Cannabis Sector Public Companies

at 2015.04.30
With 0 Comments

What brings some of the biggest names in canna-centric digital media, private equity and entrepreneurship together? The first inaugural Marijuana Investor Summit. Take a look:

TRTC-SRNA-HLSPY-MJMD-MJIS-marijuana-investor-summit-denver-colorado-2015From left to right: Chris Walker General Manager USA at Heliospectra AB; Spike Humer, Chairman at MediJane Holdings; Trent Woloveck, CEO of American Cannabis Company Inc; Tae Darnell, General Council at Surna; Derek Peterson, CEO of Terra Tech; Moderator Alan Hawkins.

Sentiment was full of entrepreneurial optimism mixed with a dash of caution surrounding the largely undefined landscape of the cannabis industry at this years Marijuana Investor Summit in Denver.

The three day event brought professionals, investors, entrepreneurs and media from across the US to network and learn about opportunities and market conditions in the burgeoning cannabis sector.

The list of speakers and panelists was comprised of movers and shakers in the field who were well received by curious and engaged audiences.

In part one of a three part series on the Marijuana Investor Summit we’ll look at publicly traded companies and the landscape for those operating and investing in the space.

Public Market C-Suite (Photo above)A panel discussion with executives from several publicly traded companies in the cannabis sector yielded insight and themes in three major areas.

1. Responsibility. The cannabis sector has an opportunity to establish a positive reputation by establishing a track record of socially responsible practices and good business.

Responsibility also falls on investors to conduct thorough due diligence into companies when deciding to invest as, is the case with any market, there are companies in the cannabis sector who may be trying to make a quick buck from investors eager to enter the space.

alan-brochstein-cfa-marijuana-investor-summit-denver-colorado-2015Alan Brochstein, CFA, of 420 Investor speaking at the Marijuana Investor Summit.

2. “Touching the Plant” v Ancillary Services: Throughout the conference a resounding distinction was made between business that “touch the plant” versus those that do not. Touching the plant means growing, processing or selling cannabis flowers and/or products.

Examples of businesses that are involved in the cannabis space but do not touch the plant include technology companies, consulting services or software development.

Publicly traded companies that touch the plant operate in a gray area because they are breaking federal law and are regulated by a federal agency, the SEC. The SEC has halted stocks of some widely traded companies that touch the plant which has made investors weary about putting money into these businesses.

3. Reputation Risk: Perhaps one of the most exciting aspects of the summit, professionals in this sector have fully embraced cannabis. Despite having taken the plunge, reputation risk, and management, were reoccurring themes throughout the conference.

When asked about the reputation risk from being involved in this business, panelists and speakers often countered with sociological data from recent Colorado studies, the number of people, and expense, of incarceration in the US from non-violent marijuana related crimes.

Here’s some of the data: Since implementation Colorado has had a 5% drop in teen marijuana use, a 25% drop in availability of drugs on school grounds, commercial real estate occupancy went from 75% to 97% occupancy, and there was large drop in crime. The positive impact of legalized cannabis is difficult to ignore.

Further, the US accounts for roughly  5% of the world’s population and has 25% of the world’s incarcerated population. Approximately ½ of those incarcerations are for non-violent marijuana related crimes.

 

Leave a Reply

Your email address will not be published. Required fields are marked *