Cannabis Capital Summit 2015 - an Intergalactic Opportunity (kind of)

Investing in Cannabis, on either side of the green line, is not for the faint of heart.

According to morning keynote (and "Pot Baron" ) Tripp Keber, CEO of Dixie Brands, the Cannabis industry doubled in size to $2.7B - HOLY CRAP! - yet investors lost a staggering $23.3B (yes, that's a billion) in penny stocks and other related investments. "Angry Tripp" shared this little nugget about 10 minutes into the conference; fortunately, before the investors could scramble, he went on to talk about the double rainbow in the 3rd row and the "intergalactic opportunity" the Legal Cannabis industry represents. Apparently investors on Neptune have seen the unicorn as well. Apparently investors on Earth are still following investment advice from guys named GreenRush72 on Yahoo Finance boards. 

Tripp's insight into the industry was both exuberant and sobering, detailing Dixie's delayed entry into new markets while also highlighting the companies excitement over finally getting into California. "Two steps forward, one step back" he said. "The wheels of Cannabis move really slow". 

Wait, huh? Isn't this the fastest growing industry since Spaniards learned to build boats? And didn't Tripp get the memo we wanted investors to write checks to help get the pitch companies funded? 

That the Cannabis Industry is exploding is indisputable; in a year we've gone from the "wild west" to potential billions being made in Technology, Manufacturing, Real Estate and Branding. According to Beverly Hills Cannabis Queen Cheryl Schuman (who, coincidentally was on a panel I attempted to "moderate") major celebrities as well as athletes from all the major sports were ready to "come out" and jump into the fray with both their check books and endorsements. I liken the industry to growing in dog years - it's maturing that fast. Heck, Barrons, Forbes, and Fortune even cover the space (I did reach out to Forbe's Debra Borchardt to attend the conference but she was unavailable). 

And yes, the Cannabis Industry has tremendous potential to impact the economy to the tune of $60B by 2020 (thats a lot of jobs - and tax revenue!). It's a rocket ship, fueled up and launched - yet still tethered to the earth and unable to reach orbit. And that tether is the banking problem and small issue of national legality. It simply prevents institutional investors and national banks from jumping into the fray. Like the morning sun in Vegas, it just can't be ignored.  

But the world can change quickly, especially if investors heed Tripp's advice to ask the following when considering investment: "Will this company advance the Legalization of adult use and serve as a Brand Ambassador"... and by brand, he meant the brand of Cannabis. Once the dominoes start to fall - and California could be that domino - this industry will change the planet and the way illness is treated. 

Over the course of the day, we heard from industry leaders like my panel (pictured above) on how quickly the market is changing and the risks associated with a cannabis related investment - both in direct and in ancillary opportunities (ohhh the green line!).  Also discussed: what exits in the space might look like, where we heard from Alan Brochstein, formerly of Seeking Alpha and now founder at 420 Investors, that there are over 300 listed cannabis related securities - and at least 75% of which are garbage. So it appears investing in Cannabis is like anything else: you need to do your homework and do it well. No free money here. 

The other major take away was while this might be fastest growing industry on the planet ripe with opportunity, it's still a movement. There will be no unicorn if the movement stalls. We need to keep pushing forward. 

I'd leave you with this: a year ago, we were taking about "picks and shovels";  today I can pop an infused k-cup into a machine for my morning coffee, sit down and read The Denver Post owned Cannabist over breakfast, give my arthritic pup a CannaTreat on the way out the door, and stop on my way to work less than a mile and purchase Sativa and Indica legally - then store said purchase in a custom, lockable Stashlogix case. Pretty soon I'll be able to pull up Eaze on my smartphone and have my order delivered. Or just grow my own using my LEAF system.

It's not going to happen overnight, but who would have thought in 2010 Ireland would legalize gay marriage 5 years later? 

I'll be exploring more insights from the conference and panels and some of the trends we witnessed in future posts so please check back. Until then, thanks for reading!