Experts who participated in a recent online panel agree there should be no doubt about the US being the priority for anyone looking to invest in cannabis.

In a conversation at the most recent Prohibition Partners LIVE event, Thomas Carroll, senior analyst with Stansberry Research, and Matt Karnes, founder of GreenWave Advisors, explained that the US cannabis marketplace should not be dismissed merely on legality concerns.


Even though cannabis is federally illegal in the US, states have moved ahead with legalization programs for the sale and consumption of cannabis for medical and even recreational methods.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Furthermore, Carroll told the audience, CBD-based Epidiolex is a federally approved drug sold and distributed today by GW Pharmaceuticals (NASDAQ:GWPH).

“If you wait to get involved until the president, either this one or the next one, puts pen to paper and signs some type of meaningful legislation, as an investor you’re way, way, way behind the boat,” he said during the conversation at the event.

Aside from that, interest from institutional investors is picking up — the analyst pointed to a recent US Securities and Exchange Commission filing that shows over 3 million Green Thumb Industries (CSE:GTII,OTCQX:GTBIF) shares were picked up by a single institutional investor.

Should cannabis investors focus on the US or Canada?

At one point, host Sam Volkering, who is editor and investment director at Southbank Investment Research, asked the panel participants about investing in the US cannabis market compared to investing in the Canadian industry. For both experts, the answer was clear.

“I’ve been telling people for the past six months, you have to be invested in US cannabis stocks starting right now, and that’s really where we should be focused as investors today,” Carroll said.

The analyst said when he first started covering companies in the space, he was confused about why anyone was favoring Canadian operations based on the financial results and business models of US operators.

He explained that a large base of US investors were taught to look for Canadian cannabis investments with no meaningful business operations in the US, since these companies have reached senior exchanges like the NASDAQ and the NYSE.

Karnes said he prefers the US side of the industry and has been lukewarm on the performance of the Canadians. He expressed disappointment at the management teams of Canadian operators, saying they have continually missed financial targets and are bleeding cash.

He also pointed the finger at the management teams of Canadian companies that may have adequately known the ins and outs of the cannabis plant, but weren’t capable of managing street expectations.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

On the flip side, Karnes was positive about the track record for US operators that have had to conduct business under the shadow of the drug’s federal illegality.

M&A and banking for cannabis operators

The panelists also discussed M&A activity in the cannabis space, which has heated up in the past few months as a trend of consolidation settles into the industry.

Carroll said he expects to see M&A accelerate in the cannabis space, particularly in the US.

The panelists agreed that small private operators thriving in individual state markets will be acquired soon enough by bigger publicly traded names as they try to expand their footprints across the US.

“At the end of the day, we are at the very beginning of what I think is going to be a big M&A boom in cannabis,” said Carroll. “To the point that it’s even part of my investment thesis.”

Karnes was asked to explain the irregularities US cannabis operators face in relation to banking needs.

Due to the federal illegality of cannabis, businesses are barred from accessing the same banking options that other companies would be able to use, leading many operators to deal in cash.

While a division of the US Department of the Treasury has offered guidelines for cannabis businesses that are currently operating within particular state rules, that hasn’t drastically moved the needle for banking needs in the industry, Karnes said.

“There’s an enormous compliance burden, and these banks have to ensure that their clients are in conformity with this requirement. Many banks, particularly the larger ones, don’t want to take that risk.”

The advisor indicated that the industry is hopeful about the effects of the SAFE Banking Act, a proposed piece of legislation that passed the US House of Representatives and was reintroduced in March. This policy would give cannabis businesses the opportunity to perform banking activities.

However, Karnes warned that even if the policy makes it all the way through, he wouldn’t expect a massive influx of capital into the cannabis industry right away.

Don’t forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTCQX: TCNNF), a leading and top-performing cannabis company in the United States today announced the appointment of Marcum LLP (“Marcum”) as its independent registered public accounting firm, effective July 5, 2021 . Marcum was appointed following the resignation of MNP LLP (“MNP”) as the Company’s independent registered public accounting firm effective July 5, 2021 .

“We would like to thank MNP for their guidance and expertise over the past two years and we look forward to working with Marcum as the Company’s new independent registered public accounting firm,” stated Chief Financial Officer, Alex D’Amico.

Keep reading... Show less

Cannabis-infused beverages are not a new product concept, but this summer Canadian drink makers hope consumers will discover them for the first time.

Recreational cannabis beverages have beguiled Canadian producers through different avenues, and many continue to make investments. The promise of these drinks lies in the potential of a more welcoming option for new consumers who may be out of their depth with rolled-up dried flower.

Keep reading... Show less

In the news release, BioHarvest Sciences Inc.‘s First Cannabis Cell Reservoir Produces Ongoing Flowering Stage Cannabinoid Cells For 2 Years, issued 07-Jul-2021 by BioHarvest Sciences Inc. over PR Newswire, we are advised by the company that an incorrect version of the release was issued inadvertently. The complete, corrected release follows:

BioHarvest Sciences Inc.‘s First Cannabis Cell Reservoir Produces Ongoing Flowering Stage Cannabinoid Cells For 2 Years

Keep reading... Show less

Trulieve is the first medical cannabis operator to start planting in the state

Trulieve Cannabis Corp. (CSE: TRUL) (OTCQX: TCNNF) (“Trulieve” or “the Company”), a leading and top-performing cannabis company based in the United States announced today that it commenced operations in West Virginia . The Company has begun cultivation at their 100,000 square foot size facility in Huntington, West Virginia .

Keep reading... Show less

– The Company demonstrates the efficiency and reliability of its BioFarming technology by reducing production cycle time for Cannabis from 14-23 weeks to 3-4 weeks.

– The Company’s BioFarming technology will allow the Company to harvest 13-17 cycles per year versus 2-4 cycles per year for conventional Cannabis agriculture.

Keep reading... Show less