Shark Tank’s Kevin O’Leary Spells Out What Institutional Investors Need from the Cannabis Industry
Ryan Allway
June 26th, 2019
App, Policy
Kevin O’Leary may be best-known for his role on ABC’s hit TV show, Shark Tank, but he also heads up O’Shares ETF Investments, which provides rules-based, quality-focused indexed ETFs for institutional investors.
CFN Media recently caught up with Mr. O’Leary, better known as Mr. Wonderful, to discuss what institutional investors are looking for in the cannabis space.
“Most institutional investors have no interest in recreational marijuana. What they want to invest in is CBD for medicinal, cosmetic, beverage, and pet [industries].”
There are a growing number of institutional investors getting involved with the cannabis industry, such as BlackRock’s $11 million investment in Curaleaf Holdings Inc. (CSE: CURA), but most of these investments have been focused on the medical market and the amounts of have been paltry. Many investors are waiting for greater regulatory certainty before diving in.
“[Companies] keep talking about branding and recreational [cannabis]. … What [institutional investors] really want to invest in is a multi-billion dollar franchise that’s global.”
Many cannabis companies are shifting their focus to the recreational side of the business to capitalize on growing demand in Canada and across states like California. While these are significant opportunities, the revenue and earnings from these companies have been relatively small thus far. Institutional investors looking to place billions of dollars want to see a multi-billion dollar global business.
“All of this stuff is irrelevant while [cannabis] is a Schedule I narcotic. It’s got to come off of that designation.”
Many institutional investors are unwilling to enter the cannabis space until the government removes the drug from the Schedule I Controlled Substances list. Until then, recreational cannabis companies won’t see major investment from sovereign wealth or state pension funds. These investors are waiting for regulatory clarity before they make a move.
“The real money is waiting until the industry bifurcates between medicinal and recreational.”
Kevin O’Leary recommends that investors follow companies that are going to petition federal regulators to deschedule cannabis. Once the industry fiburfates into medical and recreational components, and the FDA approves CBD with ~2.5% THC, he believes that the medical side of the business could start to see a significant influx of capital. He suggests that the industry form a lobby group and start pushing these changes.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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