Investors reporting they haven’t felt this excited about investing since the early days of dot-com investing.
In March, California investors in Silicon Valley met up at the Institutional Capital and Cannabis Conference in San Jose, California. They convened at this event put on by MedMen, a Cannabis investment company, to stir up buzz for an industry that hasn’t seen this much excitement (and risk) since the dot-com era. A sold out event, much chatter at the conference was focused on the uncertainty of the new administration’s opinion of the industry, as well as risk management for those who are new to investing in marijuana businesses.
The general take-away from the conference is that legalization will occur eventually, it just may take a few more years to get there, so in the meantime, “business as usual.” However, this business is anything but usual. Insisting on being viewed as a unique business- not to be compared to the micro-brew or tech boom, the cannabis industry does bring unique challenges to those wishing to invest, or have their clients invest.
“It’s a unique industry that is transitioning from a black market business to a white market business,” said Chris Leavy, a General Partner at MedMen.
California recently passed a law making marijuana legal for adult recreational use to begin in early 2018. This has initiated a spark of interest in investors in the state, considering California will actually harbor 40% of the industry within its state lines. If watching Denver’s economic story since legalization is any indication of how California will fare, it appears the alcohol industry may take a hit due to customers replacing alcohol for marijuana products. Due to this development, those in the alcohol industry have chosen to educate themselves on the cannabis industry, even if they are choosing to stay out of it.
The conference also held discussions on real estate, repurposing old buildings for cannabis businesses, and the challenges that landlords may face should the tenants run into any problems.