Investment Philosopy

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By tracking and understanding the economic, regulatory, and legislative landscape we create fluid investment narratives that change with the dynamic cannabis market. 

We  structure our portfolio investments to capitalize on these narratives as well as the abnormalities and inefficiencies of the immature cannabis market which include: lack of liquidity, trading on lower exchanges, mostly retail investors, and rapidly changing capital markets.

Finally, we buy stocks as if buying ownership of the underlying business. Therefore, in-depth business knowledge, fundamentals, valuation, accounting scrutiny, and management  consumes our focus as investment managers. We restrict ourselves to exchange-listed cannabis equities and pick equities with strong and undervalued fundamentals.

These levers/catalysts will fundamentally change the dynamics of the developing cannabis industry. We position our portfolio to capitalize on the levers at the appropriate times.

Federal Levers

• Reclassification on Controlled Substance List - 280E (decrease taxes, increase NI)
• Stock Exchange Up List (liquidity and demand)
• Interstate Commerce (everything changes)
• Congressional Action  i.e. SAFE BANKING/ MORE ACT  (everything could change)
• DOJ/ FDA/DEA -Clarification of policies thru memos/hearings (everything could change)

State Levers

• More States Medical/Recreational (higher TAM) 
• Political Elections – Governors and Assembly (efficiency of market develop/roll out – favorable/unfavorable)
• Cannabis Commissions  (Rollout terms, social equity) 

Industry Levers

• Capital Raises –Debt and Equity (reduce cost of capital)
• State Buildout (economies of scale)
• Social Equity (social impact)
• Health/Wellness (more products/more acceptance/larger TAM)
• Social Acceptance  (products i.e. beverages/vapes/etc)
• M&A - Rollups  (premium valuation)