The legal cannabis industry has been developing for years, but it is still difficult even for sophisticated investors to know where to start when thinking about investing in the cannabis industry.
As with any potential investment category, it is virtually impossible to list all the relevant issues that an astute investor should understand before making an investment decision.
Just as angel and venture capital investors understand they risk significant if not total loss of their investments in their search for the next technology “unicorn,” cannabis investors should appreciate the downside risks inherent in a specific cannabis venture notwithstanding the overall growth projected as to the industry.
The purpose of this article is not to caution everyone against investing in cannabis, but to make sure potential investors go into the sector with eyes open.
The SAFE Banking Act, a law designed to allow cannabis companies access to the banking system, which has passed the House of Representatives multiple times in recent years, has consistently stalled in the Senate, and does not appear to be a White House priority.
The background, relationships and skill set of the founders and key management personnel are significant to all growth businesses, because so much of the growth of those businesses results directly from the industry know how, connections and experience of those companies’ key people.
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