CANNAINVESTOR Magazine November / December 2016 - Page 120

Jeffrey Friedland is an emerging market pioneer -- his firm, Friedland Global Capital, was one of the first American investment banks to establish a presence in China -- and is now on the front lines of the cannabis industry. In his book, Marijuana, the World's Most Misunderstood Plant, Mr. Friedland dives into the world of marijuana, discussing what we know and what we still hope to discover.

Mr. Friedland was an owner of two retail marijuana stores in Colorado which were located in the mountain resort towns of Breckenridge and Crested Butte, and a marijuana cultivation facility south of Steamboat Springs, which were featured in CNN's eight-part, 2015 reality series, High Profits.

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In Colorado it’s common to see specials advertised or receive emails offering marijuana flower at $100 per ounce. It is highly unlikely that growers, dispensaries or retail stores can operate profitably with marijuana selling at these historically low prices.

While budtenders seek to upsell their Colorado customers to their “top shelf,” silver, gold or platinum flower, flower in Colorado is increasingly becoming a commodity. The low price of flower has motivated many growers, processors, and retailers to develop higher margins product, including concentrates, prerolls, tinctures and edibles as a way to survive.

Conclusion

The potential for the recreational marijuana industry in California, Maine, Massachusetts, and Nevada growing into a huge industry is a given. It would be prudent for marijuana entrepreneurs and investors to study and learn what has worked and more importantly, not worked in Colorado. There are fortunes to be made, but based on my view and experiences, there are greater fortunes that will likely be lost.