US: Mainstream investors warming up to pot

Marijuana sales in the U.S. are poised to surpass coffee by the end of this decade. Americans already consume $7 billion worth of legal marijuana in 25 states where medical and recreational use are permitted. By 2020, that number is expected to reach $23 billion. The number could be much higher if voters in California, Nevada, Arizona, Massachusetts and Maine approve recreational marijuana this November.

"The Green Rush" is attracting investors from all walks of life, and there is no shortage of marijuana "experts" peddling ventures and cashing in on the trend. But Adam Bierman, co-founder and CEO of Los Angeles-based MedMen, warns that those rushing in without the correct expertise may be in for a rude awakening.

"This is still a federally banned substance that is regulated by a mind-boggling patchwork of local and state regulations," Mr. Bierman said. "Expert knowledge will be the difference between big losses and outsize returns. There is tremendous opportunity for investors with the right expertise to take advantage of the end of prohibition."

MedMen combines capital and years of experience running cannabis operations in several states. Its management company has helped more than 100 cannabis-related companies thrive, and the firm launched the industry's first $100 million private equity fund this summer.

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