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Marijuana Machine Maker’s Stock Price Goes Up in Smoke

• November 19, 2012 • 10:30 AM

It sure seems like investors in the burgeoning quasi-legal marijuana industry are enthusiastic consumers of the product, too. How else to explain the fact that share prices for Medbox, makers of what amounts to a medical-marijuana vending machine, shot up 3,000 per cent last week, briefly sending the company’s market capitalization from $45 million to $2.3 billion? OK, Medbox got a nice endorsement from the Wall Street Journal in a fascinating/hilarious piece on companies that stand to profit from the growing acceptance of weed, but still. Anyway, the greed-high seems to be wearing off, since the company’s share price is now hovering around $30, down from a peak of $215 last week.

The WSJ article is paywall-protected, but you can get a PDF on Medbox’s site. With 18 states now allowing marijuana for medical reasons and Washington and Colorado having just dropped the fig leaf and legalized straight-up recreational use, analysts figure the industry is worth at least $1.7 billion. That includes outfits that test buds for mold or other contaminants, vaporizer makers and manufacturers of THC-infused chocolate truffles. Venture capitalists and stoners – together at last.

Vince Beiser
Vince Beiser is an award-winning journalist based in Los Angeles, California. Follow him on Twitter @vincelb.

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