Investing In Cannabis During A Crisis: What To Know About Stocks, Debt, Equity, M&A

This article was originally published on Hoban Law Group, and appears here with permission.

With the COVID-19 pandemic still front and center, the long-term impact of this virus on the broader economy and the cannabis industry remains highly uncertain. That said, cannabis is now “essential” in virtually all respects. Across the country, this portends a long-term boon for the industry and those who invest in it.  While cannabis investors and capital appear almost non-existent, there are “diamonds in the weeds” – investment opportunities in the cannabis space abound and, at least in my opinion, the future is bright. The key is to understand the investment landscape and the appropriate timing for deployment of capital in each case. Let’s explore a few.

Public Cannabis Stocks

Cannabis stocks took a severe beating in 2019. In 2019 alone, stock prices we’re down over 35% on average and over 75% from their prior peak in 2018. However, 2020 is showing promise, despite the virus. While the year may have gotten off to a slow start for cannabis pubcos, a number of these stocks are experiencing multi-month highs. Recent earnings reports from companies like Green Thumb IndustriesGrowGeneration, and Aurora Cannabis show very promising revenue and profitability trends. If you’re looking for opportunities in the pubco cannabis space, now’s the time to take a closer look.

Debt in Cannabusiness

Capital is king right now for many starving cannabis companies. The level of stress on companies in the space has effectively placed many into survival mode. This has been the case since mid-2019 and …

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