Wall Street Investors Sample Marijuana Industry

Discussion in 'Marijuana News' started by claygooding, Jun 18, 2013.

  1. #1 claygooding, Jun 18, 2013
    Last edited by a moderator: Jun 18, 2013
    Wall Street Investors Sample Marijuana Industry
    Twenty companies serving the legal marijuana industry displayed their wares on Wall Street last week in search of investment capital-possibly the first baby steps of what some view as a budding sector.
    \n“The writing is on the wall. This is going to be the next great American industry,” said Troy Dayton, cofounder and CEO of ArcView Group, a San Francisco-based network that seeks to match investors with marijuana-related businesses.
    \nThe ArcView Group hosted the road show-style conference, the third of a planned five across the U.S. this year. Investors pay ArcView a $10,000 annual membership fee-$20,000 for a lifetime membership-for access to the companies and other services.
    \nThese ancillary businesses, which do not grow, produce, process or handle marijuana, currently generate $2 billion in revenue, said Dayton,  who envisions stock traders buying and selling shares of companies in marijuana-related businesses and commodities traders making markets in cannabis.
    \nMedical marijuana is legal in 18 states plus the District of Columbia; another six have medical marijuana bills pending. Last November, voters in Colorado and Washington approved ballot initiatives allowing possession of small amounts of marijuana for personal use. The perceived momentum toward legalized marijuana is driving this new industry of ancillary businesses, according to market observers.
    \nCompanies at the ArcView conference ranged from a manufacturer of indoor growing systems for marijuana and other plants to a maker of equipment that extracts botanical oils. Denver-based Dixie Elixirs & Edibles offers a line of ingestible products infused with the active ingredients in marijuana. Its products include pharmaceutical-grade marijuana capsules for patients who cannot smoke, chocolates, carbonated beverages and-of course-brownies.
    \nDixie, a portfolio company of Medical Marijuana Inc. (OTC Pink:MJNA), saw its revenues jump 158 percent from 2011 to 2012, according to managing director Tripp Keber, who anticipates 2013 sales will triple from 2012.
    \n“In 2014, we expect to serve 3.5 million consumers, which would include marijuana tourism,” said Keber. “Almost 40 percent of the U.S. population lives in states that offer some form of medical cannabis for adult use, with another eight to 10 states likely to legalize cannabis for adult use in the next three years. So it's pretty compelling growth.”
    \nSeattle-based Privateer Holdings is the burgeoning industry's sole private equity firm. Privateer operates as a holding company that sells investors preferred stock in itself, according to founder Brendan Kennedy. The firm has raised $5 million of its $7 million target, which it expects to meet by the end of June-all from high-net-worth individuals.
    \n“Most of them are looking for a financial return but all of them are looking for a social return,” said Kennedy. “They're looking to end the harm caused by [marijuana] prohibition.”
    \nThat prohibition continues to cast a legal cloud over the future of marijuana-related businesses. Possession of cannabis remains a federal crime. In states where marijuana has been legalized for medical or personal use, licensed growers and dispensaries that are in compliance with local regulations still face the possibility of federal prosecution.
    \nAnother stumbling block is Internal Revenue Service Rule 480E, which prohibits “drug trafficking organizations” from claiming business expenses as deductions. The IRS has used 480E to audit medical marijuana dispensaries and, in several cases, disallowed deductions for standard expenses such as rent, payroll and cost of goods. Some dispensaries ended up owing millions of dollars in back taxes and penalties and were forced to shut down.
    \n“It's a complicated business,” said Keber. “You have to clearly understand the regulatory model in each state. But most importantly you have to understand that what we're doing is perceived as illegal at the federal level.”
    That may explain the high level of secrecy surrounding the event in New York. The location was not disclosed until the evening before. Media members were advised that participants whose name tags displayed an orange could not be interviewed or shown in any photos or video.
    \nWith some estimating that marijuana-related businesses have the potential to generate up to $40 billion in sales, ArcView's Dayton is hopeful that the power of big business will lead to reform of federal marijuana laws and tax regulations.
    Dixie's Keber echoed that sentiment. He participated in the Cannabis Industry Association's meetings with 13 federal lawmakers to lobby for exempting state-licensed marijuana dispensaries from Rule 480 E and reforming other marijuana regulations. “We found them to be very open-minded and they received us with open arms,” he said.
    \nInvestors may be looking to profit from marijuana-related businesses, but they also “want to see a day when not a single adult is punished for this plant,” said Dayton. “They see business as the most powerful platform for political change.”
    \nI hear the greed spreading,,,

  2. Keep posting all these articles. Maybe some of the kids on here will finally realize that they are not goin to be moving out there to get into the game. Deep pockets kids. Sorry
  3. I agree, keep posting these articles....as far as the getting the kids to read them, you need to add some info about shape shifting lizard people or deviant sex practices...haha...
  4. There is waaaay too much grey area to be launching trade shows already. Unless its made up entirely of insider knowledge.
    Medical Marijauana Inc, for example, is one of the leading companies. Their former CEO is up on wire fraud charges, related to bad real estate dealings, and their current CEO got nabbed for possession June 9th and can't even use his own Dixie Elixir products.
    Too much jostling, unless you are the uber rich and create the regulatory structure to your own benefit.
  5. Well how else would they structure it? To benefit the people that actually do the work. Smh. I can't see how people think this is a good thing.
  6. I see it as a good thing because greed and corporate money bought prohibition and greed and corporate money can buy it's end,,,come on greed!!!!
    You sound like you are channeling Gordon Gecko  from the 80's movie "Wall Street"  ...... "Greed is good!"
  8. But then you get mad at us greedy ca who think legilzation is not the answer. You would rather have couperate America take over the weed industrie. I will pass on that.
  9. Do you guys actually think corporate America can "take over" the dank market? I don't think anyone should make money off of pot,,however since most human beings are so lazy they would shit in their own bed if someone else had to clean it up rather than get up and go to the bathroom there will always be customers for good growers. You may not make as much for your herb as while it is illegal but if the state govt's tax hungry legislators don't drive the price up for enough profit margin for you,,the legal growers thinking pot is worth more than $20 per once wholesale will.
  10. #10 Old School Smoker, Jun 19, 2013
    Last edited by a moderator: Jun 19, 2013
    Well well well, looks like America is finally waking up to how big marijuana is within our borders.....
  11. Greed is evil,,it created the problem in 1937,,it has taken every since then for us to get people to realize how versatile and powerful the hemp plant is,,if it takes greed to end prohibition then so be it,,I didn't make the rules,,for sale legislators did,,I don't have the money to outbid the Pharmaceutical companies for legislators votes,,do you...corporations do.
  12. I'll have my CFA by the time weed goes on shelves.

    Invest with me kids, your weed money has never been safer.
  13. I will grow my own even if pot retails for $20 an oz because now I am addicted to watching it grow,,the female flowers just starting to peek out,,the first trichs forming on the sugar leafs,,the buds starting to form up and then swelling and getting firm and sticky just makes me cream in my jeans,,,pot porn for damn sure.

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