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,

Greg Miller
Executive Director, National Institute for Cannabis Investors


Comments

24 responses to “Q&A: How Do You Sell Private Shares?”

  1. on IIPR as of close yesterday 3/22/19, I’m up 131.80% and still holding on while at the same time keeping a stop loss in place which is raised when IIPR goes up to protect profits.

  2. A followup to the above question about selling shares.
    Who currently holds the actual paper shares if we made a private purchase?

  3. Greg,
    I am a new member of Cannabis IPO Insider. I have 2 concerning questions: 1.) I invest in private placements, before the IPO is released, all of which have a 4-6 month hold on them, which I understand, by being a member of CIPOI, and buying the IPO is there a hold time associated with the stock before you can sell or can you sell at your own discretion with no hold time? The second question is that I am a private placement owner of TGOD which has a legend restriction on it. I have found out that I need to open up an account in a Canadian Brokerage House in order to sell this stock. Do your IPO’s have legends on them which I find to be a problem? Can the brokerage house recommendations that you have given have the ability to remove legends and sell the stocks, either Canadian or US?
    Thank you for answering these important questions that I have.
    Willie S.

    • In most cases there is a holding period. It’s usually 6 months. Great to get in before going public however there are certain risks involved because of the hold period. Stressful waiting 6 months praying the stock does not lose value. As for ipos. Once out you are free to buy and sell as you wish.

  4. Thanks for the informations you share here.

    My question or concern is this, how can we know the firm that are going IPO?

    Am new in this, will appreciate more detailed information on the IPO’s.

  5. I don’t always have the opportunity to buy shares you recommend at a certain price right away. When I do get into it (usually a day or so later) I find that the price per share has increased and then I don’t know what to do. Can you give some guidance on why you recommend a specific price and is it too late to buy in if the share price has increased?

    Margo

  6. I joined NICI several weeks ago, but haven’t yet had the time to do anything.. I now have a little time, and some funding, so who do I call to get started NOW?

  7. Been a member for a while and now how do I start and invest? what do I need to do first? How much money do you start with and etc.

  8. I’m in the same boat. I’m an Elite member, read lots of info but not sure if I should go with someone like fidelity, or place buying shares on Robinhood. Fidelity is 6.95 per Sher bought if I. Reading info correctly. That would really add up before I even see if I’m not going to care, or be really short in this adventure. So any additional information folks have is wonderful. Thinking of joining IPOs, but that’s a chunk of change… Ugh

    • The 6.95 I believe is per order of a stock. If you want 1 or 5000 shares in your order of a stock. say the stock you are purchasing cost $1 and you buy 100 shares your cost is 106.95 gor those 100 shares. When you sale your shares if at one time your cost is again 6.95. So to make a profit you want to have more than $14 increase. Most online accounts show plus or minus gains.

    • Stay away from Robinhood. They don’t list most companies or ETFs in the cannabis market, not to mention their fees are ridiculous. Fidelity is very much like larger brokerages that have online trading anymore, and the trade fee is per trade not per share. The $6.95 you mentioned is a per trade fee, unless you try to buy an “International” or “Global” stock ( there are higher fees for those), so regardless of how many shares you buy the fee is $6.95. You just need to take into account that fee when trying to determine how many shares of what stock to buy. 10 shares of a penny stock will have to have tremendous gains to pay for the fee, however 1000 shares of that same stock would only need a small gain to profit. I’ve had some gains, some losses, and a few break evens in this game so far, regardless don’t buy what you can’t afford to lose completely, diversify, be patient after a purchase, and most of all have fun with it.

  9. My trades on Fidelity are only costing me $4.95. After looking at most of the brokerages I found them to be the best all around one to use. Remember alot of these stocks are sold on foreign exchanges so you will need access to them. Fidelity will do the currency exchange for you and settle your account in US Dollars

  10. So if I’m understanding this correctly we put the $$ we want to invest into a Canadian acct? Then it sits for up to 6 months before we can buy in on a IPO?
    Very confused and need guidance

  11. Thanks so much for all your help gang! Cleared up alot although would like to know the answer to Scott H. question. Never thought about that tidbit

  12. How do I set up a trading account and which brokerage companies do you recommend? Also, how do I know when it’s a good time to sell to maximize my profits and still stay in the game at the time. What percentage of the profits would I want to leave in to continue growing?

  13. Thankful your dating documents now. No problem for awhile, but sooooo much info now it is harder to keep it arranged in by mind. I wanted to ask you to do this, however, I thought you would not for personal reasons of re-presenting to new members. This is a big step in the right direction to raise my faith in you. Thanking you in advance of dates on documents, Ronald and Sharon Love Dunlap
    Elite Members

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