Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Sarah Grillo/Axios

Venture capitalists are investing record sums in marijuana startups, growing twice as fast as 2018.

Why it matters: These investments are a bet that marijuana will be legalized in the U.S. at the federal level, as it has been in Canada.

Details:

  • The sector garnered $1.3 billion through mid-June, compared with $1 billion for all of 2018 and $370 million for 2017, according to PitchBook Data.
  • Both the 2018 and 2017 figures were all-time hauls at the time.
  • Some of these investments are in actual cannabis growers, while others are in adjacent businesses needed to build out the industry (logistics, finance, retail, accessories, etc.). Kind of like the difference between oil producers and oilfield services.

There's a catch: Legalization would expand the total addressable market, or TAM, for growers, but could render the related startups obsolete.

  • For example, why would growers need cannabis-specific transportation companies if FedEx began working with them?
  • Why would dispensaries need specialized financial facilitators, once banks could handle their accounts?
  • And why would dispensaries or specialty retailers be needed at all, once neighborhood pharmacies and gas stations could handle the stuff?

It's a catch-22 that could slow the industry's growth, particularly given that many of the biggest venture capital firms still avoid companies that "touch the plant," to keep in the good graces of both law enforcement and their more conservative investors.

  • Despite the "record" sums, VC investment in marijuana remains relatively tiny — consider that individual tech companies have raised singular rounds larger than $1.3 billion.
  • Yes, some services brands would survive legalization, just as wine stores persist in areas where wine is sold in supermarkets. But many would disappear, and it's a prospect that could keep potential investors on the sidelines.

What we're hearing: "Investing for the short-term in specialized companies that become irrelevant after legalization has never made sense to me," says Brendan Kennedy, CEO of Tilray, the Canadian company that last year became the first cannabis firm listed on the NASDAQ. "I think these companies will eventually revert to zero."

The bottom line: VCs never needed to question marijuana's "product/market fit," as they typically do for tech startups, nor its efficacy, as they do for health-care startups. But now they need to question legalization, and what that would mean for the billions they've already invested.

Go deeper:

Go deeper

CCP releases two jailed Canadians after Huawei CFO deal with DOJ

Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty Images

Two Canadians imprisoned by the Chinese government for over 1,000 days have been released and are expected to arrive in Canada on Saturday, Prime Minister Justin Trudeau said Friday.

Why it matters: Their release comes hours after Huawei Technologies CFO Meng Wanzhou reached a deal with the U.S. Department of Justice that resolves the criminal charges against her and could pave the way for her to return to China.

Updated 17 hours ago - Politics & Policy

Arizona GOP's private recount of 2020 election confirms Biden's win

Contractors working on behalf of the GOP examine and recount 2020 ballots at Arizona Veterans Memorial Coliseum in Phoenix in May. Photo: Courtney Pedroza/Getty Images

In an odd coda to the 2020 election, private contractors conducting a GOP-commissioned recount in Arizona confirmed President Biden’s win in Maricopa County.

Why it matters: The unofficial, party-driven recount has been heavily covered on cable news as part of former President Trump's continued effort to sow doubt about the election result.

Del Rio bridge camp empty following Haitian migrant surge

A boy bathes himself in a jug of water inside a migrant camp at the U.S.-Mexico border on Sept. 21 in Del Rio, Texas. Photo: John Moore/Getty Images

The last migrants camping under the Del Rio International Bridge, which connects Texas and Mexico, departed on Friday, Homeland Security Secretary Alejandro Mayorkas announced during a White House press briefing.

Driving the news: Thousands of migrants, mostly from Haiti, had arrived to the makeshift camp after crossing the southern border seeking asylum. Roughly 1,800 migrants will now head to U.S. Customs and Border Protection processing centers.