Medical Cannabis: The Next Frontier of Medtech Investing

Introducing the $35 billion dollar industry on the horizon

Last year, over 1 million Americans used medical marijuana to treat or ease a medical condition in states where it was legalized. As of April 2015, half of the United States - 25 states, plus D.C. - have legalized cannabis for medical use. Meanwhile, the industry is estimated to reach $35B by 2020.

Medical cannabis companies are publicly traded, and every year more R&D startups are cropping up across the world. The medical cannabis landscape is ripe with investment opportunity.

Read on to learn more about industry that is projected to surpass both the NFL and organic food industries by 2018.

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Jon Medved

Founder and CEO

Mainstream marijuana milestones:

2011

Privateer Holdings raised its first round at $7 million

Funded Startups: Cybersecurity

$1.75 million invested

Moving security infrastructure to the cloud, securing any asset on any network, anywhere.

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Elan Zivotofsky

General Partner, Head of Investments

Evelyn Rubin

Business Development Partner

Medical Marijuana in the Mainstream

The marijuana industry experienced a major milestone when Founders Fund, the Silicon Valley-based, Peter Thiel-backed venture capital firm, became the first traditional investment house to put capital into the cannabis industry. Founders Fund participated in a recent $75 million round for Privateer Holdings, a hybrid between an investment firm and incubator for marijuana-related development. (VentureBeat)

Zack Miller

Head of Investor Community

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Elan has 15+ years of extensive, on-the-ground experience focused on researching, raising capital for, and investing in Israeli companies. Positions include Managing Partner of the Prelude Israel Fund, SVP and Head of Technology investment banking at Lehman Brothers in Israel, portfolio manager at a global $1.5 billion hedge fund.

$3.33 million invested

Analyzing behavioral and cognitive response patterns to generate unique user profiles, protecting against advanced cyber threats.

$1.43 million invested

Using behavioral analysis & anomaly detection to protect websites from cyber attacks.

$3.52 million invested

Security solution for mobile devices that addresses the Bring Your Own Device (BYOD) trend in corporate enterprises.

$0.73 million invested

Patented enterprise file security software for complete control and protection of files both inside and outside the organization.

$3.91 million invested

Personal finance security that scans credit and debit card transactions, and through crowdsourcing detects and alerts users of possible scams, billing errors, and fraud.

To view OurCrowd's full portfolio and currently funding opportunities please visit the Browse Startups page

Medical Cannabis:

The Next Frontier of Medtech Investing

Jonathan Medved is an investor, serial entrepreneur, and according to the Washington Post, ”one of Israel’s leading high tech venture capitalists.” Medved has invested in over 100 Israeli startup companies, helping 12 of them to get to valuations in excess of $100 million dollars.

Evelyn has more than a decade of experience in Israel’s venture capital and technology industries. Positions include Sr. Editor at Seeking Alpha, Sr. Associate at JVP and Director of Business Development at CipherIT, an early stage mobile security company.

Zack has been growing investment businesses for the past decade. He's held senior leadership positions and consulted to some of the top next-generation finance sites including Seeking Alpha, Lending Club, LearnVest, Wall Street Survivor, Covestor, and SigFig.

Connect:

Cybersecurity solution that morphs programs in order to make them invisible to attackers.

$1.48 million invested

The industry being built around medical cannabis – including its implications – is enormous. Here are a few facts that tell the story of this budding industry.

Medical Cannabis: By the Numbers

In 2015, 25 US states have legal medical marijuana laws; 10 countries have legalized medical marijuana: Austria, Canada, Czech Republic, Finland, Germany, Israel, Italy, the Netherlands, Portugal, and Spain

The legalization of medical cannabis is a mainstream 2016 election issue (Newsweek)

A bipartisan bill - the CARERS Act - allows doctors, patients, and businessmen to freely participate in the cannabis industry and federal funding of cannabis-related research

Medical

Over 100 million Americans suffer from chronic pain (WedMD)

How does medical marijuana affect the brain? Watch this CNN video

There are over a dozen health conditions and diseases that medical cannabis has shown to help, including: AIDS/ HIV, Arthritis, Cancer, Fibromyalgia, Glaucoma and Multiple Sclerosis (CNN)

Sales

$2.7B of legal cannabis was sold in the US in 2014; those numbers are predicted to grow to $10 billion by 2018 and $35 billion by 2020 (Washington Post)

By 2020, the legal cannabis market will be worth more than the NFL and organic food industries

Entering the financial mainstream: In early 2015, Peter Thiel-backed VC firm invested in medical cannabis

A World Leader in Advanced Medical Cannabis Policy and Tech: Israel

“Israel is truly at the forefront of medical marijuana,” said Ethan Nadelmann of the Drug Policy Alliance in Washington.

With its R&D reputation and nickname of Startup Nation, is it any wonder that Israel is a world leader in medical marijuana research and development – as well as implementing legislation for supporting the use of medical marijuana. Here are a few ways in which Israel is shaping policy and medical marijuana practice:

Gadi founded and managed three startups in character and voice recognition and wireless communications, and sat on an advisory board of RIM (BlackBerry). He also served on the US Senate committee that defined the US public alert system, and in the spring of 2013, Gadi was awarded entrepreneur of the year award from Blackberry.

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Gadi Mazor

General Partner,

CTO

David began his career as an investment analyst at Blackstone in the Real Estate Private Equity group, where he was involved in multiple leveraged buyout acquisitions with a combined value of over $700 million.

Connect:

David Stark

Principal,

Investment Team

Policy

2014

Three years later, the company starts its second round, aiming for $75 million

2015

Peter Thiel’s Founders Fund is first institutional cannabis investor; joins Privateer’s second round

Submit

As a medtech leader, Israel has also produced several companies focused on developing solutions for improved medical marijuana use. These cannabis tech leaders include publicly-traded R&D pharmaceutical and treatment company One World Cannabis and agro-breeding solutions company BreedIT Ltd.

There are also investing opportunities in medical cannabis as earlier-stage startups bring their solutions forward. As mentioned earlier, Syqe Medical is the world's first medical-grade metered-dosed cannabis inhaler, giving physicians the assurances needed to prescribe cannabis as a standardized drug.

1992

The first approval is granted for a patient to use medical marijuana

2007

Israel's Health Ministry starts its medical marijuana program

2015

Permission for 20,000 patients to use medical marijuana; number of physicians able to prescribe jumps 30%.

2018

The number of Israelis with prescriptions for medical marijuana will rise from 14,000 to 40,000 (Washington Post)

2015 (cnt'd)

Patients will soon be able to purchase their medical marijuana from authorized pharmacies

Source: MJ Daily

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Medical Challenges and Potential Solution

Why is it currently impossible to obtain FDA approval on medical marijuana?

FDA approval on any drug requires carefully conducted clinical trials in up to thousands of people to determine benefits and risks medication. To date, it has been impossible for researchers to conduct a large-enough scale trial of marijuana; without a meter-dosed device to control the study, reliable tests cannot be done.

What is the problem with cannabis as medication in its current form?

Any dose of cannabis in its current form is problematic as it cannot be reliably measured, it is impossible to repeat, and effects are unpredictable.

How are these challenges being overcome in the marketplace?

One player making waves on the medical cannabis scene is Syqe Medical, the developer of the world's first meter-dose botanical inhaler. Syqe solves both challenges: With the Syqe Inhaler, doctors can measure and track patients' doses with the device and accompanying dashboard software. The inhaler is built to provide prescription-grade precision; instead of measuring the plant in grams, medical doses can be measured in tens of thousandths of a gram.

With this type of precision, this device also allows for effective clinical trials to take place and FDA-approval could be on the horizon.

Source: The Huffington Post