Welcome to Lede on Cannabis – your semi-regular look at the burgeoning cannabis industry.
This week we’re coming to you from the Cannabis World Congress and Expo in New York.
TOP OF THE DAY
A Good Outlook
Let’s start with an industry overview from the conference’s opening day on Thursday.
Now, it’s a cannabis conference – and you don’t tend to find a lot of negativity on the cannabis industry at a cannabis industry conference. So of course, most of the people we’re talking to here are bullish on this industry. But by just about every objective measurement, the growth in the industry seems mostly worthy of the hype. There are some questions about who will be able to benefit as the industry matures (mom and pops are starting to worry about the big corporations coming in), but the industry appears set for continued robust growth – considering that it’s nowhere near full capacity as several very big states are yet to move toward non-medical legalization. Also, we’re only just starting to see the niche products, from coffee and beer infused with CBD, to pet meds. So here’s the conference-opening, scene-setting industry overview, from analyst Sumit Mehta, and from Bruce Linton, the CEO of one of North America’s largest cannabis companies, Canopy Growth (more on that company coming up in a bit).
Bottom line, in the words of Sumit Mehta: “It’s one of the most exciting times in one of the most exciting industries.” The growth figures Mehta talked about and the industry valuation, which he pegged at $10 billion (that’s cannabis sales only – not counting ancillary business) are pretty impressive. Mehta and some colleagues tried to figure whether it’s the fastest adoption of a new industry and came up with only one that was more impressive – the Internet.
“So the only thing Americans want more than cannabis is wifi,” Mehta said.
TICKER CHECK – CANOPY GROWTH REBOUNDING AFTER INITIAL DROP
Canada’s Canopy Growth (CGC), which last week became the first plant-touching cannabis company to be traded on the New York Stock Exchange, was up 2.7 percent on Friday to $29.11 just after mid-day in New York.
That’s a welcome jump for the stock after what, for some investors, may have been some early uneasiness from the stock’s drop after it debuted. The stock dropped 6 percent on the day it opened.
But I spoke with CEO Bruce Linton this week here in New York, and he was unconcerned.
“Look at how much it ran up (in valuation) before” it opened trading, Linton said in an interview. “We ran up about 20 percent in anticipation.”
Linton said he wasn’t really worried about what the stock did over a few days anyway.
“This is not short term,” Linton said.
Linton also said that being on the NYSE wasn’t just about raising money from shareholders – it’s part of an ongoing effort to legitimize the business in the eyes of the public, regulators, potential consumers, and also big institutional investors.
Being listed on the NYSE “checks a box for all those large funds” Linton said. “It’s credibility. You need to show up and be as normal as you can be.”
Cannabis News From Around the Country:
The Big Story
The big cannabis story out in the states today comes from Massachusetts, where it is the first day regulators can start issuing commercial licenses. More from NECN
In San Diego, alcohol business trying to get in on cannabis biz. Voice of San Diego
The medical marijuana industry in Florida is selling 56 pounds of cannabis a week. Miami Herald
And, a group of patients is asking a Florida judge to allow smokable medical marijuana while the issue is decided on appeal. News Service of Florida
Couple loses custody of son after using cannabis to treat his seizures. CBS News
Michigan is extending its deadline for medical marijuana license applicants. State of Michigan
A cautionary tale: Oregon has a glut of marijuana. Associated Press
Also worth reading:
Boehner talks about his changed mindset on marijuana. Freep.
Conservative Florida congressman and Trump ally Matt Gaetz makes the case for medical marijuana. From Alex Leary at the Tampa Bay Times
We’ll have more tomorrow from the CWCBExpo. Meanwhile, you can follow our expo coverage here, our coverage of the cannabis industry here, and our coverage of all kinds of emerging industries, trends and ideas here.
Have a great weekend!