? And would investors back those companies?

Let’s take a quick look at the opportunity and comparables: