Cannabis-focused hedge fund tackles great market growth potential

Cannabis is a growing market: its size in the US amounted to $6.7bn in 2015, and with the legalization of the commodity moving fast across the country, it is expected to reach $20bn by 2020. Very few fund managers have so far started investing in this market, but here is a brother-and-sister team that started looking into it as early as 2012.

Emily and Morgan Paxhia, who founded San Francisco-based Poseidon Asset Management in early 2014, talk to Opalesque about their cannabis-focused fund. Before Poseidon, Emily worked in product development for Fortune 500 companies for 15 years, and Morgan gathered more than 10 years of experience in the investment industry.

The US-domiciled fund's strategy is growth-oriented. It invests in fixed income and public and private equities, and has a strong focus on the technology basket.

Opalesque: Why a cannabis-focused fund? How did it all start?

Morgan Paxhia: What started this journey for us was, we unfortunately lost both of our parents to cancer years ago. They were against the war on drugs, and they were believers in cannabis, for personal use or for managing stress. They preferred that to alcohol, but when they had children, that went away.

But then when our father was in hospice care, a nurse asked if he would like to smoke some pot. She saw he was in a lot of pain. All the opioids were causing different issues; she was just trying to find a way to make her patient comfortable in those final days.

We were that young, and it was like this light bulb, or a moment in time that was very memorable, that went against everything that we were taught in school, the Nancy Reagan kind of thing that drugs are bad, pot will make you stupid and so on. We thought, w......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.