An investor with a long track record in the nascent marijuana industry is raising a $30 million venture fund to go after tech investments in the sector.
Called 7thirty, the new fund will be led by Micah Tapman, who was formerly a partner at CanopyBoulder, a venture fund and accelerator for early stage marijuana companies.
Tapman, who has worked with cannabis companies for the last five years, told Business Insider in an interview that the timing was right to start a new venture, particularly as traditional venture firms are still reluctant to invest in cannabis.
Read more: A $200 million marijuana VC breaks down how he picks what companies to invest in
The fund is backed by OurCrowd, an Israeli equity crowdfunding platform that connects accredited investors with venture deals.
Tapman is now speaking with family offices and high-net worth individuals to raise money for the fund, and he says he's had a lot of "positive interest."
The fund will focus on investing in early stage agricultural technology and biotech companies in the cannabis space, and Tapman said he hopes to write checks "north of $500,000."
"We generally want the company to be producing some revenue," said Tapman, with the caveat that he's open to looking at tech companies that have developed intellectual property but aren't yet making money.
More specifically, Tapman is interested in backing startups that are solving biochemistry problems: as in, how to grow marijuana plants more efficiently — and with less pesticides and an emphasis on organic pest and fungus control.
"Of course if people come up with better organic solutions to these things for cannabis, there's a 99% chance it can work for other plants as well," said Tapman. "So you can easily go back to lettuce growers or tomato growers and say 'hey we can solve this problem.'"
And critical to 7thirty's investment process, Tapman says, will be to focus on backing competent management teams.
Like any other emerging industry, "there are a lot of scammers" in the marijuana space, said Tapman, "so weeding out the scammers and finding the real businesses is certainly my number one priority."
The fund will be be headquartered in Boulder, Colorado — where Tapman lives, and a region that is seen as the cradle of the modern cannabis industry — with another office in New York City.
Though Tapman said he's looking to keep a "lean team," he recently hired a research analyst in the New York office, and is looking to hire a few more "mid-level" folks on both the research and fund management sides.
For 7thirty, the New York location gives the fund a presence near Wall Street, as well as an easy direct flight to Tel Aviv, where OurCrowd is based.
Israel has led lots of innovation into marijuana research over the past few years, since the Israeli government has actively supported scientific research into the marijuana plant's active compounds.
To Tapman, that means there will be lots of Israeli biotech and ag-tech companies seeking funding — and he'll have an easy access to deal flow with OurCrowd's backing.
And as for which areas he's avoiding?
"I am not bullish on Canadian public stocks," said Tapman. "I think that they are a bad investment right now because they're overvalued."
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