While investors were eager to pick up investments directly related to growing marijuana, attention may now be shifting to ancillary markets, says an investment executive.
Morgan Paxhia, managing partner and co-founder of San Francisco-based Poseidon Asset Management, said he’s surprised by the investment interest in what he sees as the riskiest part of the industry — the actual growing of marijuana — compared to the ancillary plays available, such as extraction, retail, accessories and packaging.
The Investing News Network (INN) caught up with Paxhia at the Lift & Co. (TSXV:LIFT,OTCQB:LFCOF) Cannabis Expo in Toronto.
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The executive said his firm has been investing in cannabis since 2014. He explained that Poseidon invests in public and private companies, debt investments and traditional equity ownership.
Poseidon offers investors two funds with different levels of exposure into the marijuana market. The first fund, which includes an investment in multi-state operator Green Thumb Industries (CSE:GTII,OTCQX:GTBIF), is now closed to new investors.
Paxhia said that, while early investment in growers was a great sign for the industry and producers are a complex business in need of capital, he’s seeing a shift to the picks and shovels of the cannabis market.
“When we look at the ancillary space, we think much more traditionally,” he told INN.
The Poseidon executive said it’s more viable to compare the valuations or structures of ancillary marijuana players to other traditional industries for a baseline.
Paxhia served as a speaker during the “US Expansion: Executing a Go-To-Market Strategy” panel at the Lift & Co. event, and explained the intricacies of investing in the US marijuana market.
For more on what Paxhia had to say, watch the interview above. You can also click here to see our full Lift & Co. Cannabis Expo playlist on YouTube.
Don’t forget to follow us @INN_Cannabis for real-time 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.