Brochstein: Marijuana Rapidly Developing Into A Real Industry
Your overall impression of the summit here in Denver?
This is their first national convention, and it really says a lot for the industry.
This follows the ArcView meeting. And the ArcView meeting yesterday was the most highly-attended event that they've had. This event is the largest cannabis event yet, in terms of (being) focused on the industry and not on the consumer side. And there's going to be Marketfy's Weedstock next week. So that's three straight events in a row.
And in November, in Las Vegas, is going to be the largest cannabusiness conference ever, 1,500 people they're expecting.
So what does this say to you about the marijuana industry?
The industry in general is very real. We've reached a tipping point. As I speak to people, I try to find out where exactly are they. And a lot of people are just getting introduced to this. So on a number of fronts, this is very encouraging. If you look around there are very legitimate businesses here.
These are people who, they might have had some cannabis experience in their past – which obviously's been from an illegal world. But many of people here joined the industry more recently; they're working with those types of people, building upon their knowledge base, trying to take this industry to a much higher level.
As far as the public stocks, this conference doesn't feature that many public companies, that's one of the things that I'm upset about. Weedstock (will be) a little more focused on the public companies. But the ones that are here, Surna (OTC: SRNA) CannLabs (OTC: SDSPD), there are a handful of other ones. But those two in particular stand out, because they're what I call the second wave.
In 2009 were the first marijuana stocks; four companies that haven't done anything in that time. Most of them are still on the pink sheets or they're serially diluting with no revenues; they're not real businesses yet, maybe they will be.
Here, we're starting to see real businesses, with people who have very successful backgrounds, they have cash flow, so it's really exciting.
The problem with the public markets is that I'm tracking about 200 companies and I think about 80 percent of them will never amount to anything – and that's saying it nicely.
We just walked out of the summit's penny stock breakaway session, and the panelists there sounded very cautious. Where does the industry go next?
At 420 Investor, we're working on raising the transparency bar, that's going to be a big part of the Weedstock theme. We all know the public companies are littered with a lot of pink sheet scams – we're aware of that, we know what to look out for. When the companies are legitimate, the valuations tend to be very high. This really reflects that a lot of people want to invest, and there's just not that many opportunities.
The prices of most marijuana stocks, like the ones I've mentioned, that aren't even real businesses, they've gone up over the last four years. Unless you came in after the year started, at the peak, most people have made money in these stocks. So the idea of being burned depends on your time frame. But the reality is, the industry...I see it improving. That's one of the things we try and do at 420 investor, is to get these CEOs to be more transparent, and to be more open and shareholder-friendly.
The 420 Investor community, many of them never understood these concepts; a lot of them are kind of new to investing and didn't even really understand that shareholders can have a voice. We're now at the point, as a community, where our members reach out to companies and say, 'you need to improve the way you're doing things,' and we're seeing some examples of it.
Next article: What went on with the SEC, what will keep that from happening again – and will the Fed eventually fly the white flag when it comes to keeping marijuana illegal?
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