Edit ModuleShow Tags

Will Weed Smoke Out Restaurants?

New investment trends are creating challenges for local restaurateurs — for now


Published:

Photo: Shutterstock

Every week, I speak with restaurateurs about the issues facing the industry. The price of cauliflower is going up thanks to the vegetarian/vegan trend of cauliflower rice. Avocados are also spiking because avocado toast is the new fidget spinner for mouths. And many are questioning the sustainability of the new poke restaurant trend (when we’re serving huge chunks of tuna in a bowl, it begs to ask how much tuna is left in the sea).

But one of the more interesting things I came across this week was a conversation with a local food operator who was trying to raise money for a new project. He’d been pitching numerous investors and time and time again he ran up against the same obstacle: weed.

Weed is the next Silicon Valley. A big leaf of it was recently on the cover of Forbes magazine. Investor money across America is being diverted from every industry into cannabis. There are currently seven states (California being one) where both recreational and medicinal marijuana has been legalized. And that number will tumble into the dozens very soon. Moral struggles being what they are, states need the gigantic money recreational cannabis has brought to places like Colorado. Weed will one day fix the potholes on your street.

For an example of how mainstream it’s become, PayPal founder Peter Thiel is investing tons of money into Privateer Holdings, which paid bunches of millions for the rights to Marley Natural weed.

Anyway, how does this affect San Diego restaurants? Because traditional funding streams (i.e. banks) aren’t usually available to restaurants. The industry has notoriously small profit margins, and banks only hand money to those with hugely proven track records. The best way to make a banker to laugh is to ask him or her to fund your gastropub.

So restaurateurs have long depended on private investors. “And now those investors are putting everything into weed,” said my source. “We talked with dozens of investors who used to put money into the restaurant industry, and almost every one of them mentioned cannabis as a reason they either wouldn’t invest, or why they were hesitant. It’ll be interesting to see how that affects funding for new restaurants in the near future in San Diego.”

The silver lining is: Once weed is fully funded and immersed in California’s culture, one of the primary recreational activities for its supporters is eating. So maybe it’s a short-term fallout for restaurants. An investment in weed just may be an investment in increased hunger and restaurant sales.

Edit ModuleShow Tags

More »Related Stories

I Can’t Read Your Menu

Your mood lighting and small font are making my bad eyes worse

San Diego Happy Half Hour Podcast: Episode 112

Hundred Proof gets a cocktail revamp, Indian food is headed to South Park, and Lola55 owner Frank Vizcarra drops in

El Carrito in Barrio Logan Preserves a Little History

As gentrification dawns in San Diego’s heart of Latino culture, these locals heat up some breakfast nachos
Edit ModuleShow Tags
Edit Module

Subscribe to the Blog

 
Edit ModuleShow Tags


SD Food News

The hottest thing in San Diego food right now just might be Tijuana.

About This Blog

Restaurant reviews, food trends, top cocktails, wine, beer and generally the best eats and drinks in San Diego, by Food Editor and general good guy Troy Johnson.

Recent Posts

Edit ModuleShow Tags
Edit ModuleShow Tags

Sponsored

Ten Pet Friendly Palm Springs Restaurants

Ten Pet Friendly Palm Springs Restaurants

AquaVie: 10 Reasons It’s Downtown’s Best Kept Secret

The best workout and spa getaway around? It’s actually right underneath your nose.
Edit Module
Edit ModuleShow Tags