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Why Are Venture Capitalists Interested in Marijuana Investments?

Jan 13, 2015
Posted by: Marketing
Category: General
The number of marijuana investments by venture capitalists took off in 2014, offering a ray of hope that banking options could be closer than we think.
venture capitalists marijuana investments

Marijuana company Privateer Holdings is raising $75 million in institutional financing for a marijuana startup – a figure it should easily reach within the first quarter of the year. In fact, several venture capitalists are contributing to the effort, including Founder’s Fund billionaire Peter Thiel. It begs the question: Why are venture capitalists so interested in marijuana investments all of the sudden?

Marijuana Payment Solutions are Regressing

Currently, there are no payment solutions for legalized marijuana products. There is only one way to pay – cash. In fact, the state of payments for legalized marijuana has regressed. At Instabill, we briefly had a credit card solution in place, then shifted to a cashless ATM option, but, like many other payment processors, currently find ourselves in s state of limbo. The banking industry is adhering to the federal law which deems the growth, sale and use of marijuana illegal, which explains banks reluctance to process credit and debit transactions for such.

Marijuana Investments Near $75 Billion in US, Canada

Between the U.S. and Canada, nearly $75 billion was put toward marijuana investments by venture capitalists, according to a Jan. 8 article on TechCrunch.com.

One has to wonder: Do they know something we don’t?

Over the last year, payment processing for marijuana products – especially in the legal states – has become the talk of the industry. To conduct transactions solely in cash is painstakingly inconvenient and unsafe. A recent piece on 60 Minutes profiled the impact of marijuana in Colorado where shops, warehouses and dispensaries deal solely in cash. The segment did mention possible regulated payment processing options in the future, but how far away?

With sudden interest in marijuana investments by venture capitalists, it can’t be too far.

Keeping a Keen Eye on the Marijuana Industry

Instabill believes credit and debit card processing for marijuana will become an option in the near future. As a credit card processor for high risk industries, Instabill already has domestic, international and offshore banks in place for when it happens. To find out more about Instabill’s high risk merchant account options, select the live chat option below or call us at 1-800-318-2713.

The backbone of ECS World is our PCI compliant payment gateway. Accept credit cards online, over the phone, or via mail order with our simple and easy-to-use payment processing solution. No hidden fees and no volume caps. Learn more today.

ECS World provides credit card processing services to online and MOTO businesses with its PCI compliant payment gateway solution. Whether you want to process onshore, offshore, or internationally, they have a solution for you!

Offering offshore merchant accounts with credit card processing services. Ecs-World provides credit card and payment processing services worldwide, along with risk management techniques, direct debit services and fraud protection.

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