Troy Dayton spoke at the recent State of Marijuana Conference in Long Beach. He outlined what he believes are the top 5 cannabis investment trends. These trends are not necessarily where the most money is currently being invested. Rather, they are the top 5 most interesting trends that have a lot of implications for where the cannabis industry could be going in the coming years.
(1) Limited Licenses
Limited licenses within markets, whether it be a state such as New York, or a country, such as Canada, provide investors with huge barriers to entry. Limited competition allows companies and their investors to invest in large grow facilities. California, by contrast, is a very open market, with few barriers to entry for cultivation, extraction, distribution, or retail dispensaries. California is great for brand development.
(2) Genetics / Biopharma / Testing
Growers can finally work with the top agricultural scientists in the world. Miniaturization of testing equipment as well as testing around genetics, ancillary businesses.
(3) Feelings / Low Dose
Combining cannabis with terpenes that are known to make people happy, energetic, creative, sleepy, etc. Create a repeatable experience for people who aren’t just looking to get high and make it easy for someone to find products that fit his or her lifestyle.
(4) Automated Trimming
Trimming is a huge labor expense for growers. Automation is not for purists, but has a place in the industry for large scale operations, and helps drive down the price of cannabis.
(5) Brand IP Licensing
The race is on for brands. Develop a brand reputation in your home market and license your brand out to producers in other states. Create a brand that will connect with today’s consumers as well as future consumers. IP companies aren’t touching the plant. They are licensing their formula and creative out to others, which is appealing to investors. The risk is lower than for companies touching the plant.
(6) Businesses Giving Back
Businesses are starting to donate to support the movement and to the politics of cannabis issues. Businesses that are benefiting from the industry need to help pay to promote reform.
Companies donating at least $100,000 to the industry: