During the Vancouver edition of the International Cannabis Business Conference (ICBC) on Monday (June 25) an strategic advisory executive and investment advisor hosted a panel describing the shortfalls of the upcoming landscape of the cannabis public markets in Canada.
Nic Easley, acting as the CEO of 3C Consulting and a managing partner with Multiverse Capital, oversees and provides strategic advisory to clients of the consulting firm and investment guidance.
The Investing News Network (INN) had the opportunity to catch up with Easley on why exactly he calls a predicted cannabis bubble burst even worse than the dotcom bubble and where investors should be looking at in order to be prepared for this event.
Diversification will be key for cannabis investors
On his panel Easley emphasized companies needed to look at diversification. In speaking to INN, he expanded on how investors can keep up with this company necessity:
If you like a particular sector like let’s say a cultivator, I like to know everything that they are using. I like to know everyone they are selling to and I like to know where else in that supply chain can I make that investment … and also make other investments to capture pieces of that supply chain.
Easley explained ancillary businesses adjacent to the overall cannabis sector are poised to see growth alongside the booming market, in some cases even higher according to him.
With the exponential growth the cannabis industry has seen, a variety of generalist investors have gotten caught up with the enthusiasm surrounding the the sector. Easley, however, recommends investors to not being too brunt, too fast or too early.
“Diversifying within a sector is nice but if you buy 50 cannabis stock companies, it’s a bad idea because there’s not 50 good ones. Even if you buy the top 10 that’s not a good thing either,” Easley said.
Dotcom Bubble scenario incoming for the cannabis sector?
“The bubble is caused for all the speculation and all the international markets that they can sell things to,” Easley said. He added this leads to a “curve of disillusion” from rising potential.
“We’re realizing the cost of production here is extremely high and there’s a lot of them where a lot of cap has been invested into mass production [when] it’s about to be mildly constrained,” he said.
During his panel the executive said the bubble for the public cannabis market was three times worse than the dotcom bubble.
Other observers of the industry–and active players as well–have disagreed with the comparison to the crushing dotcom bubble.
“I don’t have any concerns whatsoever about a dotcom bubble,” Booth said during the televised segment.
Rob Tétrault, a portfolio manager and head of the Tetrault Wealth Advisory Group with Canaccord Genuity, told Vice News in January cannabis ventures are not able to create new previously non-existing value streams.
When asked how investors can be better prepared when facing his predicted gloomy scenario, Easley told INN public market investors should look at who has a leading position, the companies that delivering on promises and are in positions to obtain licenses while expanding into other markets.
He added investors should know if their picks have partnerships in “different revenue streams.”
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
CanBud Distribution Corporation Closes 2M Second and Final Tranche of its Oversubscribed Private Placement Offering
CanBud Distribution Corporation (CSE: CBDX) (FSE: CD0) (“CanBud” or the “Corporation”) is pleased to announce that it has closed the final tranche of its oversubscribed non-brokered private placement for aggregate gross proceeds of approximately $4,730,000 (the “Offering”).
The Corporation issued a combined total of 39,409,346 units (each a “Unit“) at price of $0.12 per Unit, with each Unit comprised of one common share in the capital of the Corporation (each a “Common Share“) and one common share purchase warrant (each a “Warrant“). Each Warrant entitles the holder to purchase one additional Common Share at an exercise price of $0.22 within 24 months of the closing of the Offering (the “Warrant Term“), provided, however that if the closing price of the Common Shares on the Canadian Securities Exchange (the “CSE“) (or any such other stock exchange in Canada as the Common Shares may trade at the applicable time) is $0.25 or greater per Common Share for a period of five (5) consecutive trading days at any time after the closing date of the Offering, the Corporation may accelerate the Warrant Term such that the Warrants shall expire on the date which is 30 days following the date a press release is issued by the Corporation announcing the reduced warrant terms.
Thoughtful Brands Inc. (CSE:TBI)(FSE:1WZ1)(OTCQB:PEMTF) (the “Company” or “Thoughtful Brands) announces that the letter of intent with Franchise Cannabis Corp. (“FCC”), previously announced in January, has been terminated. The previously announced European joint venture with FCC will continue and allow the Company to launch and tailor its products to European consumer demands
In connection with termination of the merger transaction with FCC, the Company has agreed to pay FCC $100,000 in cash and to issue FCC 5,000,000 common shares of the Company at a deemed value of $0.05 per share. The common shares will be subject to a four-month-and-one-day statutory hold period in accordance with applicable securities laws.
Mergers and acquisitions (M&A) in cannabis space have helped boost the industry to new levels.
Strategic sale of non-core assets by Lobe adds non-dilutive capital and shareholder value
Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce, further to its press release dated February 23, 2021, that it has completed the sale to Ionic Brands Corp. (“Ionic Brands”) of Lobe’s non-core cannabis assets relating to Washington-based Cowlitz County Cannabis Cultivation Inc. (“Cowlitz”) held by Lobe’s subsidiary vendor, Green Star Biosciences Inc. (the “Transaction”).
Seattle Area Grocery Chain Metropolitan Market to Begin Carrying KOIOS and Fit Soda on March 22, 2021
Adding to its existing presence on the west coast of the United States, all five KOIOS™ flavours and all four Fit Soda™ flavours will be carried in Metropolitan Market stores beginning on Monday, March 22, 2021. Serving the Seattle-Tacoma area (population 3.87 million), Metropolitan Market is one of five chains under its parent firm Good Food Holdings, which has a total of 51 stores in California, Oregon, and Washington State.
Koios Beverage Corp. (CSE: KBEV; OTC: KBEVF) (the “Company” or “Koios”) is pleased to announce that beginning on Monday, March 22, 2021, Koios’ entire line of canned beverage products will be sold at all locations of Metropolitan Market, an urban format supermarket chain in the Seattle-Tacoma area of Washington State. In Q1 2021, the Company announced multiple placements of its beverage products with regional grocers in markets on the west coast of the United States including Market of Choice in Oregon Jensen’s in Southern California and major natural grocery chain Sprouts Farmers Market which has a substantial west coast presence with over one third of its locations (360+ stores across 23 states) in California as well as Washington State 1 . The Company has also recently announced other developments relating to its expansion efforts being undertaken in 2021 such as an in-house beverage canning facility and distribution agreements with regional and national wholesale partners.