Even though it’s a popular cannabis destination, Colorado has not been friendly to out-of-state entrepreneurs. That all could change…

Colorado is known for being a pot-friendly state, but it hasn’t been so kind to investors.

A lot of publicly traded companies and venture capital firms couldn’t participate in this market, and things were so bad that publicly traded companies weren’t even allowed to hold a Colorado marijuana license.

Overall, this means many cannabis companies and investment firms have been on the outside looking in at the Colorado market, which generated $1.5 billion in sales in 2018.

“What we’re seeing now is states like California, Florida, Massachusetts bring in capital to get ahead of us in infrastructure, R&D, new-product development,” Dean Heizer, executive director and chief legal strategist for LivWell Enlightened Health, said in a statement.

The purpose of the restrictions was to help vet new investments and new businesses trying to enter the state, but it came at a big price. Some cannabis companies decided to just leave instead of dealing with all these issues.

However, thanks to a new bill, that’s all going to change.

And with easier access to this already thriving cannabis market, it’s going to bring about some important and profitable changes…

The Colorado Cannabis Scene Is Evolving

Thanks to the recently passed bill, the current limit to the number of out-of-state owners of 15 people will be repealed. Also, publicly traded companies will no longer be prohibited from holding a Colorado marijuana license.

Already, cannabis CEOs are very excited.

“We now have the momentum behind us to accelerate the closing of our two acquisitions, MedPharm Holdings and Medicine Man Denver,” Medicine Man Technologies (OTC: MDCL) CEO Andy Williams said in a statement.

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This is also exciting news for what this means for cannabis investing moving forward.

With more access to more investors, out-of-state firms that have been eyeing Colorado but have been unable to receive a license can finally expand their footprint. It will also allow firms increase the number of dispensaries they operate, and it will help create national brands.

As we’ve talked about before, the companies that are going to be the Microsoft of cannabis need a footprint everywhere and need to create a national identify with their products.

This is also going to help companies that want to go public.

Raising More Capital

Obviously, the biggest investment firms and hedge funds have more than 15 people. That means, up until now, they couldn’t get into the market. For them, that means they make less money.

For cannabis entrepreneurs, it meant they may not have been able to grow their business as fast as they want, create jobs and hire as many people as they want, and weren’t able to reach as many customers as they may have wanted.

They simply were limited in raising money to do all of those things.

This new bill could change all of that, and it can have a big ripple effect for Colorado cannabis firms. Companies raise money through IPOs, but hedge funds and big investors normally need to fund a company to help it reach a certain size, reach certain goals, have a certain footprint, and generate a certain amount of sales before it goes public.

If a company is still too small and tries to go public or isn’t ready, it could be a flop.

However, if it is funded properly, it could lead to a massively successful public offering.

With Colorado, I also want to mention that politicians in the state are looking at bills that would allow marijuana deliveries and tasting rooms.

Coming soon, I’ll have a report out about a different state that just approved cannabis lounges. Keep an eye out for that, as it shows the normalization of cannabis is spreading quickly.

Until next time,

Greg Miller

Executive Director, National Institute for Cannabis Investors

P.S. Phase 2 has just begun. Former Speaker of the House, John Boehner, calls it the “sweet spot” for cannabis investing. Early, smart investors have the opportunity to make billions. But to be one of them, you need to know which companies can maximize your growth and which ones are fly by night offerings. Click here and we’ll give you four game changers right now.


Comments

4 responses to “Colorado Welcomes a New Era of Cannabis Investing”

  1. Hi Greg,
    You’ve talked about companies issuing more shares to make acquisitions. Consequently this dilutes the shares outstanding. But for a good cause [hopefully]. As you know everyone’s concern is share price appreciation.

    Being an experienced investor, but being new to cannabis it’s hard to take the whip-saw in the prices on a daily basis. Plenty of fear in the ‘fear and greed’ index. In order to feel better it is nice to think ‘well at least they have some assets’ if something goes wrong and they end up in a fire sale.

    My question is: can you go into some detail for your readers on the ‘price-to-book ratio’ of some of our companies Maybe explain why share price gyrations may not be such a source of anxiety if Linton’s balance sheet has some staying power. Didn’t he say it was Too clean?

    We would like to know which companies have hard assets to act as a cushion. I loved JDSU in the day, but for those of us [‘widows and orphans’] looking for a ‘value’ approach knowing which stocks are holding valuable hard assets [or valuable intellectual property] would be helpful. Thanks, –JG

    Yeah I know, “take some CBD and call you in the morning’…Thanks Doc.

  2. Morning Greg how are you? I hope you and your family had a great weekend. Nothing like getting the week started off with good news. Now lets see how the market treats us today!!!! Thank you for sharing and I hope you have a great day. Much success to all of us in the future!!!!

  3. Many of these Canadian companies have warrants being traded on a Canadian exchange, how can we find out about them and how can we buy them? Also, does the warrant represent a Canadian share or a USD denominated share (since the company uplisted to the US market)?

  4. Thanks Greg … always look forward to your helpful information. Honestly, you seem to be the only one who isn’t trying to upsell us every other minute. Have a great week!
    Kit Newlin
    Carrollton GA

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