EPISODE #48 Cannabis Investing in North America with Alan Brochstein, Founding Partner at New Canna
EPISODE #48 Cannabis Investing in North America with Alan Brochstein, Founding Partner at New Canna
How is 2020 shaping up for Cannabis Investors?
This week we’re joined by Alan Brochstein, founding partner at New Cannabis Ventures and founder of 420investor.com. Alan is a leading authority on investing in the rapidly evolving cannabis industry in North America.
This week we explore the cannabis investment space in North America, discussing trends, forecasts and the problems faced by investors within this area.
Alan is the founder of 420 Investor, an online community featuring ideas, research, and conversation about stocks in the cannabis industry. He is also the founder of NCV Media, the company behind New Cannabis Ventures, a publicly facing curated content aggregation site focusing on the most promising companies and investors in the space. With over 20 years of experience in fixed-income and stocks, Alan started an independent consulting firm, AB Analytical Services, in 2007 in order to offer independent, unbiased, and customized research to institutional clients.
Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha , where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV, and has written a column for Leafly and currently contributes to Forbes .
Episode Summary
• Alan started his journey into cannabis as an independent equity analyst. He saw a negative article about cannabis in the media which caught his attention, and started to realise that the industry was huge, there were even publicly trading companies within the space.
• Alan started blogging about cannabis stocks on the platform Seeking Alpha which provides stock market insights and financial analysis.
• In 2015, Alan launched New Cannabis Ventures – a cannabis news platform which is a leading provider of relevant information in the industry.
• New Cannabis Ventures contributes original content and curates quality news on the most promising businesses and influential investors – helping to bridge the gaps between cannabis industry entrepreneurs and investors.
• 420investor.com covers news from both public and private companies, although do not provide investing guidance.
• In 2014, when Colorado legalised cannabis, the value of public companies trading within the space increased by up to 40 or 50 times, showing considerable interest in the space.
• In 2018, the cannabis market in the USA exploded, with many multi-state operators coming to market which saw the crash of many of these due to a flood of supply.
• In 2019, the cannabis market started declining, particularly in Canada due to lack of distribution, limited variety of consumables and weak extracts.
• In the USA, there were capital access problems, especially after the vaping crisis.
• In California, there is some controversy around the amount of taxation on cannabis, with the thought that lower taxes will help to eradicate the illicit market.
• Alan suggests that if you are an investor and want to make money, you should not invest on ‘yesterday’s news’ especially in the cannabis space which is evolving at such a rapid rate.
• Alan suggests that the cannabis space trends to be over dominated by businesses who ‘touch the plant’.
