Pot entrepreneurs in Houston looking for investors

About two dozen entrepreneurs in the legal marijuana trade came to west Houston Monday to pitch their products and services to local investors.

"We're all here for return on investment," said Tim Clark of Florida-based Modulux Lighting, which sells LED systems that he says boost yields while cutting electricity costs.

The head of another lighting company, Colorado-based BrightSpace, cited a university study showing $6 billion is spent annually growing indoor marijuana. Joseph DiMasi said electricity costs for indoor growing lighting and heat removal can make up a third of the final wholesale cost of a product.

Tony Alfiere, founder of Ripley's Formula, like many of those pitching their products today, also does not "touch" the plant. Ripley's makes a syrup that is sold to producers who bottle and sell cannabis-based drinks.

"We are the Coca-Cola of cannabis," he said.

Other presenters include Houston Amanda Gross, who plans to open a cultivation center in Los Angeles County, Calif., and a pair of Rice University-educated scientists who are starting a testing company.

Douglas Leighton, managing director of Massachusetts investment firm Dutchess Capital, which is underwriting the investors conference, told the Chronicle last month that the profit potential for those who get into the business early is enormous. He pegged the existing market for legal marijuana in the U.S. at $1.4 billion annually. The national black market, by comparison, is upward of $50 billion.

Dutchess Capital, founded in 1996, has invested in companies across the spectrum, from health care to homeland security. Leighton said managers began doing due diligence on the prospects for a fund to invest in marijuana-related businesses in November 2012, when a medical marijuana initiative passed in Massachusetts.

The firm made its first investment last summer and now has 11 companies in its portfolio. One produces edible marijuana products; another developed a social media website for cannabis enthusiasts. Others include a branding company, a consultancy that helps license applicants navigate the bureaucracy and a company that makes THC-infused personal lubricants for women.

With more medical marijuana votes coming up this year, a majority of states could soon allow some form of legal pot. Currently, 23 states do so. A majority of public opinion has already swung in favor of legalization, as a Gallup poll found last fall.

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Pot entrepreneurs in Houston looking for investors