Todd Fromer Archives - Green Market Report

William SumnerMay 6, 2019
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3min22670

Investors are feeling bullish about the cannabis industry, according to a new survey released by KCSA Strategic Communications. Titled the Cannabis Investor Survey, KCSA polled over 250 retail cannabis investors about their investments and outlook on the legal cannabis industry in the United States.

Of those surveyed, 51% have a net worth between $100,000 and $500,000 while the other half (49%) have a net worth over $500,000.  According to the survey, 90% of retail investors are making money off of their stocks, and 40% say that they own stock in 10 or more cannabis companies. Roughly 50% are pulling money from other investments to invest in cannabis.

“Cannabis has graduated from being viewed as a high-risk, exotic or fringe investment, to a mainstream staple of retail investors’ stock portfolios,” said Todd Fromer, Managing Partner at KCSA Strategic Communications. “Our survey suggests that individual investors are selling their positions in traditional stocks in order to invest in cannabis stocks.”

While some may see cannabis as a way to make quick money, most retail investors say that they are in it for the long run. Approximately 80% of respondents say that they plan to hold on to their investments for between 1-10 years. Nearly half of those surveyed (40%) say that cannabis makes up more than a quarter of their overall investment portfolio.

Though cannabis remains a Schedule I controlled substance, most investors don’t seem to mind. Roughly 84% of respondents say that cannabis’ federal status has no impact on their decision to invest. Retail investors are also unafraid to invest in cannabis companies that touch the plant.

Approximately 44% say that they are invested in a medical cannabis company and 40% report to have investments in adult-use cannabis. While hemp-CBD may be the hottest thing in the health and wellness market, 37% of respondents have investments in the sector. Despite the legal benefits of investing in ancillary cannabis companies, only 24% have a financial stake in one.

The takeaway from this survey is that investors are exceedingly confident in the long-term success and stability of the cannabis industry. Instead of cautiously putting money into ancillary companies, most retail investors seem to be diving head first both adult-use and medical cannabis while shying away from “safer” investments. According to Lewis Goldberg, a managing partner at KCSA, that trend will only continue.

“Cannabis investors appear unafraid,” says Goldberg. “As they continue to invest without fear of federal illegality of cannabis and without concern regarding companies that touch the plant, we expect this sentiment will only grow as more and more states expand medical programs and pass recreational use laws.”


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KCSA Strategic Communications’ Todd Fromer Moderated “Cannabis and the Capital Markets” Panel

New York, June 5, 2018 /AxisWire/ Todd Fromer, Managing Partner, KCSA Strategic Communications, a fully-integrated communications agency specializing in public relations, investor relations and social media,  moderated a panel at last week’s Cannabis World Congress & Business Expo (CWCBExpo) at the Javits Center in New York City.

CWCBExpo is one of the largest business-to-business trade show events for the cannabis industry, with cannapreneurs, investors, media and other stakeholders from all over the country in attendance. The panel,  “Cannabis and the Capital Markets”, was in the Banking & Finance track of the conference and featured industry leading executives: Nick Kovacevich, CEO of Kush Bottles, George Allen, President of Acreage Holdings and Todd Harrison, Chief Investment Officer of CB1 Capital Management.

“Cannabis is one of the fastest growing industries in the United States and the lack of access to traditional capital is a hurdle that even the savviest of executives find challenging,” said Mr. Fromer. “Our goal with this discussion was to understand how real-world cannabis companies are not only surviving in today’s highly-regulated environment, but are actually accessing the capital markets and thriving.”

The panel highlighted several key takeaways when it comes to investing in cannabis:

As with any investment strategy, it’s important to diversify your holdings in cannabis
To that end, investors should take note that cannabis is now a global market and investors should also consider emerging markets like Australia and Canada as well as the U.S. in order to create a broader cannabis portfolio.
When it comes to cannabis, the healthcare implication is paramount. States start out with medicinal use and extend into adult use, but investors should educate themselves about the science of cannabis and consider its broader impact on the healthcare marketplace.
U.S. valuations remain very attractive in part because of the federal schedule 1 status of cannabis.
“The prevailing opinion of the panel was that governance matters,” continued Mr. Fromer. “Looking at this era is similar to the beginning of the dotcom era and the telecommunications boom. There will be a lot more failures than there are successes, and it’ll be critical for investors to do their due diligence and understand who and what they’re investing in.”

About KCSA Strategic Communications
KCSA Strategic Communications is a fully-integrated communications agency specializing in public relations, investor relations, social media and marketing with expertise in financial and professional services, technology, healthcare, media, energy, cannabis and public services companies. Since 1969, the firm has demonstrated strategic thinking and program execution that drives results for its clients in the ever-changing communications and digital landscape. The firm’s clients are its best references. For more information on the KCSA Cannabis Practice or “The Green Rush,” the company’s 30-minute weekly podcast on the business of cannabis, please visit our website. Or find us on the following social channels:

Twitter: @KCSA_Cannabis

Instagram: @KCSA_Cannabis

Contact:

Anne Donohoe

KCSA Strategic Communications

212.896.1265

adonohoe@kcsa.com


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