Brochstein, Part 2: New Cannabis Industry Is A 'Once In A Generation' Opportunity

Benzinga spoke with
Alan Brochstein
, founder of
420 Investor
, earlier this week at the Cannabis Business Summit in Denver. Borchstein shared his insights about the burgeoning marijuana industry and the future of publicly-traded stocks within the sector.

In the second and final part of this interview (read Part One here), Brochstein looks at what makes the cannabis industry unique:

This is one of these, once-in-a-generation investment themes that excites people for a lot of reasons. I always like to tell people, this is a cause, like it or not. There's no 3D printer “cause,” there's no biotech “cause” for the most part. These things are all fun and exciting, but this a really important cause – and it's pulled in people – and they're not all young.

Some of them are hippies from the 70s and 60s that, maybe they lost money in 2000, they lost money in 2007, they'd sworn off stocks. (But) they have something they can believe in again.

This is good and bad. It's good, it gets people in the market. It's bad, at least (in terms) of volatility, because you have uninformed investors. And that just leads to more volatility; they buy high, sell low, things like that.

Related: House Votes To Protect Medical Marijuana Users And Businesses

Can you explain what went on with the SEC and what will keep that from happening again?

So, this is a really tough situation, because the SEC – on the record – has really only said one thing. They put out a press release that was a warning. So we know that they have some concern.

If you take a step back, FINRA, which is a self-regulatory organization that's chartered with protecting the public, that's part of their mission, they came out last August -- pretty much at the lows of the market, right when I was starting 420 Investor – and warned people.

Stock prices had fallen 70 percent and now they're warning people. I had been warning people for months. No one really heeded that warning. Then they came out in early January and repeated their warning, and the stocks just kept going up.

So FINRA is a toothless dog, unfortunately. They can speak, speak, speak but they don't have any sort of enforcement power. Well, the SEC has enforcement power.

We started to see the SEC suspensions in March. And they selected companies that weren't really widely followed. And it wasn't much of an issue. And I'd already been speaking about the potential risks to the market, in this bubble type of mentality, and with all these companies putting out these press releases, and FINRA warning again that we could see this. And, sure enough, we did see it.

The SEC did a series of relatively mild suspensions, like where people would have said, 'oh, well, it doesn't matter, nobody knew that company, anyway.' But then they did Growlife PHOT. Then they did Advanced Cannabis Solutions CANN.

That one was the first Tier One company, with a multiple, $100 million market cap, well-respected management team, a business plan that people thought made sense. And it turned out that was not anything to do with management, but with the reverse merger. And so this is a very technical issue, not someone who was affiliated with the company (and) not really in control of the company. So the company apparently didn't do anything wrong.

Related Link: Will Amaya's New Deal Further Open The Door For Legal Online Poker In The U.S.?

During the Gold Rush, the people who made the money then were the people who sold the picks and shovels to the miners. Are we at the end of that first Gold Rush “bubble” for the cannabis industry?

The bubble was just an investment bubble, it wasn't like a business bubble. There weren't funds that were flowing into parts of the business. People like to say that those who supply the picks and shovels, will be the winners. It's not true. That is a good play, but it's not like either/or.

Unlike energy exploration or mining, growing cannabis is not a hit-or-miss thing. Yes, there can be losers at it, but there's a lot of knowledge out there. So you're not taking a big risk. If you can get one of these highly-regulated licenses, a medical license, for instance, it's just a license to print money. You'll make a ton of money investing in that operation at the right price. But there are a lot of opportunities, and right now the public markets are restricted to those, quite frankly.

This is a grey area. It's not like the SEC says, thou shall not touch cannabis or thou shall not get anywhere near cannabis. There's been no official proclamation. It's more a process; somebody has to be first. The first one to do it is going to be taking a big risk, because if it gets shot down the shareholders are going to be very upset.

Do you think that five years from now the Feds are just going to wave the white flag and say, okay, let it roll?

My official view has been 2020, which is about five years. It will be the end of the first term of the next president. So it can become a second term issue. Hopefully, we'll have 15, 20 states (with completely legalized cannabis) by then.

What ends up happening is the federal government, like (during) the Vietnam War, has to figure out how to get out and save face. You don't want to just keep imprisoning people and wasting resources.

So would you describe yourself as optimistic about this sector?

I'm really optimistic that we're going to have more second-wave companies. The first-wave companies have had their chance to shine and they just haven't done so, for whatever reason.

It's just a question of trying to balance the number of investors with the amount of investment, So I guess I'm most optimistic that we're going to get better and better potential investments in this second-wave.

Posted In: 420 investorAlan BrochsteincannabisCannabis Business Summitmarijuanamarijuana reformMarketfymedical marijuanaRecreational MarijuanaWeedStockAnalyst ColorPoliticsEventsInterviewGeneral

11 Best Black Friday Deals on Amazon

11 Best Black Friday Deals on Amazon

The best Black Friday deals from Amazon are still coming hard and fast because the holiday is not yet upon us and the mega-retailer prefers to keep consumers on the hook for as long as possible—spending as much money as possible. 

To that end, here are some of the best Black Friday deals from Amazon that you might want to consider today.

Calphalon 10-Piece Pots and Pans Set

Regular Price: $172

Sale Price: $138.88

Calphalon’s 10-Piece Pots and Pans Set is designed with stainless steel, stay-cool handles along with pour spouts. The nonstick surface is PFOA-free and built with hard-anodized aluminum that is both durable and conducts heat extremely well. The set includes 2 fry pans, a sauce pan with cover, saute pan with cover and large stock pot with cover.

Apple AirPods 2nd Generation

Regular Price: $144

Sale Price: $85.49

The 2nd Generation AirPods from Apple connect to all Apple devices and give you an enhanced listening experience. Plus, they come with a case that keeps them safe and allows you to charge them in a secure environment. With over 24 hours of battery life, access to Siri and easy setup, you can start listening to your favorite tunes or podcasts today.

Adidas Ultraboost 21 Running Shoes

Regular Price: $129.98

Sale Price: $89.98

The Adidas Women’s Ultraboost 21 running shoe is perfect for anyone who likes a short run, maybe a 5K, half marathon or more. Coming in several colors and styles, you can slip these shoes on, enjoy the cushioned outsole, sink into the supple insole and secure laces.

Ninja AF101 Air Fryer

Regular Price: $129.99

Sale Price: $97.83

The Ninja AF101 Air Fryer allows you to crisp, roast, reheat and even dehydrate food products faster and cheaper than ever before. It has a 4-quart capacity and offers a wide temperature range along with several time settings so that you can customize each dish to your needs. Plus, all the parts are dishwasher safe.

Beats Solo3 Wireless On-Ear Headphones

Regular Price: $199.95

Sale Price: $99

Beats by Dr. Dre are among the best headphones on the market, and the Solo3 Wireless On-Ear Headphones include the Apple W1 chip, Class 1 Bluetooth and 40 hours of battery time. These headphones even have a built-in microphone and offer an adjustable fit so that you can be comfortable whether you’re listening to an Android or iOS device.

Hoover Power Scrub Deluxe Carpet Cleaner

Regular Price: $198.98

Sale Price: $175.98

The Hoover Power Scrub Deluxe Carpet Cleaner allows you to keep your home spotless and clean up after your pets. The cleaner comes with the Hoover Paws and Claws Deep shampoo and a storage mat to keep the floor dry once it’s put away.

LG CordZero Auto Empty Cordless Stick Vacuum

Regular Price: $999.00

Sale Price: $851.71

The LG CordZero Auto Empty Cordless Stick Vacuum and Wet Mop All in One Tower is designed to work in homes with several pets or children and clean up all the messes that life brings. The battery lasts up to 2 hours, and there’s an extra removable battery that gives you even more cleaning time and power.

Breville Fresh and Furious Blender

Regular Price: $278.60

Sale Price: $199.95

Breville, a top name in blenders and juicers, offers the Fresh and Furious Blender, featuring 50-ounce capacity, Vac Q technology, pre-programmed cycles, LCD display and lid with pull ring. With the Fresh and Furious Blender, you can make everything from a smoothie to a soup and everything in between.

Hot Tools Professional 2000 Turbo Ionic Hair Dryer

Regular Price: $89.99

Sale Price: $55.63

The Hot Tools Professional 2000 Turbo Ionic Hair Dryer is designed for professional use, but it works perfectly in the home. With 1875 watts of power, 6 heat and speed settings and a lightweight design, you can easily style your hair and utilize the diffuser, cut back on the frizz and stretch the 8 ft cord for maximum functionality.

Columbia Heavenly Long Hooded Jacket

Regular Price: $160

Sale Price: $97.38

The Heavenly Long Hooded Jacket from Columbia is designed to be light for everyday use, but it’s heavy enough to protect you from the cold. The plush fleece lining, security pocket, water resistant fabric, 2-way zipper, and zippered hand pockets make the jacket both protective and functional.

ConAir InfinitiPro Hair Dryer

Regular Price: $49.99

Sale Price: $29.99

ConAir is one of the biggest names in hair and beauty, and the InfinitPro is an 1875 watt hair dryer designed for professionals with ceramic technology. The dryer comes with a diffuser and concentrator, and it allows you to blow out your hair just the way they would at the salon.

Deals the Experts Are Hoping For

Experts believe that Amazon’s Black Friday sale could linger for quite some time. It all started with the Prime Early Access sale on October 11 and 12. Previously, Amazon has offered the “Epic Deals” sale that ran through late October. 

This is to say that any sale could come up at any time. 

Even so, those monitoring Amazon are looking forward to a few potential deals, including:

  • Apple Watch
  • AirPods (any generation)
  • MacBook Pro
  • Large, underpriced TVs
  • Amazon Echo
  • More small home appliances (Dyson or Shark vacuums, Instant Pots, etc.) 

While these predictions are based on last year’s Amazon Black Friday Sale, it’s important to remember that most Black Friday sales are fairly consistent and push the products that are most likely to sell.

 

Featured image sourced from Shutterstock

Posted In: Partner ContentGeneral