California has been at the forefront of American innovation for decades now.
In fact, it’s most responsible for our newfound, rapidly-expanding marijuana renaissance.
Remember, it was California that first legalized medical marijuana all the way back in 1996. It was ahead of its time then, and it’s ahead of its time now.
It’s the world’s sixth-largest economy, and it’s home to 53 Fortune 500 companies.
We’re talking about monstrous growth stories like Apple, Microsoft, and Facebook.
And of course, one of the reasons so many companies continue to take off from California is that the state is flush with venture capital.
Indeed, California’s pockets are the deepest in the country, making up 46% of all total U.S. venture capital funding.
So even though the state just launched recreational pot sales on January 1, it’s home to many cannabis-based startups pioneering innovation.
That includes the massive brain trust that is Silicon Valley, where MIT tech gurus and Harvard grads are already at work on breakthrough technology.
We’re talking about solvent extractors that squeeze as much THC as possible from cannabis plants. We’re talking about plug-and-plant grow systems for home-growers. And we’re talking about vaporizers, which have quickly unseated joints and bongs as the go-to instruments for smoking.
One company has a vaporizer that features full app integration and games built into the device. And none other than Apple has filed a patent for a vaporizer of its own.
But of course, now that California has entered the recreational weed market, things are about to really jump off.
The total market will be worth more than $5 billion this year. And it will only get bigger.
There are nearly 14 million adults over the age of 21 in the Los Angeles Greater Metropolitan Area and approximately 5.3 million of those people are cannabis consumers.
Furthermore, the Golden State gets more than 260 million out-of-state visitors every year. And those tourists spend more than $122 billion annually on leisure goods and services. Consider, for instance, that tourists spend an estimated $7.2 billion a year on wine. Imagine how much they’ll spend on cannabis products which, unlike wine, aren’t fully legal and sold everywhere.
And if and when the federal government does finally come to support legalization, it would ultimately culminate in a $100 billion market.
In fact, the market is so big already the state of California is trying to form its own bank just to handle marijuana money.
Remember, under federal law, offering banking services to cannabis businesses can qualify as money laundering. So right now it’s strictly a cash business. But California wants to fix that problem by creating a taxpayer-backed bank to handle the cash coming in — one that doesn’t fall under control of the federal government since it still lists marijuana as illegal.
Given that, it’s easy to see why so many marijuana companies look to California as the land of opportunity.
And investors should too.
By: Jason Simpkins.