There is a ton of interest in the cannabis sector despite the fact that it illegal federally in the U.S., and Tiki Barber, co-founder of cannabis investment firm Grove Group Management, believes this market immaturity is having ripple effects throughout the industry.
"It's interesting right now because you saw a bunch of companies sprout, particularly in Canada where it became federally legal last year, and you saw these, these valuations that just didn't make sense. I mean, right, it was, that's an $8 billion company and you'd have $10 million of revenue," Barber told TheStreet.
That frothiness may have contributed to the downfall of former Canopy Growth (CGC) - Get Report CEO Bruce Linton, according to Barber who says the company was forced to make acquisitions of little value due to its small revenue and large valuation.
So in order to justify this valuation we've got to buy, buy, buy, buy, buy, acquire, all these other smaller a company companies and in in that way make something that's bigger. I think the future is smarter than that and it's slower than that. And I want to say it's going to be mom and pops because I know that municipalities and states, they want that to happen. They don't want these big companies to come in and dominate this space as we know it's probably going to happen in the long run. Um, but it's probably going to be a little bit of a mix in between.
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