This week, Executive Director Greg Miller answers member questions about portfolio inclusions, website features, and the sale private investments.
Welcome to another edition of our Cannabis Profits Daily Q&A.
We had an exciting week, starting with my suggestion that you consider taking some profits on Innovative Industrial Properties (NYSE: IIPR). Whether you were able to follow along since we first talked about IIPR or bought in after that, I hope you’ll write in to let us know if you were able to take any gains and how you plan on using them.
Or if you decided to stay in your position, we want to know that, too! We love hearing how the National Institute for Cannabis Investors is helping you.
And, of course, we want to continue helping you in every way we can. With that in mind, let’s dive into this week’s questions!
Ken S. says: “I love all the information NICI provides to its members, there are so many things to take into consideration that it becomes confusing. Is it old news, current news, it becomes difficult to digest. I agree with others that it would be so helpful if all the articles were dated.”
Thanks for the comment, Ken. A few months ago, we noticed we were receiving a number of requests to date all of our stories. We immediately understood how useful an update this would be for our members, so the NICI team got started adding those dates right away. Today, you should be able to find the date a story was published at the top of each piece, right above the picture of yours truly, just as you can see in this image to the right.
We’re always looking for ways to improve the website and your experience with it. We’re coming up on six months since we launched the Institute after the American Cannabis Summit, and in that time we’ve learned a lot about what our readers like to see and how they like to see it. We hope to roll out some more changes very soon. But we always appreciate your feedback, so please let us know in the comments if you have any suggestions!
Frank W. asks: “[For Cannabis Venture Syndicate], if this is a private sale, you won’t be going through a brokerage account, right? I assume the company keeps your shares on file. How do you sell them if you want to but they don’t have to buy them back and just keep selling to new investors? Thanks.”
You’re quite right, Frank. Private investing can create vast fortunes, but you give up instant liquidity as part of the deal. When you buy shares in a private company, you own them and you are committed to own them for a while. Sometimes limited private “markets” exist for some deals, like Uber, but more commonly, an investor must commit to owning the shares until one of three things happen.
The first is that the company sells itself. Then you, as an investor, are entitled to your share of whatever profits the company takes in that sale. Second, very occasionally a company will offer to buy back some of its private shares. It might do this to offer shares to employees without diluting the total share count, for example. And third, the company can go public. When a company goes public, you, as a private investor, typically agree not to sell your shares for another six months or so after the public offering. But after that “lockup period” has passed, you can have the company deliver your shares to your normal stockbroker and sell them just like any other public stock.
Richard M. wants to know: “Greg are you recommending SVBI as a BUY for NICI Investors? I don’t see it listed in the portfolio.”
Great question, Richard. From time to time, I recommend companies that aren’t included in our regular portfolios. There are certain situations – as with Severn Bancorp. (Nasdaq: SVBI) and Innovative Industrial Properties – when I feel a company is such a great opportunity that I want to share it with all of our members. These are often companies that do not fit perfectly with the nature of any single portfolio, and – because of that – they won’t be tracked in the same way as our other picks.
I do still like to check in with these stocks, though, as I did recently with Innovative Industrial and will soon do so with Constellation Brands (NYSE: STZ) after it announces its earnings early in April. Always remember that I can make a recommendation that goes into the portfolio or which does not, but I don’t offer individualized financial advice. It’s up to you to decide which stocks to buy and how many shares you want to buy.
Again, be sure to let us know what you plan on doing with any earnings you took on Innovative Industrial!
As always, I hope you’ll keep writing in with your questions and comments.
Thank you for being an important part of the National Institute for Cannabis Investors,
Executive Director, National Institute for Cannabis Investors
24 responses to “Q&A: How Do You Sell Private Shares?”
March 23 2019