Cannabis, sex tech and psychedelic startups deserve more than stigma

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Cannabis, sex tech, and psychedelics are often lumped into the category of “vice,” a characteristic that keeps many venture capitalists from investing in these areas. But does it make sense? Let’s explore. — Anna

It’s (not) a sin

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Isn’t hemp really like coffee, wine, and spirits? This is the argument Emily Paxia made on the Twitter Space hosted by TechCrunch+ earlier this week to discuss our latest U.S. cannabis investor survey.

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Pakshia, managing director of cannabis hedge fund Poseidon Asset Management, says marijuana-derived products have more to do with health than the “sin” category they often fall under.

“Sin clause” and “vice clause” are terms that venture capitalists use to refer to their inability to invest in certain categories of business, from pornography and gambling to alcohol and tobacco. When I researched fundraising strategies for sex tech startups I learned earlier this year that this veto power usually comes from the fund’s limited partners or LPs.

It’s understandable why investors don’t want to invest their money in certain types of businesses, let alone be known for it. But there is a fine line between morality and stigma.

“I don’t identify with the word vice at all,” Andrea Barrica told me. Barrika is the founder of O.School, which she describes as a sexual health media platform. The term “wellness” is popular in both the sex tech industry and the cannabis industry because it certainly makes them more attractive, and also because it really captures the kind of impact entrepreneurs are hoping for.

It’s worth bearing in mind that cannabis provides more than just a recreational high. In Europe we heard from investors, it is the medical cannabis that has most of the momentum. It is the prospect of health benefits that drives many entrepreneurs who deserve more than cheap laughter.

Similarly, deep diving into psychedelics has taught me that there is so much more to psychedelics than drugs and fun. As investors sometimes enter the space after personal travels with depression or burnout, and as founders hope to influence a global mental health crisis, simple jokes quickly seem out of place.


The vice clause only applies to certain types of investors, which is also problematic. The fund that handles your pension can transfer cannabis investments, but many family offices don’t. This means that the income from these potentially lucrative bets will be concentrated in the hands of already wealthy people.

According to Paxia, some fund managers also invest as individuals, and they will be the ones to profit. Meanwhile, fiduciaries are missing out on profits and the impact they could have had for arbitrary reasons. After all, what is legal is not always moral, and vice versa.

The most glaring paradox is that the tobacco, nicotine and alcohol industries are actually keep a close eye on cannabis and whether consumption may change. Will this shift have negative consequences for society? Probably no. With regard to psychedelics, there is ongoing research into the use of non-hallucinogenic derivatives. for the treatment of opioid dependence. With deaths from fentanyl and methamphetamine overdoses US growthis it a vice? I do not think so. You?

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