Business Opportunity--Not For the Faint Of Heart (1 Viewer)

[chet]

Last week, I asked the compliance manager in my office if I'd be allowed to invest in a company that grows and cultivates marijuana. I have to get all outside business investments approved to ensure there's no conflict of interest etc. Today, he came back to me to say that since I asked, two other people in our office asked him the same question after me and that no, I am not allowed to make the investment.

Are there a lot of these opportunities floating around out there? I was very surprised that he'd never been asked about this type of business investment before last week but has received a total of 3 inquiries since then.

 

[Koya]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

 

[Tom Servo]

Obviously the solution is to get your buddy Joe Pesci to invest your money for you.

 

[chet]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

 

[eoMMan]

GW Pharmaceuticals?

 

[Foosball God]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

Legitimate growers in States where it is legalized are "unsavory characters"?

 

[chet]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

Legitimate growers in States where it is legalized are "unsavory characters"?

Potentially. Think about it--somehow these people got good at growing it and maybe it wasn't legal in their state when they acquired that knowledge. There are many other ways potentially unsavory characters are much more likely to become involved in this than in something more mainstream and therein lies one of the biggest risks IMO.

 

[Foosball God]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

Legitimate growers in States where it is legalized are "unsavory characters"?

Potentially. Think about it--somehow these people got good at growing it and maybe it wasn't legal in their state when they acquired that knowledge. There are many other ways potentially unsavory characters are much more likely to become involved in this than in something more mainstream and therein lies one of the biggest risks IMO.

I'm pretty sure that farmers would have a decent idea how to grow marijuana without having grown it before. Legitimate growers are licensed by the State, it seems they would not want to be caught in a situation where they licensed a grower who has a shady past or may illegally ship product to other States.

 

[-fish-]

There is a lot of investment in warehouses right now in Washington. The growers can't afford the space and the setup costs, so they're offering 20% of their profits in exchange for warehouse space.

 

[Apple Jack]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

More unsavory than Wall Street types? Unlikely.

 

[Freelove]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

More unsavory than Wall Street types? Unlikely.

 

[Tom Servo]

There is a lot of investment in warehouses right now in Washington. The growers can't afford the space and the setup costs, so they're offering 20% of their profits in exchange for warehouse space.

This actually might be the shark move here.

 

[Cjw_55106]

What type of job do you have that you have to not only talk about your investments, but ask permission...and then get denied?

 

[chet]

What type of job do you have that you have to not only talk about your investments, but ask permission...and then get denied?

A good one.

 

[chet]

Why not for the faint of heart? It's a legal business in a number of states, albeit with a good amount of uncertainty and flux from a regulatory flux

Dealing with especially unsavory characters and questionable legality from a federal standpoint.

Legitimate growers in States where it is legalized are "unsavory characters"?

Potentially. Think about it--somehow these people got good at growing it and maybe it wasn't legal in their state when they acquired that knowledge. There are many other ways potentially unsavory characters are much more likely to become involved in this than in something more mainstream and therein lies one of the biggest risks IMO.

I'm pretty sure that farmers would have a decent idea how to grow marijuana without having grown it before. Legitimate growers are licensed by the State, it seems they would not want to be caught in a situation where they licensed a grower who has a shady past or may illegally ship product to other States.

Maybe, but apparently there's a lot you can do to improve margins and experience is key. Probably not too hard to actually grow it but drying it etc is where the expertise lies.

 

[johnnycakes]

From what I have heard, chet, the federal government is still pushing back some on this issue... not at the user level, but for the growers and dispensaries and others in the supply chain. Difficulties I have heard include inability for people in the business to open bank accounts for their business and threats by the government to restrict water usage for growers, to name a couple. The IRS has recently come out with guidance for such cash businesses to deposit payroll taxes the old fashioned way rather than electronically just because getting a bank account has proven so difficult for many in the business.

All that said, I think there are opportunities for investment, but it will be risky for those reasons, plus increasing competition as others jump in the game.

Also, from what I have heard, the "unsavory character" factor may not be as much an issue as you may imagine. Those states that have legalized tend to have very onerous processes in place to vet applicants in the business. So the word I get through the grapevine is that the cartels are largely being excluded from the legal business end of the industry.

I'll send a PM with a business contact who can probably help you evaluate industry from an investor point of view.