StarGreen Capital is a subsidiary of StarPoint and up until recently, they have focused their activity in real estate and real estate ventures. Recently however, StarGreen has announced that they plan to invest approximately $100 Million dollars into the legal medicinal and recreational cannabis industry. StarGreen is initially focused on the California industry, as the state is poised to have legal recreational use early next year and already has a booming medical cannabis industry. In 2016, Americans spent $6.9 Billion dollars on legal cannabis, a thirty percent increase from 2015, and it is projected to grow twenty percent annually through 2021. StarGreen plans to invest in all areas of the legal cannabis business, from seed planting all the way to the final sales, and everything in between. One of the main issues that those in the cannabis industry face is access to capital during their business development. StarGreen plans to alleviate that barrier by providing venture capital industry leading experience which will lead to strong, meaningful partnerships between the firm and the cannabis businesses.
Although StarGreen plans to invest in the cannabis business, they have a specific focus in mind: joint growing and real estate ventures. They envision providing multiple startups between $1 Million and $5 Million to allow them to overcome various challenges that startups face: access to capital to get their business off of the ground. As StarGreen’s roots from StarPoint are in real estate, they would like to invest and support those that plan to not only grow the cannabis, but open up a retail shop in which to sell it to consumers: a true end to end business that encompasses growing, harvesting, producing and selling. Although StarGreen is open to all sorts of businesses in the cannabis industry: cultivation, marketing, dispensaries, StarGreen CEO Paul Daneshrad wants to invest in companies that will provide a consistent brand and product in an ever-changing industry whose regulations vary widely depending on the state (although StarGreen is focusing primarily on California, they are open to other states that have both legalized medical and recreational cannabis). StarGreen plans to help those cannabis entreprenuers navigate those various regulations, to ensure they are compliant while producing a safe, attractive product in an increasingly competitive marketplace.
StarGreen has said it is unique in the sense that they already have the capital raised, and they are ready to invest in entrepreneurs and startups, which makes them unique in a marketplace that is now seeing the potential for explosive growth within the cannabis industry and are scrambling to raise capital to invest in those startups. StarGreen has a thirty-year history in venture capitalism, and has a $1 Billion portfolio, primarily in real estate ventures. StarGreen is now shifting its priority to invest in the “green rush” of today’s cannabis industry, and should be a boon to those invested in the industry but struggling with capital.
This is one of the first venture capital firms to invest in marijuana based businesses – which is a huge risk because it is still federally illegal. This shows how much profit potential their actually is in marijuana businesses.