Institutional investors are ready to make their cannabis play…
Cannabis isn’t waiting for Wall Street. I see a wall of money building up, reaching billions of dollars.
Corporations and private equity pros see the opportunity to mint incredible profits. And the last year made this opportunity five times bigger.
And I count another $2.8 billion sitting in newly formed companies specifically created to buy up cannabis companies.
That $7.2 billion is enough to buy up almost every publicly traded cannabis company. In fact, it’ll cover the cost of about 80% of publicly-traded cannabis companies tracked in the NICILytics database.
So, the money is there – primed to buy up cannabis companies and assets.
As that wave scoops up cannabis stocks, anyone invested correctly in cannabis right now is perfectly positioned to ride this wave of capital to all-time highs, and beyond.
New-Found Purchasing Power
For starters, the conference kicked off with a keynote address from former Canopy Growth CEO Bruce Linton. In his talk, he announced he’s launching a special purpose acquisition corporation (SPAC) called Collective Growth Corp. that’s already seeded with $150 million.
Now, SPACs are interesting vehicles. These are “blank check” companies, meaning they raise money with no real mandate.
They are mostly used for the specific purpose of funding acquisitions, and should the money not be invested usually within eighteen to twenty-four months, that money is returned to investors – sometimes with interest.
This latest SPAC from Bruce joins 11 other SPACs of which I’m aware.
Combined, these buy-up pools of money have $2.8 billion in purchasing power between them. And many of these SPACs are backed by venture capital funds, private equity firms, and investment banks.
Institutional Investors Look to Claim Their Stake
This is the first cannabis conference I’ve attended where most of the investment bankers weren’t Canadian banks.
Instead, I saw traditional Wall Street bankers, some American-based boutique firms, and at least five other venture funds all looking for deals in private cannabis startups.
And it’s no wonder – as our Cannabis Venture Syndicate members know, private investment deals have the potential to create life-changing profits.
This tells me that institutional investors in the United States are now looking hard at cannabis companies.
That means stock ownership will soon move into the hands of stronger, more strategically-oriented investors – and stock prices will make their way higher, properly reflecting a doubling of revenues and markedly-improved profitability.
U.S. Companies Plan to Expand Through Acquisition
Well-funded multi-state operators (MSOs), like Cresco Labs Inc. (OTC: CRLBF) with $200 million in credit lined up, are ready to take advantage of ground-floor stock prices and expand through careful acquisition.
In the cannabis industry, becoming a multi-state operator (MSO) is more important than ever. Here’s how Planet 13 is expanding its empire.
Another thing that struck me was how attendance was dominated by American multi-state operators rather than Canadian limited partnerships (LPs).
Companies like SLANG Worldwide Inc. (OTC: SLGWF) and privately-held Wana Brands seemed to have partnerships left and right, as everyone is looking to export their brand across the country.
Finally, the conference was twice as big as last year. That tells me that there is a lot of resilience among cannabis players and confidence in the year ahead.
I share that confidence, too.
To find out how you can capitalize on this wave of cannabis cash, grab a copy of the 2020 Pot Profits Roadmap today.
Don Yocham, CFA
Executive Director, National Institute for Cannabis Investors
11 responses to “A New Surge of Cannabis Cash Is Ready to Be Spent”
March 05 2020