In this week’s Q&A, we’re going to do more than just answer your questions about CannTrust and cbdMD. We’ve got some insight on Jay-Z and Joe Montana… and how they relate to the cannabis industry.

Aside from the fact that they’re both millionaires, Jay-Z and Joe Montana now have one more thing in common.

Both have partnered with Caliva, a California-based cannabis company. Caliva produces branded cannabis products, flower, and oil throughout the Golden State. It also operates a cultivation facility and retail store in San Jose.

Additionally, the private cannabis company has also teamed up with Ben and Jerry’s, giving away free ice cream on April 20.

When Montana first partnered with Caliva in January, he helped it raise $75 million. Jay-Z, who reached out to Caliva in hopes of finding the right cannabis partner, just signed on as its Chief Brand Strategist.

And it wasn’t a hasty decision. You have to take your time to find the best investments.

The rap mogul was searching for a company he could trust.

“With all the potential in the cannabis industry, Caliva’s expertise and ethos make them the best partners for this endeavor. We want to create something amazing, have fun in the process, do good and bring people along the way,” Jay-Z said in a statement.

This is a timely lesson, as one marijuana firm lost the trust of its shareholders this week.

Questions & Answers

CannTrust Holdings (NYSE: CTST) recently announced that its Ontario facility was found non-compliant under certain regulations by Health Canada. Following this news, CannTrust’s stock price fell 37% from July 2 to July 11.

So, even though CannTrust isn’t in our model portfolios, I wanted to answer your questions about the this company and its situation.

Thomas B. asks: “Hi Greg, would you please comment on the current ‘situation’ with CannTrust?”

Hi, Thomas, great question!

I know a lot of folks would like to know if the stock price will keep dropping.

I can’t say whether the stock drop at CannTrust is an overreaction. That’s because I’ve never seen the company as anything other than a mid-tier producer. In other words, I didn’t think CannTrust deserved its original share price.

But I can certainly speak more about the company.

I don’t know whether senior management had a direct role in the regulatory trouble the company is in. What I do know is that these things can happen to any company, even if the senior executives are not doing anything wrong.

It’s simply impossible for senior management to be at all places at all times. For example, I’m pretty sure the top Boeing executives did not know that some of their most crucial software was being sent to low-cost contractors.

But senior management can reduce the risk of violating regulations or suffering other disasters by creating a “culture of compliance” at the company. It’s something that one of our amazing NICI staff wrote about this past week, and it’s something I harp on, not only when I’m writing to you, but when I talk to company executives.

It’s crucial that companies create an environment where everyone, from the CEO down to the newest plant trimmer, has the knowledge necessary to comply with laws and regulations.

Ultimately, events like this are the growing pains of an industry coming out of the “wild west.” Even a year ago, something like CannTrust’s violation might not have even affected the stock price because most investors thought cannabis companies not playing by the rules is the norm.

Today, investors know that isn’t right, and companies are on notice to straighten up and fly right after events like this.

Finally, I’d like to answer a question about a CBD company making some big moves in the world of sports.

Roland & Joan ask: “We have a question regarding cbdMD (NYSE: YCBD). Recently, you referenced that company and Bubba Watson’s partnership with them. We have personally used their CBD oil, and they are a very credible company with good quality control. If you have recommended them to be a part of the cannabis portfolio, we missed it and would like to know your opinion. If you haven’t recommended them, we would like to know why. Thank you.”

Hi Roland and Joan! Thanks for the question, and I’m glad you found a CBD formula that works for you.

YCBD is too small of a stock for us to recommend. What I mean by that is there aren’t enough buyers and sellers right now to create stable prices for that particular company. For example, if I told our members to buy Amazon, it wouldn’t make much of a dent in trading activity.

But if I said buy a small company like cbdMD, all of the trades all at once would send the stock price up very quickly. When the frenzy died down, prices could drop drastically, and many of our members who bought in at the top would experience significant losses.

That’s not good for the companies, or for us.

Although, my staff and I have been working on a NICILytics entry for cbdMD.

Thanks again for the question, and I hope I was able to provide some clarification.

Greg Miller

Executive Director, National Institute for Cannabis Investors


15 responses to “What Jay-Z and Joe Montana Have in Common”

  1. Morning Greg how are you? All due respect I don’t care what Joe Montana or Jay-Z is doing. I am more concern why the cannabis market keeps performing badly. We were told that once quarterly reports start coming in the prices of our shares would increase that did not happen. We were told once M&A activity starts it would improve our share price that also didn’t happen. Now we are being told that we should have a great summer and that also is not happening. But thank you for sharing but I would prefer receiving information that is pertinent to the crisis at hand we are loosing money every day and the information your giving us in regards to that is not working out WHY???? I am invested in 41 different companies in this industry and they are all doing bad!!!! That make no sense to me and you or anyone else can’t seem to provide me with a valid explanation as to why or when is it going to stop and being frustrated right about now is an under statement!!!!! So I thank you for sharing I hope you have a great weekend and much success to all of us in the future!!!

  2. I agree with Jeff Brown 100%, I don’t understand the “Merci pour L’aide que vous M’vez apporte et de cela j’aia beaucoup beneficie
    Bill Rogers

  3. cbdMD I am a disabled veteran that has been using this product for two has been consistent and it’s quality which tells me they care.also for any vets out there they have a great discount 100 plus dollars off each of my renewals.I believe they are caring about their product and also the people using it will take them a long way!!!

  4. I am still learning about investing in cannabis and appreciate the information provided to date. I will continue to read and learn. Thanks for your assistance.

  5. It’s long term 3-5 years before you will see the great returns . Do your own research it’s simple once you read and see who has acquired who etc.. If you are in this for the quick buck you will be disappointed. Ride the wave and relax

  6. Just changed over from power traders to ipo’s . Waiting for my Recommendations and up dates and new ipo’s to start fresh with just reading and watching for now . But ready to start investing, looking for the turnaround in the market.

  7. Jeff and Vince are both correct.
    While in one hand people expect answers and on the other people look for answers.
    This service is informative and not for advice. They are not applying a license for that. However, because my person can go both ways. Meaning Lean on the NICI for base knowledge to make a move; my person also researches and to all avail finds some interesting jewels.

    Case in point, during my pursuits of IPO’s, found a wine company name Yahyn that is a connected to Canopy Growth Corp. While investigating that, came across Constellation Brands looking for food stocks-also connected to Canopy Growth. Taking it further, this all linked back to Acreage listed in one the NICI updates. So, Vince keep ’em tight, you’re right on point. You have to see who is connected. It’s important to know that the branding JAY-Z will bring increases profitability. The same as Yahyn has Chris(Ludacris-rapper, producer,actor, restaurateur-30yr celebrity vet) as a member of its board because he is co-owner of a cognac company. Investing at the high level is a small group shuffling around deals before we are really in the know. But know this. NEVER GO WITH EMOTIONS….DO YOUR HOMEWORK….DO THE MATH….YOU’LL ALWAYS BE ON A GOOD PATH….

    Have a great Healthy Wealthy Debt-free Weekend!

  8. The information I get from being a member of NICI has been incredible, I am invested in 11 companies and 2 are up over 100%, and 1 is over 200%, 2 others are up 47% and 50% respectively. 3 others are climbing nicely. Thank You for you timely information to members like myself..

  9. ‘Am not sure this is the correct venue to make an inquiry, but here goes anyway: Is NICI familiar with Goldenseed, based in Santa Cruz, CA? After much due diligence, I recently invested in them and would like NICI’s opinion, if they have surfaced on your radar. Thank you!

  10. I have not been active in following the progress of NICI… Been busy wit personal and family activities . So hopefully this year will be different.

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