One evening in February 2015, about two dozen Wall Street guys crowded into a Manhattan apartment to hear about an investment opportunity. After everyone settled in with drinks, the host introduced himself.
“I raise capital for private equity funds,” he said. A few months earlier, a fund had asked him to look around the burgeoning legal marijuana industry for a company “that can absorb a certain amount of capital, you know, north of 20 to 30 million.”
Despite tremendous demand for weed, it wasn’t an easy assignment. Colorado, the country’s first recreational market, had barely been open a year. Hundreds of businesses in the state sold very similar products, and predictions about which might grow into a national brand were little better than guesswork. The host had met Michael Wendschuh, the evening’s guest speaker — and a co-founder of the Colorado marijuana startup Ebbu LLC — when a mutual friend described Ebbu as “the one company I know that could probably” put $20 million to work.
Wendschuh, who’s better known by his college nickname, Dooma, is thin and fit with a salesman’s bulletproof smile. He began his pitch noting that the markets for the world’s favorite mind-altering drugs — caffeine, nicotine and alcohol — were all in decline. “We can’t function as a society without psychoactives…[But] we’re worried about the costs to our own health and society of the psychoactives that we use.” Take alcohol, he said, It helps us close deals and open up on first dates, but it also leads to liver cancer and car crashes.
“Our world needs a better class of psychoactive,” but Dooma said marijuana is not that drug. “Cannabis is simply too unpredictable for the mainstream. One time it will work for you, the next time you get the munchies, the next time you’re paranoid, the next time you use it you’re locked to your couch.”