sThree Tips from Marijuana Investment Consultant Michael Mayes from Quantum 9.
Disclaimer: This blog was written on June 30, 2016
What makes a state a good marijuana investment? Engaging a marijuana investment consultant. It is worth every penny when selecting the right one. Read the three tips on marijuana investing by state.
The best piece of advice I offer is to read the state or federal regulations! Everything we know today as “medicinal” will eventually be adult or recreational use and laboratory and science companies will drive the new healthcare wave. Cannabis investments will show the same growth seen by most Biotech and Pharmaceutical industry. It is just a matter of time before the FDA and EPA start it’s an oversight. When they finally consider marijuana medicine federally. Something to look at while considering an MMJ investment is whether or not the state is seeking to go recreational in the near future, research to see if there are bills or ballot initiatives on the table.
Tip One: Make sure you understand if the state model is for profit or not for profit. If the state is for profit, making it isn’t an issue. For non-profit medicinal marijuana states, investing and getting a return on your investment is many times a little more tricky. The question a marijuana investor wants to ask themselves is “How can I take a profit out of this scheme?” Does the law allow a management company to sell cannabis consulting services to the nonprofit? The consultancy model as considered illegal in Massachusetts. The only way to get a return on your investment when using a not for profit model is money paid to a parent company or a consulting relationship.
Tip Two: What conditions are allowed for access to medical cannabis? What is the market size? If the illnesses and conditions list are light, the market size will be light as well. Here is a great example. In Illinois, the Department of Health Medical Cannabis Advisory Board made a suggestion for 11 conditions and all they did not approve 11 of them.
Tip Three: Does the state allow for ballot initiatives? Ballot initiatives are allowed to be voted on by the people after a certain number of signatures are collected. The States that block this like New York prevent swift changes in law by the people. You need to align with a state where people can vote on sensible laws, as a cannabis investor.
Other things to consider are the high scrutiny of cannabis regulations.
Recommendations from Michael Mayes Marijuana Investment Consulting Expert:
- Red Indicates Do Not Invest
- Green Indicates Invest (at your own risk)
Massachusetts – This State is medical but only two facilities have opened over the last three years, there are many regulation roadblocks with too much corruption. New rules introduced. No equity-like participation, not investable currently, after 2016 maybe.
Illinois – For-profit, vertical integration, large population, low patient count, fingerprinting requirements and doctors are not writing recommendations, the rules are mired in litigation. Not the best investment use caution.
Michigan – No dispensary program, massive illegal dispensary market, Feb 2013 Michigan supreme court ruled dispensary are illegal, patients can grow, maybe the largest gray market outside of California, Investible with the right guidance from a company like Quantum 9 who is behind building one of the best Lansing Dispensaries in Michigan.
Ohio – No official program, attempted cartel takeover by Responsible Ohio, puts all medical cannabis cultivation in the hands of the bill sponsors. Major backlash. Not Investable– unless you are part of the cartel for cultivation and processing. Retail is still wide open.
Florida – For-profit, vertical integration, must be partnered with a commercial ag operator with a 30-year nursery background. Very few licenses – 5. The law could soon change. It could mean a proliferation of cannabis industry. Maybe if you think the law will not change.
New York -Stay away. Not investable
Connecticut – Medical, nonprofit, ban on vertical integration (meaning you are unable to allow a single company or set of owners to operate the production, wholesaling, and retail operations of a cannabis business), very restrictive, retailers reliant on wholesalers- looking at chronic pain – Investable for cultivators.
Rhode Island: Medicinal- non-profit – Lose laws and cannabis is going to New York, very few licenses, The Slater Center is the second largest cannabis in the country and average a $100,000 in legal cannabis sales average a day. Collectives 99 plants only, no real vertical integration, recreational is pending via the state house and there is an enormous gray market. Investable but no equity.
Maine: Medical, nonprofit, very few licenses, full vertical integration, equity-like participation, expanding in the future. Investable if you can find an entry point. Portland allows recreational in the local municipalities. Out of 8 licenses, one group owns 5. These groups are 6 or 7 years ahead of your cannabis investment.
Colorado: For-Profit – Very investable but saturated – residency requirements pose issues with investments. OpenVape is in Colorado, and they are on track to do a $100M in sales this year.
Washington: 502 recreational shops, soon just Recreational. Large black market and huge outdoor crops. Investable – the harvest in October flood the market after the outdoor market hits the state
Nevada: For-profit, reciprocity, short-term doctor Certification, locations based on population, heavily regulation like gaming, hard to transfer equity Investible – but only to 9.99% equity. Ideal for debt investment.
California: There are over 1,000,000 patients in California, this represents 50% of the market share in the United States. Not for profit (changing), the largest single market in the United States, enormous black market, Investable.
The best advice I can give is to work with a trusted Marijuana Investment Consultant. I, Michael Mayes with Quantum 9, have worked in ten countries working on cannabis investment due diligence. I have helped raise over 39 million dollars for cannabis projects as a matchmaker and subject matter expert. You can reach me at 888-716-0404.