Monthly Archives :

June 2018

The Unfiltered Truth About Cannabis Stocks

Recently, the Canadian Senate approved bill C-45 — also referred to as the Cannabis Act — which means that Canada is primed to become the first developed nation to legalize recreational cannabis use in adults.

With the bill’s passing, there’s an expected $5 billion revenue on top of medical marijuana sales and exports to countries that have also legalized medicinal cannabis.

But what does that mean for cannabis investors, and how can you invest responsibly during the excitement surrounding the industry?

In general, there are going to be a few important aspects of the market to consider as you make financial decisions going forward.

It’s Not Always About the Plant Itself

As exciting as it can be to invest in cannabis growers, the time to invest in them has already passed. This has been the case since the first wave of investors purchased stocks in medicinal cannabis growers, who can easily adapt for the new demand for recreational cannabis.

Instead, look for businesses that participate in the cannabis industry in ways outside of growing the crop itself. Marketing firms, packaging companies, software developers, and real estate partners are all types of businesses that can have a focus on the cannabis industry.

There’s Still A Market for Medicinal Products

If you are adamant about investing in growers, the soundest investment lies in medicinal products such as extracts and CBD oils.

While a niche market, pricing of these products are expected to remain consistent over time, so investing in growers that focus on these types of products offers more stability than recreational growers.

Here’s why: the issue recreational cannabis will face in the future is commoditization. This means that in a few years, the market will likely face an overproduction of recreational cannabis, which drives prices down and results in a net loss of profit.

Even with a recreational market coming into play, pharmaceutical and biotech investing remains lucrative and is expected to remain consistent.

Watch out for Stock Dilution

With an expected growth in the cannabis industry, something to be wary of is stock dilution.

Publicly traded companies looking for more investors can dilute the value of their shares by selling common stock, stock options, or convertible debentures, meaning you’ll have less ownership of the company and less say in investors’ meetings.

While not every company is expected to engage in these practices, the influx of new cannabis investors are going to entice some businesses into dilution.

Before investing in a company’s stocks, it’s always important to put in your due diligence and determine the most sound investments.

 

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The Legal Side of Owning a Cannabis Business: What You Need to Know

With the rise in support of cannabis use (both medicinally and recreationally) in the country, many people are considering starting their own cannabis-related businesses.

If you find yourself among those who are looking to ride this so-called “green wave,” there are a few industry-specific considerations you need to make.

You Will Likely Need A License To Operate

If the cannabis plant itself is going to be handled, you will need to be well informed of your state’s laws and regulations.

Many states require that you hold a license to operate, much like how there are laws that require a license to sell distilled spirits. Depending on your state, there may be a limit to the number of licenses issued to businesses.

You may also need to prove that you have enough capital to support your desired business and the competency to run it. The more your states limits the amount of licenses, the more likely you will be vetted before approval.

Get A Lawyer

While it may seem like an obvious choice to seek out an attorney that focuses on cannabis law, they aren’t always available or up to task depending on where you plan to do business.

Your business may have cannabis as its primary focus, but it still nonetheless a business. What will more likely be a better option is to hire an administrative or intellectual property lawyer.

Both of these types of lawyers will be able to provide you with the services you need to operate your business. Since these laws operate on a federal level, it provides you with a wider selection of attorneys.

Keep Your Product Out of the Wrong Hands

A concern that cannabis businesses need to address is making sure that their products don’t accidentally end up in the hands of minors.

Something that many dispensaries and other cannabis businesses practice is carding people as they enter the storefront, turning away anyone who is under the smoking age. Many states have similar laws concerning the sale of distilled spirits in liquor stores.

Something unique to cannabis is how some edible products, such as infused cookies or chocolates, can be eaten by children who mistake it for regular food.

While this issue is more so the responsibility of parents and guardians, something that your business can do to help is with packaging. If you make sure that all products sold by your business are unambiguously labeled, you not only do your part to address the issue but also cover yourself legally.

Stay up-to-date on your State’s Laws and Legislation

Legislation that legalizes the use and distribution of recreational and medical marijuana is still in its infancy, which means that a definitive precedent doesn’t exist yet.

Laws are subject to change, so understanding the direction your state’s legislature is going will help your business adapt to new regulations.

Along with staying informed, it’s also important to make your voice heard by joining a group. Cannabis investors and business owners from local groups to advocate for legislation that supports the industry.

 

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How Women are Raising Capital in the Cannabis Industry

The cannabis industry is proving to be a welcoming environment for female entrepreneurs; at the very least, more so than many other industries. We are seeing a more balanced gender distribution across management and executive positions in cannabis.

However, there are still barriers that make it hard for women to be given credibility at the same level as their male peers. To make matters more complicated, cannabis is still considered a Schedule I drug by the federal government; the same designation given to heroin and cocaine.

Despite the circumstances, more and more women are making their claim to the industry by becoming cannabis investors and business owners. Here are a few ways they have been approaching the market to raise capital:

Seek out cannabis business incubators

More specifically, seek out incubators specific to the cannabis industry. The best incubators will provide guidance along with the expected support in training, networking, and branding.

In the modern day, it pays to work smarter, not harder. You don’t have to do everything yourself; business incubators are there to help with your startup and provide resources you may not have access to on your own.

Find a mentor

Seek out women who successfully raised capital and started their own businesses.

Reaching out to potential role models will only ever have positive results. You might be able to work under them; you might not. You will at the very least grow a list of network contacts, which is always good. With nothing to lose, you should never hesitate to make that first contact.

With that being said, it would be limiting to only contact women in the cannabis industry. There are many successful female entrepreneurs and business owners in other fields that have successfully raised capital. There are a lot of business insights that can be applied broadly, and it would be a shame to miss out.

Think outside the box

Many people are looking at the cannabis industry and thinking about opening their own dispensary, but it’s limiting to only think of the industry in regards to selling recreational and medical marijuana.

There are many ancillary business models that can participate in the cannabis industry without directly handling the plant. There is a high demand for industry-specific marketing, packaging, and software development companies.

Setting yourself apart from other entrepreneurs is always an effective way to get the attention of potential investors.

Attend industry pitch forums and conventions

With the industry still in its infancy and the lucrative market it’s generating, there should be no shortage of investors gathering to evaluate proposals by attendees.

Being able to communicate your plans to contribute to the industry in a meaningful way is key to successfully raising capital, but finding the right platform to pitch your ideas is what will carry you through your financial goals.

The key point to take away from all this is to be aware that the cannabis industry is still mailable and going through constant evolution. Ingenuity isn’t gender restrictive, and we are seeing more opportunities for women in the cannabis industry.

The potential to follow your ambition is there and united, we can challenge the preconceived notions on sex and gender.

 

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Industry Power Women’s Brunch

Successfully convincing a group of strangers to support and fund an entrepreneur’s idea, requires a skill that may intimidate the average person. There must be an innate ability to read a room, a confidence to remain resilient if the feedback is less than favorable, and an understanding of persuasive reasoning.  These skills among others, are what separates entrepreneurs who pitch, from entrepreneurs who seal the deal.

Sometimes an entrepreneur enters a pitch meeting where the circumstances do not work in their favor. Maybe the investors have been inundated with funding requests, maybe no one believes in their product, or perhaps the entrepreneur is a woman of color. This woman may have to work past oppressive heteronormative standards before even opening her mouth to speak. These circumstances may deter many, but through practice, research and tenacity, persuasion can become another tool readily available in the kit of a visionary.

Aristotle stated that there are three methods of appeals which can persuade others to believe that you, above all else are worthy. The first method is ethos or an approach through ethics. How can an entrepreneur’s character stand out? How can they convince someone that they are worth the effort? Secondly, pathos or emotions. How can a business owner emotionally captivate an audience? How well do they read a room and respond to feelings? Finally, logos or logic, this skill is crucial towards solidifying support. How would this idea logically make sense? How can an investor recoup and profit? What evidence supports this? Understanding these appeals, can create a stand out entrepreneur and pitch, even in the midst of unfavorable circumstances.

Many times women and gender non conforming entrepreneurs are not invited to investor meetings. Therefore, they do not have the advantage of constantly pitching and perfecting their skills. Subsequently, these entrepreneurs have to work smarter in order to afford the same opportunities that their male counterparts have by default. This is the reason why the Industry Power Women’s Brunch event on May 22nd was so important. It created a safe space for women to share and pitch ideas to a roomful of people who already believed in them. In addition, it facilitated a judgment free atmosphere where women had the opportunity to share their ideas, hear feedback and continue to perfect their pitching skills.

It was at this brunch where guest speaker Khadijah Adams of CE Hutton, delivered a rousing speech that brought a few women to tears and the entire audience to their feet. In essence, Khadijah pitched without naming the resources that CE Hutton provided. She engaged the room, piqued their interest in her journey, and allowed that to be the gateway towards questions about her company. She employed Artistotle’s pathos, logos and ethos. In an industry dominated by men, brunches such as these and speakers such as Khadijah, are important. They are reminders that women deserve a seat at the table, where they too can have a piece of cannabis infused pie.  Maybe that pie was baked at a woman owned restaurant, backed by an enthused investor who believed in her business pitch. In order for these entrepreneurs to flourish, there must be events such as the brunch, where they can perfect their skill, pitch to other women, and get the funding they deserve.

 

By: Thaïs Francis

Reaching Financial Freedom As a Woman in the Cannabis Industry

On an unusually sunny Sunday in the currently gloomy Los Angeles, a group of dynamic women gathered at Philosophie in Santa Monica. The industrial loft was sleek, modernly furnished and teeming with excitement. “Reaching Financial Freedom as a Woman in the Cannabis Industry” was an event that featured successful women who wanted to share their wisdom and network. In the cannabis industry, the amount of women in CEO and executive level positions has dropped from 36% in 2015 to 27% in 2017. This percentage is low, yet it mirrors the trend of most work places which is dominated by men. The cannabis industry may be new, but it follows patriarchal norms where men tend to be the only ones with access to capital and connections that keep them at the top.

The newness of the industry however, also works in favor of women. Rules are still being established, minds are still comprehending the full benefits of the plant, and research is showing that favorable outcomes in the cannabis industry are on the rise. With this knowledge, and the experience of working tirelessly without credit or promotion, women are carefully planning their ascension within the industry. The importance of intelligent maneuvering was evidenced by the topics, panels and speakers at the summit. There was also a refreshing level of social consciousness as some spoke about the exclusion of women of color from the cannabis conversation.  One guest speaker however, showed that determination and perseverance can surpass barriers- her personal success was a testimony.

This was guest speaker Khadijah Adams, Vice President and Chief Operating Officer at C. E. Hutton. As she walked to the podium, clad in a yellow off the shoulder jumpsuit with her head held high, the audience was already captivated. After holding the mic for a few seconds, she laid it to rest, knowing that her booming voice needed no assistance. The room fell silent, as Khadijah broke down her beginnings, failures and tales of persistence in the midst of life shattering blows. Khadijah provided a tool kit, designed specifically for women entrepreneurs to organize their goals for future success.  After her speech, there was a palpable shift in energy and an electric charge permeated the atmosphere. Women who had before expressed uncertainty and apprehension about rising in the cannabis industry, seemed aglow with a new fire to press on. There is no blue print for success in a newly forming industry, however listening to Khadijah and the other speakers, as well as receiving valuable tools for planning, helped lay the foundation for success.

In addition to the speakers, the well planned event hosted small groups, where women could convene, fill out goal packets, and effectively network. The curation of groups, activities, workshops and panels, showed that when women gather, efficiency, strategy, and organization are at the precipice. The effectiveness in execution of CWES was a microscopic example of how women intuitively and intelligently handle business affairs. This is the type of leadership that the cannabis industry needs, and at the rate in which women are galvanizing, this leadership will be reflected in a decreasing gender gap within the industry.

 

By: Thaïs Francis

How the Cannabis Industry Can Be The Gender Equalizer

With a shift in laws and public opinions toward cannabis comes the onset of a brand new industry that can shake up the usual employment trends seen in other industries. Plainly speaking, the cannabis industry has potential to be the first true gender equalizer.

Women in the United States makeup 51% of the workforce and earn 60% of college degrees. Despite these statistics, only 29% of senior positions are held by women, and only 2% of CEOs are women.

Comparatively, 36% of cannabis executives are women; while not quite equal, the outlook of the industry is considerably better when compared to the national average. Along with this, the cannabis industry has a few things going for it that can establish itself as the first true gender equalizer.

Potential for Growth

The cannabis industry is still in its infancy and has a projected job growth rate of 21% per year. For comparison, healthcare only has a 2% job growth rate.

With a growth rate comparatively higher, the cannabis industry has more space to close the current gap it currently faces. Cannabis business owners and CEOs have a unique opportunity to create the equal groundwork environment that sets the new standard for other industries to follow.

The Market Will Support It

While the legalization of recreational marijuana in some states is the latest hot topic, the use of cannabis products for medicinal purposes continues to hold a significant portion of the market.

We’ve seen medical marijuana used to help cancer patients manage the pain and discomfort that comes with chemotherapy; we’ve also seen the use of CBD oils effectively treat those with epileptic seizures.

Part of the appeal of medicinal cannabis products is the fact that it provides a holistic alternative to those sensitive or allergic to certain medications, or have a compromised immune system.

It’s this very holistic approach to medicine that motivates families to place full support behind the cannabis industry. This involvement is often lead by mothers who want to advocate for their children’s health; the outcome of which is women opening their own cannabis businesses and making their voices heard.

We Already Have A Few Role Models

Part of the solution is to provide women seeking careers with role models for inspiration; thankfully, we have a few examples to share.

Jennifer M. Sanders: founder and CEO of CNS Equity Partners. Jennifer has a background in investment banking, but left the male-dominated workplace to pursue an industry with positive impact at the forefront.

Amber Senter: COO of Magnolia Wellness. Amber’s business has a  focus on medicinal marijuana despite being based in California. She was inspired to dive into the cannabis industry after being diagnosed with lupus.

Hope Wiseman: Owner of Mary & Main. At 25, Hope is the youngest dispensary owner in the country. Her story is a testament to the opportunities the cannabis industry provides, regardless of age.

These women are only a few examples that cement the cannabis industry’s readiness for women and minority-owned business.

While there may be a lot of work left to achieve true gender equality in the workplace, the cannabis industry has a lot going for it to be an example to follow.

 

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