Cannabis companies are still facing backlash from 2019’s struggles, but I have answers to a few of your most pressing concerns…
To say I’m excited for 2020 would be an understatement. What’s not to be excited about? Companies are going public again now that the market is better, more states are likely to pass recreational laws, global cannabis markets are seeing more traction, and the list goes on.
And while 2019 had its rough periods, this year wasn’t all bad.
The United States House of Representatives passed the SAFE Banking Act and other pro-cannabis financial legislations.
Illinois and Michigan both passed adult-use legislation and are preparing for a strong debut next year without some of the problems experienced by places like California. And of course, we hosted the First Annual NICI Retreat in Las Vegas. The conference itself was a huge success and we’re already planning for next year.
Innovative Industrial Properties Exposure
Louis L. asks: “How great is IIPR’s exposure if and when some of these companies go under?”
It’s definitely a risk, but I think Innovative Industrial Properties Inc. (NYSE: IIPR) is pretty well covered.
The assets they buy are in pretty high demand right now, even if the company operating it does not do well. Cultivation facilities in particular are in demand in almost every state.
So, if IIPR loses one tenant, I’m pretty confident it can find another one quickly.
It’s also worth noting that IIPR has been increasing the credit quality of its portfolio over time.
Eventually, there will probably be a negative announcement about one of its properties – no one bats a thousand.
On that day you’ll have a good chance to pick up shares because any decline will be short-lived.
My Thoughts on Vireo Health International
Patrice G. asks: “Hey Greg, what are your thoughts on Vireo Health? They just brought Linton on board.”
Vireo Health International Inc. (OTC: VREOF) is a very interesting company and it’s even more interesting with Bruce Linton involved.
The company already had an all-star management team and it is doing fairly well. It just couldn’t get the attention it deserved.
Bruce certainly fixed that problem!
I haven’t previously recommended Vireo because I like companies with a larger concentration in each state, whereas Vireo has preferred a smaller presence in more states.
It’ll be interesting to see what advice Bruce has on that front. It’s a company I’ve been following and I’ll be watching it even more closely now that he’s involved.
Ionic’s Current Status
Kevin S. asks: “I am a heavy investor in Ionic Brands. Any chance of them coming out of this vape crisis? Don’t they have a coffee patent that could help them out?”
I spoke to Ionic Brands Corp. (OTC: IONKF) CEO John Gorst recently.
The short version of our conversation is that Ionic is seeing success in Washington and Oregon and the company is focusing exclusively on those states for now.
It means the company will be smaller than everyone hoped but it gives the company a chance to fight another day.
The coffee patent may or may not be valuable. There are several companies that claim to have the intellectual property to make a coffee pod compatible with Keurig machines and there will eventually be a fight over it.
I’d say that any real profits from that patent are a long way away.
Michael S. asks: “Does the addition of Paul Penney of RiverForce Partners to KushCo’s advisory board help or indicate what may be in store for KushCo?”
I have to confess that I don’t know Mr. Penney so I can’t give you a complete answer.
But I will say that the KushCo Holdings Inc. (OTC: KSHB) CEO Nick Kovacevich has been aggressive in surrounding himself with some very good advisors, so I have no doubt that Paul Penney will be a good contributor for the company.
I don’t think we can intuit anything specific from bringing Penney in, though. Even if he and Nick had an idea when Nick brought him aboard, this industry is changing too quickly for any plans to last for long.
Next week, I’ll be bringing you more on some of the biggest victories we saw in 2019. Stay tuned!
Executive Director, National Institute for Cannabis Investors
18 responses to “These Are Your Most Pressing Concerns Heading into 2020”
December 21 2019