Investors ended 2019 fearing that the cannabis bubble had burst as big losses over the last two months of the year dimmed any optimism that the sector was ready to run higher in 2020.
However, there is a fundamental misunderstanding about where the industry is currently and what it has to achieve before the stock prices reflect the fact that it is still one of the fastest growing segments in business.
“The idea that the cannabis industry will be a quick buck means that you could create an empire in a night. You’ve got agriculture, manufacturing, distribution and retail that needs to be built out as an industry before the actual profits can be realized,” Cannabis One CEO Jeff Mascio told TheStreet.
For Cannabis One President Joshua Mann, the secret for investors is figuring out a way to leverage the end user.
“I think investors have to figure out how to leverage the end user, whether it be through a dispensary model or through what we’ve been focusing on, which is brands. We’ve been so focused on building our sales channels,” Mann said.
Having a great product is only half the battle, according to the pair. The necessary questions investors must ask are whether a company can bring the product to market, and whether it has the infrastructure and retail connections necessary to get significant shelf space. Those are overlooked aspects of evaluating cannabis companies.
Check out the video for the full discussion.