By Zack Laubernds,
Money and Investing Writer
Tom Bollich, co-founder of Zynga (NASDAQ: ZNGA), says he “enjoys new industries.”
That was pretty clear in 2007 when he and group of programmers and investors started Zynga. Games like “Farmville” and “Words with Friends” took the online gaming world by storm.
Bollich left Zynga in 2009, but he’s already found a new “new industry” to jump into.
Marijuana. Bollich is now the CEO of Colorado-based Surna, a company that manufactures equipment for the legal cannabis industry.
Surna’s website reads “Bringing Disruptive Technology to the Cannabis Industry.”
Eventually Bollich wants to create software that would allow for growers to monitor their crop via smart phone, but for now they’re just sticking with cooling and lighting systems.
Before Surna looks to expand any further it has to wait for the market to do so.
As of right now Colorado and Washington are the only states that allow the legal use of marijuana, but in the mid-term election at the beginning of the month Alaska, Oregon and Washington D.C. all voted to legalize marijuana as well.
Marijuana will not be for sale in these regions until 2016 though. Bollich says the gradual adoption is a good thing though, he said “That way it’s more manageable.
Each state has to build up its infrastructure from the ground up, which for us is quite good” California, Massachusetts, Maine and Nevada are the next possibilities for this growing.
These states could see a marijuana legalization proposal on the ballot in 2016. Although the legalization movement has gained some ground in the past few years, investments in commercial marijuana companies comes with a lot of risks.
Most of these companies, if publicly traded, are done so on scarcely-regulated and very unpredictable, over-the-counter markets through penny stocks.
For reference in Surna’s stock was trading for about $6 in April, today it’s only trading for about 50 cents.
Investors are still very interested in the “cannabusiness” as they call it. Bollich said, “It does remind me a little bit of Zynga. We had a company that was built on someone else’s platform.
We were beholden to Facebook (NASDAQ: FB) or MySpace or whatever platform we were on.
Now we are at the mercy of the whims of politicians and voters.” Surna isn’t going to wait for other states to grow its operations though.
They are actively seeking new acquisitions that could give the company a larger market share in this growing industry.
The legal marijuana business is expected to be a $10 billion a year industry within the next 5 years.
Right now, Surna is believed to own about 10 percent of the build-up market for commercial growers, but Bollich believes that they could grab as much as 30 percent. That would potentially make Surna a $3 billion a year company.
That’s a big difference from Bollich’s previous company, Zynga, who has recorded huge losses in the previous months.
Maybe marijuana is the cash crop of the future. Only time will tell if this growing industry flourishes, or just goes up in smoke.
A version of this article appeared in the Tuesday, November 18th print edition.
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