CANNAINVESTOR Magazine October / November 2016 - Page 28


Public awareness/acceptance, education, legalization, and strong quality control standards over time will grow the legal market. Continued medical announcements confirming the successful application of Cannabis in the treatment across an array of medical conditions and diseases will also lead to continued medical research and use as well as public acceptance.

As reported in August by Medical Marijuana Inc, the legal Cannabis industry employed at that time up to 150,000 Americans - real Americans performing real work in real jobs and growing the American economy. There is also both downstream and upstream economic stimulation as there are equipment and technology requirements as well as retail distribution needs whether in stores or online.

Scott Greiper, president of Viridian Capital Advisors, in an article published in September referred to:

“the ways in which the impending expansion of legal marijuana is poised to bring about what he believes will be the next Industrial Revolution … very likely will create substantial economic growth in a number of ancillary sectors, including agriculture, biotech, real estate, software, investment, consulting, and security … Not only is cannabis poised to stimulate the national economy, it is also about to make a lot of individuals a lot of money. The time to invest in cannabis is now”.

The full article, that I encourage all to read, is titled “Cannabis Companies Are Attracting Marijuana Investors with a Lot of Green” as it details why shares of some publicly traded companies are selling low and how this is healthy because it, in part, represents a “thinning out” of poorly managed businesses.

Marijuana remains as a Schedule I drug; however, the DEA relaxed the rules surrounding who can apply for funding for medical research using cannabis. That is important because the reason given by the DEA for leaving marijuana as a Schedule I drug was owing to a lack of research that showed a lack of any meaningful medical use for cannabis. Concurrent with the DEA ruling, the U.S. Court of Appeals for the 9th District ruled that the Judiciary branch cannot prosecute any person or business who uses or handles cannabis in compliance with the laws and regulations of the State where they reside. If charges cannot be laid against such businesses, how long before there is a decision that such businesses cannot be discriminated against by other government agencies (ie: with respect to banking privileges and equal tax treatment)?

As for “invest at your own risk” - what Nic Easley actually wrote, in proper context, was that the legal cannabis industry shares the same pitfalls of any new industry amplified by the legality minefield surrounding cannabis. Many companies will fail, there will be M&A activity, and there will always be those companies that are overvalued. But these grains of truth are not applicable to the overall industry itself because this is the likely end of prohibition of a multi billion-dollar black market. There is no new economy! It is the Ecoforming of an existing economy. The June issue of CANNAINVESTOR Magazine referenced the “Consolidation Curve” which explains much of the failed businesses as a part of the natural progress of any new industry.

The key now is how to identify those companies that are ideal for investment.