Why weed tech is missing from CES 2018, even as the budding industry booms

vapium
Vapium

As marijuana legalization sweeps through North America and governments relax their rules on cannabis, the technologies used to grow, distribute, and consume it represent an increasingly large chunk of the consumer electronics industry.

In other words, weed tech is big business.

Over the past few years, investors have poured hundreds of millions of dollars into weed-related startups, resulting in a corresponding flood of weed gadgets aimed at medical and recreational users. Between all the vaporizers, oil pens, dab rigs, automatic grinders, butter makers, and other miscellaneous ganja gizmos; there’s no shortage of weed tech on the market right now.

But oddly enough, you’ll find almost none of it on the CES showfloor. Despite the fact that cannabis is one of hottest spaces in consumer tech right now, it’s practically nonexistent at the world’s largest consumer technology trade show. What gives?

Don’t blame the CTA

Surprisingly, this actually has nothing to do with rules and regulations.

“Recreational and medical use of marijuana are completely legal in Nevada”

The Consumer Technology Association (the organization that runs CES) has no rules on the books that prevent or discourage companies from exhibiting marijuana-related products at the show. In fact, weed-tech startups have held booths on the show floor numerous times in the past (although not in great numbers), and there’s even one this year. Buried deep inside the “Smart Home” section of the show, you’ll find a startup called Vapium Medical, which makes a metered dosing device for medical cannabis users, as well as an app that lets them keep track of their use. So weed tech companies definitely aren’t being barred by the CTA.

You can’t blame state or local marijuana laws, either. Recreational and medical use of marijuana are completely legal in Nevada, and while the state does have a few restrictions on where and how cannabis consumption devices can be sold, there are no regulations that prevent weed-tech startups from peddling their wares at trade shows. As with gambling and strip clubs, Las Vegas has a fairly laissez-faire approach to regulating trade shows that visit the city — presumably because every convention attendee is another person who will spend money at hotels, restaurants, and casinos.

What’s going on?

So if the cannabis tech sector is booming, and there are no rules or laws barring weed startups from attending CES, then why on Earth isn’t the show floor littered with pot-leaf logos and vaporizer startups? There are entire sections of the LVCC dedicated to things like “baby tech,” “sleep tech,” and even “smart cities,” so clearly there’s room for fringe tech at this convention. So where’s all the weed at?

To get an answer, we spoke with a handful of cannabis tech startups — including some that deliberately skipped the show; some that are here in Las Vegas, but don’t have booth space; and also the only one that’s actually exhibiting at the show this year.

Hazy answers

Broadly speaking, the consensus seems to be that cannabis tech just isn’t quite mainstream enough for CES.

“CES is a very mass-market trade show,” says Richard Huang, CEO of Cloudius9. Huang and his company don’t have a formal presence at the show (no booth), but he’s in Vegas to do business nonetheless.

“The buyers are all very mainstream merchants, and frankly the [marijuana] industry isn’t there yet.”

“It’s catered toward the entire electronics market,” he explains. “The buyers are all very mainstream merchants, and frankly the [marijuana] industry isn’t there yet. And it goes both ways. Generally, the big buyers [at CES] aren’t there to purchase, and eventually carry, any product related to the weed industry. So as a potential exhibitor, if you can’t find people who are interested in your product, it’s hard to justify going out and spending the marketing money on attending the show.”

Other weed-tech startups seemed to echo this sentiment. Chris Whitener, Executive Director of Magical Butter (a device for making your own weed butter) says that, “If you’re not a large-scale company that can afford the cost of having a full force on the tradeshow floor, it’s smarter to send a few scouts to Vegas so they can meet people and network and do business, but without buying exhibit space.”

This was a common theme. Most of the small handful of marijuana startups at CES this year aren’t running booths. They’ve deliberately opted out of getting formal exhibit space, and have instead chosen to do business on the periphery of the show — which is a fitting metaphor for how cannabis tech as a whole fits into the larger consumer technology industry. It’s here, but despite blistering growth and projected profits, weed tech isn’t ready for center stage. You and your friends might be into it, but won’t find vaporizers at Best Buy or Target anytime soon, and that’s presumably why CES isn’t the best venue for weed tech vendors to promote their products.

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Even Vapium Medical, the only marijuana-related startup on the showfloor this year, seemed to underscore that it only made sense to attend CES because Vapium’s product is targeted at the medical cannabis community — a broader market with more potential buyers.

“Our product is a technology solution for medical users,” said Vapium COO Barry Fogarty. “It’s going to be available in every state in the United States where medical use of cannabis is legal, so it’s very much consistent with and in sync with the legal situation in the US. This is not a product that’s intended for recreational use. It’s specifically for medical users, and people in the medical community — so not just patients, but physicians and researchers as well.”

More time under the grow lamps

Weed tech will eventually have a big presence at CES, but before that happens, the cannabis industry needs to mature a bit.

First and foremost, legalization needs to happen on a broader scale. This is happening slowly across the U.S. right now, but until the majority of the world is OK with recreational pot use, weed tech simply won’t have a large enough consumer base. It just doesn’t make sense to hawk a product at CES if you can only sell it to customers in eight states.

Furthermore, society’s attitudes toward marijuana need to relax somewhat. Even after it’s legalized, pot consumption needs to be normalized so that marijuana-related products are no longer taboo to use or sell. When we reach that point, weed tech will likely be mainstream enough for CES — but unfortunately we’re not quite there yet.

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