Codie Sanchez, Cresco Capital Partners: Cannabis Public Market Valuations Are Nuts

TL;DR

Private cannabis investments are experiencing a pullback in valuations due to the volatility in the public markets, presenting opportunities for investors.

Transcript

for the investing news network I am Brian McGovern Abdi NJBIZ international event in Toronto with Cody Sanchez managing partner for Cresco Capital Cody thank you so much for your time today Cody obviously a lot of your focus relies on the private cannabis investment market can you give me a bit of an update on the uptick that we've seen so far late... Read More

Key Insights

• 🥺 Volatility in the public cannabis markets has led to decreased valuations for private cannabis companies.
• 👍 Private investors have more leverage in negotiating valuations and can focus on metrics and proven track records.
• 🏃 Investors should exercise caution when considering CBD products due to regulatory uncertainty.
• ☕ Exciting opportunities in the market include THC beverages and sustainable products derived from hemp.

Questions & Answers

Q: How has the volatility in the public cannabis markets affected private cannabis investments?

The volatility has led to decreased valuations for private cannabis companies, making it more challenging for them to raise funds. However, it presents an opportunity for private investors to negotiate better valuations.

Q: What are the risks associated with investing in CBD products?

The FDA has not provided clear guidelines for regulating CBD products, creating uncertainty in the market. Investors should be cautious of companies making guarantees about the benefits of CBD and focus on other factors like distribution models and cost of client acquisition.

Q: What areas of the cannabis market are particularly exciting for investors?

Investors are interested in THC beverages and their potential for socialization. Additionally, there is a growing focus on sustainable products derived from hemp, such as hempcrete. However, the investment return and viability of these products need further investigation.

Q: How closely are investors following the rollout of the cannabis edibles market in Canada?

Investors are closely monitoring the introduction of edibles in Canada, particularly products that focus on health and wellness like mushroom coffee. Consumption lounges and changes in packaging laws are also of interest.

Summary & Key Takeaways

• Volatility in the public cannabis markets has led to decreased valuations and difficulty in raising funds for private cannabis companies.

• The public markets are overinflated, with companies trading at high valuations that are difficult to justify.

• Investors in the private markets have more leverage, allowing them to negotiate reasonable valuations and focus on metrics and proven track records.