THINGS ALL INVESTORS SHOULD
LOOK FOR WHEN
REVIEWING A CANNABIS COMPANY
By; Nic Easley
need to understand in order to effectively collaborate on projects. In
this article, we’ll consider five key areas to examine when considering whether to invest or pass.
W
hile investing in the
emerging cannabis industry offers huge potential and payoff,
it’s unclear if these opportunities will be a big boom or a bust.
Right now we are seeing trends
similar to the rapid growth of
the tech industry that occurred
in Silicon Valley, and many lessons can be learned from previous booms, bubbles, and busts
when investing in this industry. Those who understand the
cannabis industry have quickly
realized there is specific background information investors
CANNAINVESTOR Magazine
Before examining these five items, there is a dynamic character found in this industry that is imperative to understand. This is
the fact that while 24 states hold medical laws and four states allow
adult use (in addition to the District of Columbia), there are many
unique regulations, ordinances and governing structures specific to
each location, in addition to certain federal guidelines that must be
followed in order to create compliant cannabis companies.
When weighing your options as an investor, first you have to ask
yourself what sector of cannabis you are considering. Are you interested in the hands-on side of cultivation, extraction, and retail, or
do you want to get into ancillary service industries or ancillary product manufacturing? All aspects involve varying levels of risk that rest
mainly on IRC 280E and shifting local, state, and federal guidelines.
Once you have determined which part of the industry you’re most
comfortable with and understand local and state frameworks, you
can make informed decisions on where to legally place investments.
The next logical step is to focus on available opportunities and what
to specifically look at when analyzing these opportunities. We will
discuss this in further depth below.