Question 1

What is the Vice-Adjacent Economy?

Accepted Answer

The Vice-Adjacent Economy refers to B2B companies that provide essential infrastructure and services to vice industries like gambling and cannabis, without directly participating in these sectors. These suppliers include payment processors, gaming software developers, and cannabis equipment manufacturers who profit from vice industries while avoiding direct regulatory scrutiny.

Question 2

What does picks and shovels strategy mean in investing?

Accepted Answer

The picks and shovels strategy involves investing in companies that supply essential tools and services to an industry rather than the end-product companies themselves. Named after California Gold Rush suppliers who made reliable profits selling mining equipment, this approach targets infrastructure providers who benefit regardless of which consumer brands succeed or fail.

Question 3

How do Vice-Adjacent Economy companies avoid regulatory risks?

Accepted Answer

Vice-Adjacent Economy companies operate with diversified business models, serving both vice industries and legitimate markets. For example, hydroponic equipment manufacturers serve legal agriculture alongside cannabis growers, while gaming software developers create products for both regulated casinos and social gaming platforms, providing stability and reducing compliance burdens.

Question 4

Should I invest in Vice-Adjacent Economy stocks?

Accepted Answer

Vice-Adjacent Economy investing offers exposure to high-growth vice markets while potentially avoiding direct regulatory and reputational risks of consumer-facing companies. These B2B suppliers often enjoy more predictable revenue streams and recurring business models, making them suitable for investors seeking growth without the volatility of direct vice investments.

Question 5

What are the risks of investing in Vice-Adjacent Economy companies?

Accepted Answer

Key risks include regulatory changes targeting entire ecosystems, economic downturns affecting discretionary spending on gambling and cannabis, competition from larger technology companies, and potential market saturation as legalization reaches maturity. These companies must continuously innovate to maintain competitive positions despite their defensive positioning.

Question 6

Top Vice-Adjacent Economy companies to invest in?

Accepted Answer

Leading companies include Everi Holdings (EVRI), which provides casino backbone technology and payment processing; International Game Technology (IGT), supplying gaming machines and lottery systems; and WM Technology (MAPS), operating cannabis marketplace and compliance software. These companies profit from essential infrastructure without direct vice industry exposure.

Question 7

How does Vice-Adjacent Economy benefit from cannabis legalization?

Accepted Answer

Each new state or country legalizing cannabis creates expanding markets for infrastructure providers like equipment manufacturers and compliance software companies. WM Technology exemplifies this, automatically expanding its software services to fresh markets as legalization spreads, profiting from the entire cannabis ecosystem without touching the plant itself.

Question 8

Why are Vice-Adjacent Economy stocks growing now?

Accepted Answer

Growth drivers include ongoing legalization of gambling and cannabis in new jurisdictions, digital transformation requiring specialized technology services, and industry consolidation favoring established suppliers. The shift toward online platforms increases demand for payment processing, fraud detection, and customer management systems that these companies provide.

Question 9

What makes Vice-Adjacent Economy companies defensive investments?

Accepted Answer

These companies often enjoy recurring revenue models and high switching costs, creating defensive moats. Once casinos integrate payment systems or cannabis growers invest in specific equipment, changing providers becomes expensive and disruptive. They also benefit from diversified customer bases across multiple industries beyond just vice sectors.

Question 10

How to invest in Vice-Adjacent Economy with small amounts?

Accepted Answer

The Vice-Adjacent Economy theme is available on Nemo, the ADGM-regulated platform offering commission-free investing and fractional shares starting from just $1. This makes theme-based investing accessible to beginners who want exposure to infrastructure companies powering vice industries without requiring large capital commitments.

The Picks and Shovels Play: Profiting from Vice Without the Baggage

The Picks and Shovels Play: Profiting from Vice Without the Baggage

The Unseen Profits in Vice Industries

Why Bother With the Boring Stuff?

The Unseen Profits in Vice Industries

Why Bother With the Boring Stuff?

The Modern Moat is Made of Code

A Necessary Word of Caution

Deep Dive

Key Companies

Primary Risk Factors

Growth Catalysts

How to invest in this opportunity

Frequently Asked Questions

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