Last February, as the marijuana industry in Colorado began to explode, we reported on the opening of CanopyBoulder, the first of it’s kind, cannabis startup accelerator.At the time, co-founder Patrick Rea had said they weren’t looking for the latest strains of marijuana but rather business ideas that supported the growing industry, and growing it is, like a weed.
But even with the enormous business boom, some of CanopyBuilder’s startups have come out of the woodwork and they’re not happy.
The International Business Times reported on Monday that as their latest cohort of startups is beginning at CanopyBuilder, others have resorted to creating websites to talk about how unsatisfied they were with the accelerator. Two weeks ago, some of the acclerator’s previous startups had created the website canopybuilder.co stating;“We are a group of companies that have been through the ‘mentorship driven seed stage investment program’ that Canopy Boulder offers and we are furious. It is our opinion this cannabis accelerator is nothing but a cash grab, and we want to warn other entrepreneurs.”
Some of these disgruntled startups feel that CanopyBuilder may be taking advantage of the early stage companies in an industry that is early stage itself. IBT reports that the cannabis industry is poised to be worth $20 billion dollars by 2020, in retrospect, the technology sector is set to hit revenues of $287 billion this year and global biotech should eclipse $400 billion by 2017. $20 billion is of course nothing to scoff at.
But are these disgruntled startups just going through accelerator growing pains?
In the cohort based accelerator model there are some companies that will stand out and be quick to score follow on funding. Others will flounder and need to work even harder to secure lower amounts of seed funding. This happens in all cohort based models. With between 70-80% of startups failing (depending on who you talk to), naturally there will be winners and losers. Is that what’s going on here? Probably so.
The two 2015 classes of CanopyBuilder went on to raise $10 million dollars in follow on funding. Tradiv an online marijuana market place startup raised $1 million dollars. BDS analytics, a company that provides marketing analytics for the marijuana industry raised $1.5 million dollars. These types of rounds are typically unheard of for a new accelerator outside of the typical coastal areas.
So is it a success?
That would depend on who you ask but it seems that CanopyBuilder is doing all the right things. Micah Tapman, Patrick Rea, and Mark Nottolli, the three founders of CanopyBuilder obviously have an appetite for risk. They also have to have the thick skin that any startup accelerator founding team needs to succeed.
They’ve obviously attracted attention as two new accelerators have opened in the space, Greenhouse Ventures in Philadelphia and Gateway in Oakland.