A religious institution investing in cannabis may be surprising, but it’s going to be more common going forward…
One of the world’s most conservative institutional investors has decided to embrace medical cannabis. The Commissioners of the Church of England recently announced that it will consider investing in cannabis companies with a sole medical purpose.
It will hold medical cannabis companies to the same standard it applies to other pharmaceutical companies.
In some respects, this seems like a small step. It’s not like the Anglicans will be buying into recreational cannabis companies, even though most of them have a health orientation. Remember that part of the reason why CBD is becoming so popular is the health benefits it offers.
And any investments the Church does make will not be huge. The entire endowment is £8.4 billion (US$10.3 billion), and only about a quarter of that is invested in the kinds of equities where a cannabis company might be a fit.
But the reality is that the Church of England’s decision is a huge change, and it is a preview of bigger things to come.
I know our readers have been asking what I see for the future.
Opening the Door for Bigger Investments
The Church has some of the strictest investment restrictions in the world. It has limits on investments in alcohol companies and completely bans investments in tobacco companies, weapons companies that do not supply militaries, gaming, high-interest lending, coal mining, and more.
The Church’s new position on cannabis represents the worldwide change in how people view cannabis.
It’s no longer a “sin” product like alcohol or tobacco – it’s a legitimate medical treatment. The Anglicans have not yet realized that it is also a healthful lifestyle choice, one much better than alcohol, but I expect them to eventually reach that conclusion.
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The biggest thing to note about the Anglicans’ announcement is that the Church of England is one pebble in what will eventually be an avalanche of investment in the cannabis sector.
I’ve written before that most big institutional investors will not invest in U.S. cannabis companies so long as THC remains illegal under federal law.
And that hasn’t changed.
But it’s also true that even if the federal government legalized cannabis tomorrow, some institutions would not immediately invest. In fact, I spoke with a colleague of mine, Tim Melvin, and he shared his thoughts on when the federal government will reschedule cannabis.
That’s because of that lingering sense that cannabis is somehow bad, like some people have been told for the past several decades.
That second objection is fading, and the Church’s new stance is evidence of that.
What’s more, such a conservative investor making that decision will make it easier for other institutions to make the leap. When pension funds, insurance companies, and other institutional investors review their investment policies, they will have the Church of England to look to as a model.
Collectively, with all that money, cannabis stock prices will soar when it all starts piling in.
The $20 million from the Church of England won’t move the market. But $20 million from the Church of England plus $1 billion or so from the California Public Employees’ Retirement System, plus a few hundred million from the State of Wisconsin Investment Board, plus a hundred million more from Goldman Sachs Asset Management: Now we’re talking!
That’s real money and a real change to the dynamics of investing in cannabis. That’s why it’s such a critical moment for cannabis IPO investors. You can be an early adopter now, but it won’t last forever.
As we endure ups and downs that seem more powered by global market sentiment than by the real story of the cannabis industry, we can look forward to the day that all of those investors start scooping up the shares we already own.
Continue to be a tough and patient trader.
I’ll be back tomorrow with a report on a company that just saw a 10% jump, but it’s one that should be avoided. As always, I’ll make sure you know the bigger picture.
Executive Director, National Institute for Cannabis Investors
P.S. We’re currently looking at six companies with explosive IPO potential. One of these companies is growing at an almost unbelievable rate. This American-based company is focusing primarily on the health benefits of cannabis. But it’s taking it one step further. Not only is it marketing to traditional medical marijuana patients – it’s also planning on marketing a public brand. We’ll tell you more about it and how investing in it could work for you. Click here to learn more.
4 responses to “Why the Church of England Is Becoming a Cannabis Investor”
June 18 2019