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Steve Berg, a venture capitalist believed he had an unquestionable business model.
His San Francisco firm, the ArcView Group, vowed to find “angel investors” for business startups that offer products and sevices for the $1.5 billion medical marijuana industry in California.
But last week, the U.S. prosecutors in the state announced legal actions against targeted dispensaries of medical marijuana, and threatened the landlords with property seizures.
All of a sudden, the burgeoning medical marijuana sector in California is dealing with fear and introspection. Advocates for the industry are calling for more state regulation in the hope that such action would weed out bad elements in the trade, and ultimately, ward off the feds.
The action of the government has left politicians, medical marijuana businesses, and potential investors contemplating the risks of operating in the industry.
Berg, whose firm is seeking to fund companies that offer legal services, sales software, marijuana vaporizers and many other items for dispensaries, was one of the panelists at a previously scheduled forum on “jobs in the legal cannabis industry.”
The mood at last weekend’s event was unexpectedly grim. The day before, the four U.S. attorneys in California has declared that the medical marijuana law of the state had been “hijacked by profiteers” and touted charges against dispensaries and speculators, whom they claim is raking in tremendous amounts of profits from the supposedly nonprofit marijuana stores.
Assemblyman Tom Ammiano, a Democrat from San Francisco, said that the federal actions are a clear signal for California lawmakers which should galvanize them into enacting state regulations “to provide clear lines” for the distribution of legal medical marijuana.